Non-practicing entities also known as patent trolls have been a common problem faced by many companies seeking business development and innovation through patentable technologies. More importantly, a recent distressing trend shows that more and more small developers and companies are being targeted by these trolls. These companies may be forced to pay disproportionately high settlements or damages to the trolls or close down because of the costly expenses associated with defense.
In November 2015, a legal analytics company reported a huge rise on patent lawsuits, with many of them filed by patent trolls. Last year's spike was likely tied to several changes made to the Federal Rules of Civil Procedure, most especially the elimination of Form 18. The form let plaintiffs file a patent lawsuit without naming the specific claims or products that are infringed. Without Form 18, parties who sue for patent infringement will likely be required to provide more detailed contentions in the initial complaint.
While changes to patent law and practice may have turned the tables somewhat, innovators should still be cautious since a number of new cases were filed by patent trolls after the elimination of Form 18 on December 1, 2015. Our panel of key thought leaders and practitioners will help you better understand how patent trolls make their way through court battles and be able to strategize a winning defense against their deceptive tactics.
In a two-hour LIVE Webcast, the speakers will discuss:
Identifying Patent Trolls
Patent Troll Methods
Attacking Patent Trolls Assertions
Litigating Patent Troll Cases
Monetary Remedies
Recent Trends on Patent Litigation
To view the webcast go to this link: https://youtu.be/RasJhRDiyz4
To learn more about the webcast please visit our website: http://theknowledgegroup.org
ICT role in 21st century education and it's challenges.
Emerging Issues: Patent Trolls and Deceptive Tactics - Impacts and Implications Explored! LIVE Webcast
1. Speaker Firms and Organization:
Morris, Manning & Martin LLP
John P. Fry
Partner
Thank you for logging into today’s event. Please note we are in standby mode. All Microphones will be muted until the event
starts. We will be back with speaker instructions @ 2:55 pm. Any Questions? Please email: info@theknowledegroup.org
Group Registration Policy
Please note ALL participants must be registered or they will not be able to access the event.
If you have more than one person from your company attending, you must fill out the group registration form.
We reserve the right to disconnect any unauthorized users from this event and to deny violators admission to future events.
To obtain a group registration please send a note to info@theknowledgegroup.org or call 646.202.9344.
Presented By:
March 03, 2016
1
Partner Firms:
Kasowitz Benson Torres & Friedman LLP
Jonathan K. Waldrop
Partner
2. March 03, 2016
2
Please note the FAQ.HELP TAB located to the right of the main presentation. On this page you will find answers to the top questions asked by
attendees during webcast such as how to fix audio issues, where to download the slides and what to do if you miss a secret word. To access this
tab, click the FAQ.HELP Tab to the right of the main presentation when you’re done click the tab of the main presentation to get back.
For those viewing the webcast on a mobile device, please note:
o These instructions are for Apple and Android devices only. If you are using a Windows tablet, please follow the instructions for viewing
the webcast on a PC.
o The FAQ.HELP TAB will not be visible on mobile devices.
o You will receive the frequently asked questions & other pertinent info through the apps chat window function on your device.
o On Apple devices you must tap the screen anywhere to see the task bar which will show up as a blue bar across the top of the screen.
Click the chat icon then click the chat with all to access the FAQ’s.
o Feel free to submit questions by using the “questions” function built-in to the app on your device.
o You may use your device’s “pinch to zoom function” to enlarge the slide images on your screen.
o Headphones are highly recommended. In the event of audio difficulties, a dial-in number is available and will be provided via the app’s
chat function on your device.
3. March 03, 2016
3
Follow us on Twitter, that’s @Know_Group to receive updates for this event as well as other news and pertinent info.
If you experience any technical difficulties during today’s WebEx session, please contact our Technical Support @ 866-779-3239. We will post the
dial information in the chat window to the right shortly and it’s available in the FAQ.Help Tab on the right.
You may ask a question at anytime throughout the presentation today via the chat window on the lower right hand side of your screen. Questions
will be aggregated and addressed during the Q&A segment.
Please note, this call is being recorded for playback purposes.
