The Empire Strikes Back

It appears my comment regarding a recent New York Times article on "patent trolls" -- and my suggestion that defense lawyers might be the major beneficiaries of the so-called "troll" problem --  has touched a nerve.  

For some reason Mr. Guiliano takes me to task for simply accepting the figures provided in the article and doing some back of the envelope, but nevertheless sound, calculations based thereon.  (In my comment, I simply read and directly quoted what was reported in the New York Times -- you know, "All The News That's Fit To Print" etc.)  It was that article, and not I, that reported: (1) "United States companies — most of them small or medium-sized — spent $29 billion in 2011 on patent assertion cases," (2) "only about $6 billion of that money wound up in the hands of inventors,”  and (3) "As for the other $23 billion, most of it goes to legal expenses..."  (In the article's defense, it quotes a "study" and its co-author in making those claims.)  If those facts and figures are not correct, take it up with the New York Times and its sources, not me. 

Mr. Guiliano goes on to say, " So, if Mr. Mann had read the report he linked to, he would have learned that the legal costs totaled $6.67 billion, less than 1/3 of his $20 billion figure."  True, I did not read the report, I merely relied on what one of its co-authors had to say about it to a NYT reporter.  If he misrepresents the contents of his own report, and does so to a reporter for perhaps the nation's best known paper, why is that my fault?

On a more substantive and serious note, the point here is that glib statements about patent trolls, and popular press articles about unsavoury individuals and their lawyers gaming the system, should not be accepted at face value and should not escape critical review. 

Here I simply took a thinly disguised anti-patent-troll article at face value and drew some reasonable conclusions from what was reported.  When that article unintentionally leads to some less than flattering conclusions about the defense bar, the backtracking and explaining begin.

Mr. Guiliano is absolutely correct when he says, " Mr. Mann has not made that claim in his blog post...[he] relied on a reporter's account of an interview with James Bessen and then did a quick calculation."  Indeed, nowhere does Mr. Guiliano point to any flaw in my calculation.  Instead, the bulk of his post is directed toward showing that the cited study does not actually say what its own co-author said it does, and does not actually mean what its own co-author stated to a New York Times reporter. 

My rationale for my comment is simple;  It is based on face value acceptance of what those in the "anti-troll" camp claim, followed up with some basic arithmetic.  What, pray tell, is the rationale for Mr. Guiliano's snide comment at the end of his post?





Say it ain't so!

Last week I asked how it is that large firms somehow manage to bill their clients millions to dispose of frivolous cases based on clearly invalid patents that couldn't possibly be infringed anyway.

Well, maybe the financial realities facing "Big Law" might have something to do with it.

Who's Driving Up The Costs of Litigation? (Or, "Maybe The Recession's Worse Than We Think!")

As contingent-fee lawyers and supposed "patent trolls" to boot, my colleagues and I are blamed for many of the ills that plague society.  It is we -- who do not get paid unless we are successful -- who file merit-less cases, prolong litigation, waste resources, and cause innocent defendants to pay their lawyers upwards of two million dollars on average to defend themselves.  It's a  wonder we sleep at night.

These thoughts brought an admittedly self-congratulatory smirk to my face as I received the recent decision of the Federal Circuit affirming the District Court's denial of fees in a case we handled that never should have gone on as long as it did.

Now in fairness, we lost the case on the merits, the District Court held the patent invalid, and we took our lumps as we knew we might when we went in.  No complaint there.

Not content with their victory, our opponents moved for fees.  Again, no complaint as it is their right to ask. 

What I do find amusing is that our opponents chose to reject our early offer of a "walk away" settlement, chose to file a hopeless appeal of the District Court's denial of fees and -- most amusingly -- traveled 3000 miles each way to deliver a futile 15 minute oral argument against an opponent who wasn't even there.  (We, being the wastrels we are, elected to waive oral argument and rest on our brief.)

So there you have it.  An hourly-based firm will happily spend thousands of dollars of its client's money to travel 3000 miles to argue against an empty chair, but it's the contingent fee guys who are driving up the costs of litigation.

