Locusts did not descend on Pharaoh as quickly as lawyers descended on the Supreme Court's opinions earlier this week in Highmark and Octane Fitness which gave trial judges greater discretion in awarding attorneys fees against parties in patent cases. And as was the case with Pharaoh, the attention was richly merited.
But some of the most useful commentary on the issue to local practitioners may have been in today's article by Texas Lawyer reporter John Council, which included an interview with U.S. District Judge Rodney Gilstrap across the street, who presides over the busiest patent docket in the nation, as well as comments from Tyler attorney Andy Tindal and myself. The article is available here to subscribers, but here are some of the highlights:
I note that Patently-O had some analysis a few days ago that's worth noting in connection with the distinction I was drawing. In a post by Jason Rantanen, it analyzed an issue raised by Justice Alito during the oral argument in Octane. During the argument, Justice Alito asked a question about the frequency at which district court judges hear patent cases. Rudy Telscher opined that district court judges do see a lot of patent litigation. Justice Alito took issue with that, wondering how many patent cases the average judge sees over a five year period.
Jason did the research and noted that the distribution is highly skewed, with seven judges having over 100 cases, with Judge Gilstrap having the most of all 760 judges surveyed (1,636 in the four year period). In the end, depending on how you calculated it, and dispensing with the methodological caveats for purposes of staying awake, the average per judge was 20-23.8, and the median per judge was 8-11. Taking out the top three districts, the average calculated at 23.8 falls to 13.3 - taking out the top three and refining the judge population the average pops back up to 20 and the median is 10. That's filed - not heard.
But there's one other number of interest here that's not in the article - and that is that half this time period is after the AIA, and as I presented on last summer in Albuquerque and at the bench/bar, statistics locally show the average number of cases per patent since then ranging from 6-8 depending on when and which division is being examined. Before the AIA that would have been one case - now it's 6-8 separate cases claiming infringing of the same patent(s). (Interestingly, ED Tex chief clerk Dave Maland talks about precisely this point in this week's Texas Lawyer at p. 3. He uses the number 10, but I don't think he intended that to be a statistical average, and the numbers he and I have used previously in our presentations are the basis for my 6-8. That and my estimate from looking at the number of defendants in consolidated cases when they reach the status conference stage).
So, assuming a lower number of, say, four cases (four separate defendants' products) per patent (since outside the heavy districts I think it's likely fewer defendants are sued per patent), that makes the median patent load for judges outside the three heaviest districts about two to four patent litigation claims in a four year period. Spitballing some other statistics, which my graduate school statistics prof would hate to see me doing but I'll do it anyway, that means that the average federal judge outside the top three districts conducts a claim construction hearing about once every two to four years, and actually tries a patent case about once every fifteen to twenty-five years - meaning the same law clerk won't likely see a second Markman and the same judge may not see two trials. (Maybe Jason or someone else will look at the relative frequency of Markman proceedings and trials, but this is my rough estimate).
Why might that be worth considering? Jason has this to say:
While the numbers suggest that patent cases are not unicorns, even outside of the top three districts, there also may be some merit to Justice Alito’s concern that at least a substantial number of District Court judges do not hear more than an occasional patent case, and thus may find it difficult to determine which cases are “exceptional” based on their past experience with other patent cases.
Jason implies by use of the word "difficult" either that most judges are less likely to find cases "exceptional", or that their determinations are less likely to be consistent or "accurate"? Keeping in mind, of course, that the relative accuracy will now be cloaked with abuse of discretion review. My working hypothesis is actually the opposite - that defendants will actually find it easier to persuade a court that a case is exceptional when it does not have extensive experience with the area. My basis for this is in part parenting. I thought my oldest was exceptional as hell until we had two more. Now he just looks like the rest of the Minecraft bums down the hall at home.