If anyone was unable to log in to the online webcast and needs to download a copy of the PowerPoint presentation for today’s event, please send
an email to: info@theknowledgegroup.org. If you’re already logged in to the online Webcast, we will post a link to download the files shortly and it’s
available in the FAQ.Help Tab
4. March 03, 2016
4
If you are listening on a laptop, you may need to use headphones as some laptops speakers are not sufficiently amplified enough to hear the
presentations. If you do not have headphones and cannot hear the webcast send an email to info@theknowledgegroup.org and we will send you
the dial in phone number.
About an hour or so after the event, you'll be sent a survey via email asking you for your feedback on your experience with this event today - it's
designed to take less than two minutes to complete, and it helps us to understand how to wisely invest your time in future events. Your feedback is
greatly appreciated. If you are applying for continuing education credit, completions of the surveys are mandatory as per your state boards and
bars. 6 secret words (3 for each credit hour) will be given throughout the presentation. We will ask you to fill these words into the survey as proof
of your attendance. Please stay tuned for the secret word. If you miss a secret word please refer to the FAQ.Help tab to the right.
Speakers, I will be giving out the secret words at randomly selected times. I may have to break into your presentation briefly to read the secret
word. Pardon the interruption.
5. March 03, 2016
5
Welcome to the Knowledge Group Unlimited Subscription Programs. We have Two Options Available for You:
FREE UNLIMITED: This program is free of charge with no further costs or obligations. It includes:
Unlimited access to over 15,000 pages of course material from all Knowledge Group Webcasts.
Subscribers to this program can download any slides, white papers, or supplemental material covered during all live webcasts.
50% discount for purchase of all Live webcasts and downloaded recordings.
PAID UNLIMITED: Our most comprehensive and cost-effective plan, for a one-time fee:
Access to all LIVE Webcasts (Normally $199 to $349 for each event without a subscription). Including: Bring-a-Friend – Invite a
client or associate outside your firm to attend for FREE. Sign up for as many webcasts as you wish.
Access to all of Recorded/Archived Events & Course Material includes 1,500+ hours of audio material (Normally $299 for each
event without a subscription).
Free Certificate of Attendance Processing (Normally $49 Per Course without a subscription).
Access to over 15,000 pages of course material from Knowledge Group Webcasts.
Ability to invite a guest of your choice to attend any live webcast Free of charge (Exclusive benefit only available for PAID
UNLIMITED subscribers).
6 Month Subscription is $499 with No Additional Fees Other options are available.
Special Offer: Sign up today and add 2 of your colleagues to your plan for free Check the “Triple Play” box on the sign-up
sheet contained in the link below.
https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
6. March 03, 2016
6
Knowledge Group UNLIMITED PAID Subscription Programs Pricing:
Individual Subscription Fees: (2 Options)
Semi-Annual: $499 one-time fee for a 6 month subscription with unlimited access to all webcasts, recordings, and materials.
Annual: $799 one-time fee for a 12 month unlimited subscription with unlimited access to all webcasts, recordings, and materials.
Group plans are available. See the registration form for details.
Best ways to sign up:
1. Fill out the sign up form attached to the post conference survey email.
2. Sign up online by clicking the link contained in the post conference survey email.
3. Click the link below or the one we just posted in the chat window to the right.
https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
Questions: Send an email to: info@theknowledgegroup.org with “Unlimited” in the subject.
7. Partner Firms:
March 03, 2016
7
Kasowitz, Benson, Torres & Friedman LLP is a national law firm primarily
focusing on complex commercial litigation. The firm’s highly talented
lawyers are committed to pursuing creative, aggressive and innovative
approaches to our clients’ most challenging legal matters. Our clients
include leading companies in the high-tech, manufacturing, chemical,
computer, energy, entertainment, consumer products, pharmaceutical and
telecommunications industries, as well as major hedge funds, private equity
firms, commercial banks, real estate developers and investors, regulated
utilities and individuals. Our lawyers have been recognized by, among
others,Chambers USA, The Legal 500, Benchmark Litigation, Best Lawyers
in America, Law360 and Lawdragon for excellence in their fields. The firm
has offices in New York, Washington, DC, Silicon Valley, Los Angeles,
Houston, Atlanta, San Francisco, Miami, and Newark.