Yeah, somebody really ought to do something about us.

In Defense of Contingent Fee Patent Lawyers

Many thanks to Steve Nipper, who, on today's "rethink(ip)" blog, posts a link to Joseph Hosteny's recent "Litigators Corner" article in the August, 2005 issue of IP Today. Many thanks also to Mr. Hosteny for airing some perhaps unpleasant truths about what goes on inside large law firms.

In case anyone wonders why patent litigation is so expensive, Mr. Hosteny provides some truthful and amusing insights. I chuckle because I know all too well the games that are played, having once been a large firm lawyer myself.

Big firms love patent cases (provided the client is loaded) because they are a license to print money. The opportunities for procedural shenanigans are almost limitless, what with Markman hearings, bifurcation of damages, requests for reexamination and all. And of course, it's absolutely critical to make sure you get all 50 identical copies of the same document as requested, not just the 49 actually provided. (You never know when a crucial admission might be penciled on the margin of the missing copy.) Sure there is a lot of overlap, and it might be hard for laypeople to see what these efforts have to do with anything important, but hey, what's money at a time like this?

What I've always enjoyed about contingent work is that it is lawyering in the purest form -- you don't do something unless it will realistically advance your case. Critics accuse contingent-fee lawyers of driving up legal expenses but I've never seen how that is the case -- even when I was on the other side and billing by the hour. (On the contrary, and more than once, I thought I really owed my contingent-fee opponents at least a case of wine or scotch for having helped me hit my hours for the year -- and then some.)

The truth is, today, with advanced technology, legal fees should be going down, not up. Most courts permit out-of-town lawyers to appear by phone for routine hearings. Depositions can be conducted via video to avoid travel time and minimize expense. PACER and other on-line resources make it easy to access well-researched briefs and memoranda on issues that come up over and over again. Still other on-line services make the expense and burden of a paper-based legal library obsolete too. Finally, is it really necessary that law firms be housed in the most expensive downtown real estate available? (It is, if what the firm is really selling is CYA insurance to nervous in-house counsel who will have a lot of explaining to do if a case goes south.)

The big problem for new contingent-fee lawyers is knowing which battles are, and which are not, worth fighting. It takes a bit of nerve and confidence not to waste time and effort on discovery battles or procedural matters that don't really affect the outcome of a case.

Mr. Hosteny's article is a good education for those just entering the contingent-fee field. Efficiency and economy are vital. It's also educational for those who may be on the receiving end of huge legal bills and wonder how they happen, assuming they care.

The Contingent Case Mindset

Contingent fee litigation differs from traditional hourly billing in a way that is brutally direct and fundamentally honest. If you don't get results, you don't get paid. There's a kind of rough justice there I find appealing.

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Why Contingent Fees?

The questions often come up. Why should a lawyer take a case on a contingency? Why should a client seek or agree to a contingent fee arrangement? Don't contingency cases promote frivolous litigation? Isn't this just a form of ambulance chasing?

To those who look down on the contingency fee lawyer I ask, "are you willing to risk your time and effort for your client?" (If your answer is "yes, but only at $500/hour," I consider that a "no.") The fact is contingency fee arrangements have a proud and honorable place in legal practice. Often, they are the only way individuals and smaller companies can actually gain access to the courts and legal system their taxes support.

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Contingent Fee Patent Litigation

The core mission of the Mann Law Group is to provide high quality patent trial lawyer services on a contingent fee basis. The lack of adequate funds should never deter you from pursuing otherwise meritorious patent and other intellectual property claims. The Mann Law Group offers a variety of contingent fee and alternative billing arrangements that make it possible for individuals and smaller businesses to enforce their patent and other intellectual property rights in a cost effective and practical manner.

If the high cost of traditional hourly billing has kept you from pursuing your claim, do not hesitate to contact us. We will be happy to review your case and discuss ways for bringing it to a successful conclusion in a way you can afford.