Patent Litigation In A Rocket Docket After Markman II: After Liftoff – No Turning Back

1. Ocean Tomo Auction October 28-30, 2008 Chicago, Illinois Patent Litigation In A Rocket Docket After Markman II:After Liftoff – No Turning Back Joseph T. Miotke 414.225.4976 jtmiotke@michaelbest.com Marshall J. Schmitt 312.596.5828 mjschmitt@michaelbest.com

2. After Liftoff – No Turning Back

3. Agenda • What is a rocket docket? • Where are the rocket dockets? • How did we end up with rocket dockets? • How are the rocket dockets different? • How do you litigate in a rocket docket?

4. What Is A Rocket Docket? • A rocket docket is a Federal Court or agency that disposes of its cases much faster when compared with other Federal Courts or agencies.

5. Rocket Dockets – The Need for Speed • Special rules for handling patent cases • Trial dates within a year of filing the complaint • Little tolerance for discovery disputes • Willingness to resolve cases on summary judgment

6. Where Are the Rocket Dockets? • Eastern District of Texas (E.D. of Texas) • Western District of Wisconsin (W.D. of Wisconsin) • Eastern District of Virginia (E.D. of Virginia) • International Trade Commission (ITC, based in Washington, D.C.)

7. How Did We End Up With Rocket Dockets? Two Events: • Explosion in patent litigation • Markman decision

8. How Did We End Up With Rocket Dockets? • Markman – U.S. Supreme Court put district court judges in charge of “claim construction” • “Claim Construction” – Defining the terms used in the patent claims

9. How Did We End Up With Rocket Dockets? • Before 1996, practices varied • After Markman, judge’s role became central • Patent litigation is driven by Markman • Judge now controls the pace and course of a patent case

10. How Did We End Up With Rocket Dockets? • Single most influential event on the outcome of a case • “Navigating Scylla and Charybdis,” (Judge Barbara Crabb, W.D. Wisc.)

11. Each Rocket Docket Has Its Own Personality And Story • E.D. of Texas - Current Hotbed of Patent Litigation • W.D. of Wisconsin - Fastest of the Fast-tracks • E.D. of Virginia - Longest Tradition • International Trade Commission - Different Animal

12. Eastern District of Texas • Mother Ship • From P.I. to I.P. • Texas Tort Reform • Well Dried Up

13. Eastern District of Texas • The Tipping Point - Judge T. John Ward • Appointed – 1999 • Civil litigator in E.D. of Texas • Intrigued by patent cases • Defended Hyundai Electronics • Sought out patent cases

14. Eastern District of Texas • Judge Leonard Davis • Patent-savvy • Jury pool – FOPO – friend of patent owners • “Here in the Eastern District of Texas, we own guns, we love our property rights, and we’ll use our guns to protect our property rights.” • Oil rights and patent rights conceptually similar

15. Eastern District of Texas – Developments • Singleton v. Volkswagen of America, Inc. • More patent cases might be transferred • True impact unclear – PI case • Judge Clarke • Application of e-Bay

16. Western District of Wisconsin • The Tipping Point – Judge John C. Shabaz • Appointed to bench in 1981 • Maintained tight control of docket from start • Trial dates within 9 months of filing • No-nonsense judge • Senior status in early 2008

17. Western District of Wisconsin • Judge Barbara Crabb • Appointed in 1979 • Ran docket efficiently from start • Not quite as fast as Shabaz • Trial date within 14 months of filing

18. Western District of Wisconsin • PriceWaterhouseCoopers Rank • 2007 • Most patent plaintiff-friendly venue • Plaintiff wins most often on summary judgment and at trial • 2008 • Fifth most patent plaintiff-friendly venue • Still first for plaintiff success on summary judgment

19. Western District of Wisconsin • Second fastest time to trial – 10.4 months (2007) • Fastest time to disposition – 4.6 months (2007) • Recently slowed down somewhat in February 2008 • Speed expected to return • More patent cases last ten years

20. Western District of Wisconsin • Complex jury pool – Diverse group • University of Wisconsin – Highly educated jurors

21. Western District of Wisconsin • Lowest claim construction reversal rate

22. Eastern District of Virginia, Alexandria Division • The Tipping Point – Judge Albert V. Bryan • 40 years ago • “The old joke used to be that in front of Judge Bryan, the only grounds for a delay were a death in the family – your own.”

23. International Trade Commission • Government agency • Prevent infringing products from entering the U.S. • Injunctions only • No monetary damages • Very fast

24. How Do You Litigate in the Rocket Docket? • Each venue unique • Local Rules – Appendices

25. Highlights – E.D. of Texas • Local counsel critical • Local patent rules (Appendix M) • Infringement contentions not later than 10 days before Initial Case Management Conference

26. Highlights – W.D. of Wisconsin • No local patent rules • Judges have specific procedures for patent cases • Infringement contentions within five weeks of first scheduling conference • Failure to serve sufficiently detailed infringement contentions has resulted in sanctions

27. Highlights – W.D. of Wisconsin • Judges Crabb and Crocker • Markman hearings before summary judgment • Judge Crabb – Explanation how construction impacts outcome • Judge Shabaz • Claim construction with summary judgment

28. Highlights – E.D. of Virginia • No local rules specific to patent cases • All cases proceed fast

29. Highlights – International Trade Commission • Goal – protect U.S. industry from unfair competition • Investigation instituted and case assigned to ALJ • Must convince the ITC to initiate investigation • FAST • Liberal and fast discovery • Discovery responses due within ten days

30. Highlights – International Trade Commission • Trial-like hearing before ALJ • No jury • ALJ issues Initial Determination • Initial Determination may be reviewed by the ITC • If Exclusion Order issued, presidential review period • Decisions reviewed by the Federal Circuit

31. Moral • A safe landing and a successful mission in a rocket docket require extensive preparation before you take off because the ride is usually fast and wild and there is no time to catch up.

