Challenges Associated With, And Strategies For, U.S. Patent Litigation

Russell E. Levine, P.C.Kirkland & Ellis LLP

russell.levine@kirkland.com

LES Asia Pacific Regional ConferenceHangzhou, China

October 16, 2013

Disclaimer

The views expressed herein are mypersonal views and are not those of

Kirkland & Ellis LLP or any of its clients

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There’s A Jury

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A Challenge

Jury Decides

Infringement

Validity

Damages

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Average Jury Profile - Age

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Average Jury Profile - Education

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U.S. Patent Litigation CanBe A Lengthy Process

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Another Challenge

Typical Litigation Time Line

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ITC Time Line

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U.S. Patent Litigation Is Expensive

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Yet Another Challenge

Why Is U.S. Patent Litigation Expensive?

Numerous experts needed Extensive discovery

Documents Interrogatories Depositions

Claim construction hearings Can be like a mini-trial Often combined with technology tutorial Often combined with hearing on summary judgment motions

There’s a need for demonstratives and animations

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The Loser Doesn’t Have to Pay Your Attorney Fees

Section 285 of the Patent Act states: “The Court in exceptional cases may award reasonable attorney fees to the prevailing party.”

“Exceptional cases usually feature some material, inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions.”

Serio-US Industries, Inc. v. Plastic Recovery Technologies Corp., 459 F.3d 1311, 1321-1322 (Fed. Cir. 2006)

“Absent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless.

Id. at 1322

An award of attorneys’ fees under Section 285 is available in “limited circumstances” and “is an exception to the American Rule.”

Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329 (Fed. Cir. 2003); Id. at 1322

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Utilize A Post Grant Challenge Under the AIA

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A Strategic Option

Background of the America Invents Act (AIA)

Signed into law on September 16, 2011.

Many provisions took effect right away.

Others became effective on September 16, 2012.

All provisions effective by March 16, 2013.

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Post-Grant Challenges under the AIA

Three primary types of post-grant challenges:A. Post Grant Review (“PGR”)B. Inter Partes Review (“IPR”)C. Covered Business Method Patent Review (“CBM”)

PGR, IPR, and CBM are “trials” before the PTAB.

The PTAB is staffed by Administrative Patent Judges (“APJ”). Employs 163 APJs as of January 28, 2013. Plans to hire another 60 APJs during FY2013. New hires are coming from PTO Examining Corp, ITC, DOJ. Each AIA challenge is decided by a 3-APJ panel.

Trials allow for limited discovery, not available in ex parte or former inter partes reexaminations.

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Benefits

Lower burden of proof for invalidity “Preponderance of the evidence” vs. “clear and convincing”

“Broadest reasonable” claim construction standard

Complicated issues handled by “expert” APJ panel

Possibility of two bites at the apple

PTAB’s constructions may influence district court

Generally faster than district court

Lower cost

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Drawbacks

Estoppel

IPR is limited to §§ 102, 103 grounds on patents & printed publications

Patent Owner may amend or present new claims

Fact discovery much narrower than civil litigation

Timing and limits (e.g., page limit) per petition

If challenge is unsuccessful, increased risk before the jury and enhanced presumption of validity

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Use an Alternate Dispute Resolution (“ADR”) Mechanism

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Another Strategic Option

ADR Mechanisms

Mediation

Non-Binding Expert Determination

Arbitration

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