Morris, Manning & Martin (MMM) is an AmLaw 200 law firm with national and
international reach. The firm is dedicated to the constant pursuit of its clients’
success. To provide clients with optimal value, the firm combines market-
leading legal services with a total understanding of clients’ needs to
maximize effectiveness, efficiency and opportunity.
MMM enjoys national prominence for its intellectual property, litigation,
technology, real estate, corporate, healthcare, energy & infrastructure,
capital markets, environmental, insurance, and timberland & forest products
practices. The firm has offices in Atlanta, Raleigh-Durham, Savannah,
Beijing and Washington, D.C. and an alliance with GCN in São Paulo, Brazil.
8. Brief Speaker Bios:
Jonathan K. Waldrop
Jonathan K. Waldrop represents industry leading companies in patent and trademark litigation involving interactive web technologies,
video-on-demand telecommunications, cable technology, computer-assisted sales processes, medical devices, cooking ovens,
gaming systems and complex financial transactions. He is also experienced in handling commercial and antitrust litigation matters.
Jon’s clients include Google, YouTube and Adobe, world-leading technology companies, and Cox Communications, the third largest
cable television provider in the U.S. He has acted as lead trial counsel in many cases for his clients and has a history of achieving
favorable jury verdicts.
March 03, 2016
8
John P. Fry
John Fry is a Partner in Morris Manning and Martin’s Technology and Intellectual Property Litigation Practice, as well as the practice
group leader. Mr. Fry practices primarily in the areas of patent, trademark and copyright infringement, unfair competition and trade
secret litigation with a secondary emphasis on the strategic acquisition and management of intellectual property, particularly in the
international context, and on complex patent, trademark and copyright license agreements, technology and software development
agreements and concept evaluation agreements. He also counsels clients on antitrust issues, particularly in the area of the antitrust
implications of intellectual property enforcement and licensing. Mr. Fry’s practice covers a wide variety of industries, including
information technology, electronics, electrical distribution, telecommunications, manufacturing and chemical. In 2010, Mr. Fry retired
as a Captain from the U.S. Navy after 30 years of combined Active and Reserve Service.
► For more information about the speakers, you can visit: https://theknowledgegroup.org/event-homepage/?event_id=1573
9. Non-practicing entities also known as patent trolls have been a common problem faced by
many companies seeking business development and innovation through patentable
technologies. More importantly, a recent distressing trend shows that more and more small
developers and companies are being targeted by these trolls. These companies may be
forced to pay disproportionately high settlements or damages to the trolls or close down
because of the costly expenses associated with defense.
In November 2015, a legal analytics company reported a huge rise on patent lawsuits, with
many of them filed by patent trolls. Last year's spike was likely tied to several changes made
to the Federal Rules of Civil Procedure, most especially the elimination of Form 18. The form
let plaintiffs file a patent lawsuit without naming the specific claims or products that are
infringed. Without Form 18, parties who sue for patent infringement will likely be required to
provide more detailed contentions in the initial complaint.
March 03, 2016
9
10. While changes to patent law and practice may have turned the tables somewhat, innovators
should still be cautious since a number of new cases were filed by patent trolls after the
elimination of Form 18 on December 1, 2015. Our panel of key thought leaders and
practitioners will help you better understand how patent trolls make their way through court
battles and be able to strategize a winning defense against their deceptive tactics.
In a two-hour LIVE Webcast, the speakers will discuss:
• Identifying Patent Trolls
• Patent Troll Methods
• Attacking Patent Trolls Assertions
• Litigating Patent Troll Cases
• Monetary Remedies
• Recent Trends on Patent Litigation
March 03, 2016
10
11. Featured Speakers:
March 03, 2016
11
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
14. Developments Affecting IP Decision Making
Supreme Court precedent
Limelight v. Akamai, 134 S. Ct. 2111 (U.S. 2014)
• Divided infringement
– “A defendant is not liable for inducing infringement under §271(b) where no entity has directly
infringed under §271(a) or any other statutory provision.”