32. APPENDICES1. Checklists For Plaintiffs And Defendants In A Rocket Docket2. E.D. Of Texas Local Rules3. E.D. Of Texas Local Rules for Patent Cases4. W.D. Of Wisconsin Local Rules5. E.D. Of Virginia Local Rules6. N.D. Of California Local Rules For Patent Cases

33. Checklist for Plaintiffs in a Rocket Docket • Study the judges in the potential venues • What types of claim construction orders have they made? • How have they handled other issues that might be relevant in your case?

34. Checklist for Plaintiffs in a Rocket Docket • Study the local bar if your lead counsel does not have a presence in the venue • Have your case ready to go before filing the complaint • Conduct detailed studies of patent, its file history, and any known prior art; identify and assess any weaknesses before filing

35. Checklist for Plaintiffs in a Rocket Docket • Have your case ready to go before filing the complaint (continued) • Gather and review all documents and have documents ready for production to opponent before filing complaint • Ensures there are no ticking bombs in the documents • Allows for time to further investigate any potentially problematic issues arising from the documents • Having your documents ready for production enables you to put enormous pressure on you adversary to rapidly produce their documents

36. Checklist for Plaintiffs in a Rocket Docket • Prepare claim constructions and supporting arguments before filing the complaint • Claim construction is the single most important event in a patent case • Having claim constructions prepared before filing enables you to more fully assess the defendant’s invalidity and noninfringement arguments as they are made

37. Checklist for Plaintiffs in a Rocket Docket • Locate and interview the patent inventors • Often the inventors are no longer employed by the plaintiff • Consider retaining the inventors as consulting experts, which generally makes them more cooperative if they are no longer current employees • Risk exists as the defendant will attempt to portray this as paying the inventors for their testimony

38. Checklist for Plaintiffs in a Rocket Docket • Locate and interview the patent inventors (continued) • Stress that payment to the inventors is not in exchange for their testimony and instead compensation for their specific expertise to the subject matter of the case. Hourly rate must be reasonable and in accord with the expert normally charges • Assess whether the inventors have an “axe to grind” with the current patent owner • Consider what patent infringement counterclaims the target defendant might bring

39. Checklist for Plaintiffs in a Rocket Docket • Locate and hire technical expert witness • The technical witness is often the most important witness at the summary judgment and trial stages • Locating a technical expert can be a long, difficult process, especially in highly specialized fields • Request assistance from the patent owner in locating candidates • Typically it is a good idea to retain an expert search firm, which operate similar to executive headhunter firms

40. Checklist for Plaintiffs in a Rocket Docket • Locate and hire technical expert witness (continued) • The “perfect” expert must have superior technical skills and have a personality that will appeal to the jury • A blend of both academic and industry experience is typically preferred • Study the expert’s credentials and prior publications • Could be a landmine later on if not fully investigated • Assess any relationships the expert candidate has with the plaintiff or defendants

41. Checklist for Plaintiffs in a Rocket Docket • Locate and hire damages experts • Typically easier to locate damages experts than to locate technical experts, but equally important • Preparation of damages models is time-consuming and will involve input from the technical expert and patent owner’s business people

42. Checklist for Plaintiffs in a Rocket Docket Moral – Be ready before filing the complaint • Choice of forum • Substance of case • Discovery

43. Checklist for Defendants in a Rocket Docket • Call patent litigators right away, as time is critical • Determine if there is any way to have the case transferred from the rocket docket venue • More difficult in the W.D. of Wisconsin and E.D. of Texas when compared to the E.D. of Virginia • Volkswagen from the Fifth Circuit might change the rules

44. Checklist for Defendants in a Rocket Docket • Determine whether patent infringement counterclaims can be asserted against the plaintiff • Can provide significant leverage to settle the case • Potential of catching the plaintiff off guard with a substantial counterclaim • Can create a “mutually assured destruction” scenario for the plaintiff • Consider bringing reexamination proceedings

45. Checklist for Defendants in a Rocket Docket • If there are other defendants in the case, collaborate with them to share expenses and prepare a unified defense if at all possible • Locate technical and damages expert witnesses right away • Scour the earth for “prior art” to invalidate the patents • Search for “on-sale” bar activities, as these can be a “silver bullet” to knock out the patent

46. Checklist for Defendants in a Rocket Docket Moral – Try To Change The Rules Of The Game • Transfer • Counterclaim • Reexamination