Of course, as Jason goes on to note, the ultimate issue may not really be a patent one, but simply determining whether a complex piece of litigation is exceptional, and maybe that's not a determination that's limited to patent cases, and thus the number of patent cases a judge has heard may not be as important as Justice Alito was speculating. Mr. Telscher's response to Justice Alito's question certainly made that point. “I don’t know what that number is, Your Honor," he admitted. But I know that district court judges carry a widely varying docket of different areas of law and are called upon to learn the law and assess the reasonableness of those positions.” And that is a good point - this determination is not a completely alien one for judges, no matter what type of case it is. Judging is, for lack of a better word, uh, judging.
But this reinforces my and Andy's comments above that the determinations of what cases are and are not exceptional may be different depending on whether the judge in question has seen a lot of patent cases or not. I do believe that more 285 motions will be filed and, assuming we get some vacancies filled, the rulings will come out faster because the inquiry is no longer as detailed or subject to as searching review. But as Judge Gilstrap said, time will tell.
Every time a new issue of the Texas Bar Journal comes out, I feel like Tom Hanks' Mr. Short-Term Memory character from Saturday Night Live. I mean, I'm in my fourth year as chair of the board of editors for the magazine, so I really do know what we're publishing, but because of the delay between when we approve articles for publication and they come out, I have forgotten I've seen them before. Or more likely, the article looks so spectacular once it is formatted and aided by photos and graphics from our crackerjack staff (did I mention we just did a design redo last year?) that I really do forget that it is the article I read months before.
The issue also contains a little after-dinner treat in the form of a second short article on cloud computing for the solo/small firm by Virginia Bisek.
I commend all of the articles to you.
Several weeks ago I was talking to a law school administrator who was bemoaning the fact that a lot of current law students are a little short on business and money management skills, in part because their academic success in some cases was assisted by their parents acting as personal assistants handling everyday tasks, including financial management. I'm not just talking about parents providing financial support - I'm talking about parents handling the financial transactions to the point that the student doesn't have a clear grasp of how checkbooks or credit cards or budgets or monthly bills work. (I had it much easier - neither my parents nor I had any money so the management part was pretty simple. You can't buy anything). Yet in this economy many of these same students are going straight from law school into hanging out their own shingles, having never seen a household budget, much less a law firm's finances, much less actually managed either.
Enter another Lawyerist article too useful to pass up commenting on. This article on Lawyerist by Randall Ryder is a detailed how-to manual for setting up accounts, managing cash flow and credit, paying taxes and managing income, and forecasting income. These are critical skills that are not taught in law school, and even many experienced lawyers (and firms) struggle to stay on top of their firm finances. This is a must-read for anyone who manages a law firm’s finances or is even thinking about starting one.
I hope some readers find it useful.
Judge: Michael Schneider
Holding: Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue denied; Motion to Dismiss for Lack of Personal Jurisdiction granted.
As I have previously noted, this case involves numerous defendants, many of whom filed similar initial motions to dismiss or transfer asserting various grounds. In wading through the rulings, I found a useful pair of bookends on the subject of personal jurisdiction, in which the same judge, in the same case, using the same case law, granted one motion and denied another, based on the particular facts relating to personal jurisdiction as to the two defendants.
The capitalization-impaired Defendant, last.fm, Ltd. moved to dismiss Plaintiff's Complaint for lack of personal jurisdiction and improper venue, and by agreement of the parties, Plaintiff conducted jurisdictional discovery. After reviewing the applicable standards, Judge Schneider concluded that the critical issue in this case was whether the defendant's website was sufficiently interactive to support the Court's exercise of jurisdiction. In this case, the parties agreed that more than 1 million Texas residents had subscribed to the Defendant's services via its website, including entering their location which the Court found "has at least some effect on the services then provided to the user." Under these circumstances, the Court concluded, the defendant had purposefully directed its contacts to Texas, and the claims arose out of these contacts. With respect to the additional ground that venue was improper, the Court noted that venue against a foreign defendant is determined in accordance with the general venue statute, which permits venue against a foreign defendant in "any judicial district."
AxxonSoft US / Ltd.