– It is not enough that all steps are performed (across multiple actors), and that one actor
encourages the other actor to perform some of the steps.
March 03, 2016
14
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
15. Developments Affecting IP Decision Making
America Invents Act
• The AIA represents the most significant change to the U.S. patent system since 1952.
March 03, 2016
15
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
16. Developments Affecting IP Decision Making
America Invents Act
• Results:
– The U.S. patent system changed from a “first to invent” to a “first inventor to file" system
– Eliminates interference proceedings
– Develops post-grant opposition (IPR)
March 03, 2016
16
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
17. Developments Affecting IP Decision Making
Supreme Court precedent
Nautilus v. Biosig Instruments, 134 S. Ct. 896 (U.S. 2014)
• Lowered standard for indefiniteness
• Old Standard: A claim is indefinite only when it is "not amenable to construction" or "insolubly
ambiguous.“
• New Standard: A patent is invalid for indefiniteness if its claims, read in light of the patent’s
specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art
about the scope of the invention.
March 03, 2016
17
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
18. Developments Affecting IP Decision Making
Supreme Court precedent
Octane Fitness v. Icon Health, 134 S.Ct. 1749 (U.S. 2014)
• Lowered the bar for finding a case “exceptional” to award attorneys’ fees to prevailing party
• Based on the totality of circumstances, an exceptional case stands out from the others with respect to:
(1) the substantive strength of a party’s litigation position considering both the governing law
and the facts of the case;
(2) the unreasonable manner in which the case was litigated.
(3) presenting subjective bad faith; or
(4) presenting exceptionally meritless claims.
• No evidentiary standard
March 03, 2016
18
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
19. Developments Affecting IP Decision Making
Supreme Court precedent
Highmark v. Allcare Health Management, 134 S. Ct. 1744 (U.S. 2014)
• All aspects of a district court’s determination of whether a case is exceptional under 35 U.S.C. § 285
is to be reviewed on appeal for abuse of discretion.
• A district court is better positioned to decide whether a case is exceptional because it lives with the
case over a prolonged period of time.
March 03, 2016
19
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
20. Top Five Developments Affecting IP Decision Making
Supreme Court precedent
• The Supreme Court has shown an unprecedented interest in patents this year.
March 03, 2016
20
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
21. Top Five Developments Affecting IP Decision Making
Supreme Court precedent
Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (U.S. 2014)
• Software patents at issue disclosed a computer-implemented scheme for mitigating settlement risk
• Held claims at issue directed to abstract idea of intermediated settlement, “an economic practice long
prevalent in our system,” patent ineligible
• Using some unspecified, generic computer to carry out abstract idea is not enough to constitute an
inventive concept
March 03, 2016
21
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
22. Developments Affecting IP Decision Making
Supreme Court precedent
Limelight v. Akamai, 134 S. Ct. 2111 (U.S. 2014)
• Divided infringement
– “A defendant is not liable for inducing infringement under §271(b) where no entity has directly
infringed under §271(a) or any other statutory provision.”
– It is not enough that all steps are performed (across multiple actors), and that one actor
encourages the other actor to perform some of the steps.
March 03, 2016
22
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
23. Developments Affecting IP Decision Making
Supreme Court precedent
Nautilus v. Biosig Instruments, 134 S. Ct. 896 (U.S. 2014)
• Lowered standard for indefiniteness
• Old Standard: A claim is indefinite only when it is "not amenable to construction" or "insolubly
ambiguous.“
• New Standard: A patent is invalid for indefiniteness if its claims, read in light of the patent’s
specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art
about the scope of the invention.
March 03, 2016
23
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
24. Developments Affecting IP Decision Making
Supreme Court precedent
Octane Fitness v. Icon Health, 134 S.Ct. 1749 (U.S. 2014)
• Lowered the bar for finding a case “exceptional” to award attorneys’ fees to prevailing party
• Based on the totality of circumstances, an exceptional case stands out from the others with respect to:
(1) the substantive strength of a party’s litigation position considering both the governing law
and the facts of the case;
(2) the unreasonable manner in which the case was litigated.
(3) presenting subjective bad faith; or
(4) presenting exceptionally meritless claims.
• No evidentiary standard
March 03, 2016
24
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
25. Developments Affecting IP Decision Making
Impact of NPEs
March 03, 2016
25
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
26. Top Five Developments Affecting IP Decision Making
#5: Impact of NPEs
• As of 2004, the cost of defending against a patent infringement suit is typically $1 million or more
before trial, and $2.5 million for a complete defense, even if successful.
• Because the costs and risks are high, defendants may settle even non-meritorious suits they consider
frivolous for several hundred thousand dollars.
• The uncertainty and unpredictability of the outcome of jury trials encourages settlement.
March 03, 2016
26
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
27. Developments Affecting IP Decision Making
Impact of NPEs
• In 2011, United States business entities incurred $29 billion in direct costs because of patent trolls.
• Lawsuits brought by “patent assertion companies” made up 61% of all patent cases in 2012,
according to the Santa Clara University School of Law.
March 03, 2016
27
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
28. Developments Affecting IP Decision Making
Impact of NPEs
• From 2009 through mid-2013, Apple Inc. was the defendant in 171 lawsuits brought by non-practicing
entities (NPEs), followed by Hewlett-Packard (137), Samsung (133), AT&T(127), Dell (122), and
Google (103).
• In 2013, Apple (59); Amazon (50); AT&T (45); Google (39); and Dell (39).
March 03, 2016
28
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
29. Developments Affecting IP Decision Making
Impact of NPEs
• Patent troll-instigated litigation, once mostly confined to large companies in patent-dependent
industries such as pharmaceuticals, came to involve companies of all sizes in a wide variety of
industries.
March 03, 2016
29
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
30. Developments Affecting IP Decision Making
Impact of NPEs
• In 2005 patent trolls sued 800 small firms (those with less than $100 million annual revenue).
• The number grew to nearly 2,900 such firms in 2011.
– The median defendant's annual revenue was $10.3 million.
March 03, 2016
30
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
31. Developments Affecting IP Decision Making
Impact of NPEs
• A July 2014, PricewaterhouseCoopers study concluded that non-practicing entities (NPEs) accounted
for 67% of all patent lawsuits filed—up from 28% five years earlier.
• Although the median monetary award size decreased over time, the median number of awards to
NPEs was three times higher than those of practicing companies.
March 03, 2016
31
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
32. Developments Affecting IP Decision Making
Impact of NPEs
• Emphasis became progressively focused on patents covering software rather than chemical or
mechanical inventions.
• Due to the difficulty in defining the scope of software patent claims in comparison to the more easily
defined specific compounds in chemical patents.
March 03, 2016
32
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
33. Developments Affecting IP Decision Making
Impact of NPEs
• A GAO study concluded that the proportion of patent lawsuits initiated by trolls hadn’t changed
significantly from 2007 through 2011.
• The GAO speculated that the raw numerical increase in both troll and non-troll instituted lawsuits may
be due to the “inherently imprecise” language and a lack of common, standardized, scientific
vocabulary in constantly evolving emerging technologies such as software.
March 03, 2016
33
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
34. Developments Affecting IP Decision Making
Impact of NPEs
• Software patents were described as "particularly prone" to abuse because software is "inherently
conceptual“
• Research indicates that a software patent is 4 times as likely as a chemical patent to be involved in
litigation, and a software "business method patent" is 13 times more likely to be litigated.
March 03, 2016
34
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
35. Core vs. Non-Core IP Assets
• This is an approach to IP portfolio management that takes into account a company’s strategic goals,
revenue goals and core competency. Factoring all these together, a company can classify IP and
products as core and non-core and develop and IP strategy for protecting those assets.