Two other defendants also filed a Motion to Dismiss for Lack of Personal Jurisdiction, and the Plaintiff responded by filing a motion asking the Court to authorize jurisdictional discovery. Again, after reviewing the applicable standards, Judge Schneider concluded that one of the defendants was a foreign corporation with its principal place of business overseas as well, and the other defendant, its U.S. subsidiary, was headquartered and had its principal place of business in Virginia. The plaintiff attempted to establish jurisdiction by arguing that the defendants' partners operate throughout Texas and that the defendants' website was used to solicit business in Texas. Judge Schneider concluded that the defendants' operations through its business partners did not provide sufficient contacts to support the exercise of jurisdiction, and concluded that the website at issue, in contrast to the one described in the paragraph above, was not sufficient to support jurisdiction either.
As I noted above, the Plaintiff also sought jurisdictional discovery. The court denied this request, noting that while the Plaintiff had outlined the topics on which sought discovery, it had not identified any facts it "reasonably expects to discover" that would correct the deficiencies identified in its jurisdictional arguments. "It is not Plaintiff's lack of evidence that fall short," Judge Schneider wrote. "Instead, Plaintiff's theory of jurisdiction is flawed. Without more, Plaintiff cannot engage in a jurisdictional 'fishing expedition.'"
My long-time cocounsel Jeffrey Saltman of Fisch Hoffman Sigler LLP and I published an article in this week's Texas Lawyer entitled "Who’re You Calling Plaintiff-Friendly?" analyzing the verdicts in patent trials in the Eastern District of Texas in 2013.
Jeff and I were cocounsel in three patent trials conducted in the historic Harrison County Courthouse (which he is standing in front of in the photo following one of the trials) in 2013 before U.S. District Judge Michael Schneider, and I had a fourth patent trial before U.S. District Judge Ron Clark earlier in the year, so the subject was one we had some personal experience with. We also worked together on another trial before Judge Schneider in Marshall in 2011.
Jeff and I share a particular interest in the damages side of patent cases, and are finalizing a second article analyzing damages rulings in the Eastern District during 2013. (I started to include a bad joke about having a laser focus on this dynamic area, but patent damages humor is sort of an acquired taste so I decided against it). I'll follow up with a post when that one comes out as well.
Readers wanting their latest Geotag fix have been focusing on proceedings in Delaware since the cases pending in Marshall evaporated earlier this spring. And they got a big one recently, when the Delaware court granted declaratory judgment plaintiff Google's motion for summary judgment of noninfringement, and denied its motions for summary judgment on the basis of laches and invalidity
The court determined that Google had not shown an absence of disputed material facts that there was constructive notice of the infringement six years before the filing of the present lawsuit. Since the motion relied on the six-year presumption of laches, the motion was denied on this point.
Again, the court found genuine disputes of material fact as to the claims that the claims were anticipated or obvious.
For participants in the Texas cases, the arguments here might sound a little familiar – Google asserted that its accused product didn't meet three limitations of claim 1. Judge Andrews concluded that schuurely it didn't meet the "dynamic replication" requirement of the patented claims, and therefore did not address the other two arguments. Summary judgment of noninfringement GRANTED.
I'm writing on Eastern District of Texas procedure with respect to patent damages again. Intellectual Property Magazine invited me to write an analysis of the new Eastern District "Track B" procedure, and it appears in this month's issue. As it's not yet available online I have attached a copy. Download 051_052_IPM_April_2014_Feat
While the article covers the basic contours of the new provision, whether it's a good choice for a particular client is a decision that's very case-specific I've found so far in practice. I have agreed to the provision already on behalf of a defendant, and will relay how that turned out in a future post.
Versata Software, Inc. v. SAP America, Inc., 2:07cv153–RSP (4/21/14)
Judge: Roy Payne
Holding: Motion for Relief from Judgment or for a Stay Denied
After a couple of days down due to a major attack on the servers that host EDTexweblog.com, we are back up with this opinion, which raises some interesting issues.
Nope, we weren't targeted, but the attack on TypePad did make the weblog inaccessible for parts of today at least. As of this writing I can write posts, but still can't see EDTexweblog, or my personal weblog Puttering in the Study (kind of pointless to provide a link isn't it?)