March 03, 2016
35
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
36. Most Challenging Patent Issues Facing In-House Counsel
• Global prosecution
• Managing costs
• International IP regimes
March 03, 2016
36
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
37. Most Important and Influential Patent Litigation Trends
• More U.S. patent litigation (if not from NPEs, then the fight over who controls the robotics landscape)
• More foreign patent litigation
• More legal uncertainty on the state of the law
• More need for strategic, smart, and nimble in-house and outside counsel
March 03, 2016
37
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
38. Introduction
John Fry is a Partner in Morris Manning and Martin’s Technology and Intellectual Property Litigation Practice, as well as the
practice group leader. Mr. Fry practices primarily in the areas of patent, trademark and copyright infringement, unfair
competition and trade secret litigation with a secondary emphasis on the strategic acquisition and management of
intellectual property, particularly in the international context, and on complex patent, trademark and copyright license
agreements, technology and software development agreements and concept evaluation agreements. He also counsels
clients on antitrust issues, particularly in the area of the antitrust implications of intellectual property enforcement and
licensing. Mr. Fry’s practice covers a wide variety of industries, including information technology, electronics, electrical
distribution, telecommunications, manufacturing and chemical. In 2010, Mr. Fry retired as a Captain from the U.S. Navy after
30 years of combined Active and Reserve Service.
March 03, 2016
38
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
40. Identifying Patent Trolls
• Attempts to define in Patent Reform Legislation have been largely unsuccessful
• “the Court shall award the recovery of full costs to any prevailing party asserting invalidity or
noninfringement, including reasonable attorneys' fees … if the court determines that the
adverse party” was not (1) the original inventor, (2) an exploiter of the patent through sale of an
item covered by the patent, or (3) a university or technology transfer organization, “unless the
court finds that exceptional circumstances make an award unjust.” 2013 Shield Act, H.R. 845.
• patent assertion entities include entities that: “do not practice their patents, do not help with
technology transfer, wait until after industry participants have made irreversible investments
before asserting their patents, acquire patents solely for the purpose of extracting payments
from alleged infringers, take advantage of their non-practicing entity status during litigation,
acquire patents with broad or unclear claims, and hide behind numerous shell companies.”
2013 White House Study.
March 03, 2016
40
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
41. Attacking Patent Troll Assertions
• The Patent Abuse Reduction Act (S. 1013), would have required the court to award attorneys' fees to
any party, plaintiff, or defendant unless the position and conduct of the non-prevailing party was
objectively reasonable or substantially justified, or exceptional circumstances make the award unjust.
Thus, this act seeks to curb abusive litigation practices that are neither reasonable nor justified,
instead of focusing on the entity bringing the action.
• Alternate proposal to remove the word “exceptional” from 35 U.S.C. §285, which states that, “[t]he
court in exceptional cases may award reasonable attorney fees to the prevailing party.”
March 03, 2016
41
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
42. Attacking Patent Troll Assertions
• Impact of Octane Fitness v. Icon Health & Fitness (Sup. Ct. 2014)
• Redefined “exceptional” to be a case “that stands out from others with respect to the substantive
strength of a party’s litigating position or the unreasonable manner in which the case was
litigated.” District courts are to “determine whether a case is ‘exceptional’ in the case-by-case
exercise of their discretion, considering the totality of the circumstances.”
• Highmark v. Allcare (Sup. Ct. 2014)
• Attorney fee award reviewed for abuse of discretion.
March 03, 2016
42
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
43. Attacking Patent Troll Assertions
March 03, 2016
43
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
44. Attacking Patent Troll Assertions
• Vehicle Operation Technologies LLC v. American Honda Motor Co., Inc., et al., 67 F. Supp. 3d 637
(D. De. 2014)
• Granted Rule 11 sanctions for advocating claim construction position that was not objectively
reasonable; pre-suit investigation unreasonable
• Denied monetary sanctions only because of failure of notice
• Icon Health & Fitness, Inc. v. Octane Fitness, LLC, 112 F. Supp. 3d 888 (D. Mi. 2015) (Remand from
Supreme Court)
• Found to be an exceptional case and awarded fees under 35 U.S.C. §285
• Arguments advanced by Icon bore no resemblance to what the ‘710 patent disclosed and
covered
• No reasonable pre-filing infringement analysis
March 03, 2016
44
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
45. Rule 12 Practice
• Abrogation of form 18 for direct infringement
• Judge Dyk’s separate opinion in McZeal concluded that to provide adequate notice, the
complaint should list the specific asserted claims, the features of the accused product that are
alleged to infringe and an explanation of how the accused product infringes
• IPO: identification of claims and a statement explaining infringement
• Core Wireless Licensing v. Apple, 1025 WL 4910427 (EDTX August 13, 2015) (pre rule change
regarding pleading indirect infringement)
• Complaint “fails to allege any facts that establish a plausible inference that Apple had the
specific intent to induce its customer's actions, and knowledge that those actions
amounted to infringement.”
• “In other words, generic allegations that an alleged infringer provides instructional
materials along with the accused products, without more, are insufficient to create a
reasonable inference of specific intent for the purposes of an induced infringement claim.”
March 03, 2016
45
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
46. Pleading Standard H.R. 9, 114th Cong. (2015)
• each patent allegedly infringed;
• each claim of each patent allegedly infringed;
• each process, machine, manufacture, or composition of matter (“accused instrumentalities”) alleged to
infringe the claim;
• the name or model number (or a representative model number) of each accused instrumentality, or if
there is no name or model number, a description of each accused instrumentality;
• for each identified claim, a description of the elements alleged to be infringed by the accused
instrumentality and how the accused instrumentality is alleged to infringe those elements; and
• for each claim of indirect infringement, the acts of the alleged infringer that contribute to or induce
direct infringement
March 03, 2016
46
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
47. Rule 12(b) Practice
• Lack of Personal Jurisdiction May not be Dead
• Smaller companies sued for infringement may not have large jurisdictional footprint
• Possible dismissal without prejudice
March 03, 2016
47
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
48. Not All Troll Cases are Created Equal
• VirnetX Inc. v. Apple Inc., Civil Action No. 6:12-cv-855-RWS (EDTX, February 3, 2016)
• Jury awarded VirnetX $625.6 million
• Jury found infringement to be willful
• eDekka LLC v. 3Balls.com, Inc., Civil Action No. 2:15-cv-541-JRG (EDTX, December 17, 2015)
• Judge Gilstrap found no claim construction proceeding was necessary and that no reasonable
litigant could have expected success on the merits in light of the pending Alice motions
• Exceptional case under 35 U.S.C. §285
March 03, 2016
48
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
49. Gaining Leverage in Low Value Cases
• Effective use of joint defense groups
• Organize early
• Multiple representations
• 12(b) and transfer practice
• Can be done fairly economically by sharing briefs or parts of briefs
• Ample motions in prior cases
• Putting plaintiff on notice claim is frivolous
• Early and often to set up possible Rule 11 or 35 U.S.C. §285 motion
• Accelerating the Markman schedule
• Early Rule 11 motion may be predicated on claim elements that do not need construction as in
eDekka
• Investigate assignment history and payment of maintenance fees
• Insurance and indemnification
March 03, 2016
49
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
50. What’s Next? Willfulness
• In re Seagate, 497 F.3d 1360, 1370 (Fed. Cir. 2007) (en banc) (overruling Underwater Devices
standard for willfulness, requiring a showing of objective recklessness and abandoning affirmative
duty of due care)
• Stryker Corp. v. Zimmer Inc., Supreme Court Case No 14-1520 and Halo Electronics Inc. v. Pulse
Electronics Inc., Supreme Court Case No. 14-1513 – Oral Argument on Tuesday 2/23/2016
• Supreme Court granted cert. to consider standard under which the trial court can enhance up to
treble damages under 35 U.S.C. §284
• Is willfulness required for enhanced damages?
• USPTO filed amicus brief urging rejection of Federal Circuit test
March 03, 2016
50
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
51. March 03, 2016
51
Contact Info:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres &
Friedman LLP
E: JWaldrop@kasowitz.com
T: (650) 453-5425
John P. Fry
Partner
Morris, Manning & Martin LLP
E: jfry@mmmlaw.com
T: (404) 210-5841
52. ► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type
your question in the box that appears and click send.
► Questions will be answered in the order they are received.
Q&A:
March 03, 2016
52
SEGMENT 1:
Jonathan K. Waldrop
Partner
Kasowitz Benson Torres & Friedman LLP
SEGMENT 2:
John P. Fry
Partner
Morris, Manning & Martin LLP
53. March 03, 2016
53
Welcome to the Knowledge Group Unlimited Subscription Programs. We have Two Options Available for You:
FREE UNLIMITED: This program is free of charge with no further costs or obligations. It includes:
Unlimited access to over 15,000 pages of course material from all Knowledge Group Webcasts.
Subscribers to this program can download any slides, white papers, or supplemental material covered during all live webcasts.
50% discount for purchase of all Live webcasts and downloaded recordings.
PAID UNLIMITED: Our most comprehensive and cost-effective plan, for a one-time fee:
Access to all LIVE Webcasts (Normally $199 to $349 for each event without a subscription). Including: Bring-a-Friend – Invite a
client or associate outside your firm to attend for FREE. Sign up for as many webcasts as you wish.
Access to all of Recorded/Archived Events & Course Material includes 1,500+ hours of audio material (Normally $299 for each
event without a subscription).
Free Certificate of Attendance Processing (Normally $49 Per Course without a subscription).
Access to over 15,000 pages of course material from Knowledge Group Webcasts.
Ability to invite a guest of your choice to attend any live webcast Free of charge (Exclusive benefit only available for PAID
UNLIMITED subscribers).
6 Month Subscription is $499 with No Additional Fees Other options are available.
Special Offer: Sign up today and add 2 of your colleagues to your plan for free Check the “Triple Play” box on the sign-up
sheet contained in the link below.
https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
54. March 03, 2016
54
Knowledge Group UNLIMITED PAID Subscription Programs Pricing:
Individual Subscription Fees: (2 Options)
Semi-Annual: $499 one-time fee for a 6 month subscription with unlimited access to all webcasts, recordings, and materials.
Annual: $799 one-time fee for a 12 month unlimited subscription with unlimited access to all webcasts, recordings, and materials.
Group plans are available. See the registration form for details.
Best ways to sign up:
1. Fill out the sign up form attached to the post conference survey email.
2. Sign up online by clicking the link contained in the post conference survey email.
3. Click the link below or the one we just posted in the chat window to the right.
https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
Questions: Send an email to: info@theknowledgegroup.org with “Unlimited” in the subject.
55. March 03, 2016
55
ABOUT THE KNOWLEDGE GROUP
The Knowledge Group is an organization that produces live webcasts which examine regulatory
changes and their impacts across a variety of industries. “We bring together the world's leading
authorities and industry participants through informative two-hour webcasts to study the impact of
changing regulations.”
If you would like to be informed of other upcoming events, please click here.
Disclaimer:
The Knowledge Group is producing this event for information purposes only. We do not intend to
provide or offer business advice.
The contents of this event are based upon the opinions of our speakers. The Knowledge Group does
not warrant their accuracy and completeness. The statements made by them are based on their
independent opinions and does not necessarily reflect that of The Knowledge Group‘s views.
In no event shall The Knowledge Group be liable to any person or business entity for any special,
direct, indirect, punitive, incidental or consequential damages as a result of any information gathered
from this webcast.
Certain images and/or photos on this page are the copyrighted property of 123RF Limited, their
Contributors or Licensed Partners and are being used with permission under license. These images
and/or photos may not be copied or downloaded without permission from 123RF Limited
Editor's Notes
Octane: Burden of proof is preponderance of the evidence.
Brooks was decided in 2005.
Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 73 U.S.P.Q.2d 1457 (Fed. Cir. 2005).
From April 29, 2014 to March 1, 2015, district courts awarded fees in twenty-seven out of sixty-three cases. This rate, approximately 43%, is at least two times greater than the fee-shifting award rate in previous years.
In fact, in the 12 months preceding Octane, only 13% of § 285 motions were granted.
VOT
Substitute counsel for VOT also should have investigated before taking case on and advocating the unreasonable positions in Markman and Rule 11 hearings.
McZeal was one of the Federal Circuit cases that upheld compliance with Form 18 as sufficient for pleading direct infringement
12(b)(6) or
12(e) more definite statement
In the digital/ internet age, easy to think that everyone is everywhere, but always take a step back
Impact of a lower standard could embolden trolls as it is seen as a pro patentee move if the standard is relaxed.