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.
Contingent fee patent litigation is, of course, no different from other forms of contingent litigation in this regard. For contingent fee patent litigators, there are some things that are unique to patent law and should be kept in mind. This requires development of what I call the contingent case mindset.
In its fundamental form, the contingent case mindset can be expressed very simply: everything you do and every action you take should be directed to the goal of advancing the case. Everything should be done with one question foremost: will this action help me win at trial? Strange as it might seem, lawyers often forget this when caught up in the heat of battle. (The cynical side of me also says that the need for large-firm associates to “make their hours” might have a bit to do with the ancillary side-shows that too often clutter up patent litigation.)
So, what does the contingent case mindset mean in practice? It means analyzing cases thoroughly and properly at the front end. As a plaintiff, your case depends on two fundamental showings – infringement and damages. Can you read the patent claims on the accused product? Good! Can you show damages? That’s even better. (If you can’t, now would be a great time to rethink pursuing the case.)
Think ahead to the trial. How will you show infringement to the jury? Can your inventor do it? Will you need and can you find an expert to explain it? Do you already know enough about the product to show infringement or will you need additional discovery? (This is a question that often comes up in software or chemical cases.) Think through these questions in the earliest stages of evaluating a case.
As to damages, what is your basic theory? Reasonable royalty? Lost profits? What are the defendant’s sales? How difficult will it be to establish them? Will you need, and do you have, a good expert to help? Are there existing licenses or agreements to show an established royalty? Again, think about this at the front end. Again, picture the trial while evaluating the case.
While the plaintiff’s case is (or should be) simple and straightforward at its core, don’t expect the defendant to just sit there and let you have your way. Expect to hear that the patent isn’t infringed. Expect to hear that it is invalid and unenforeceable. Expect to hear the invention isn’t worth much of anything anyway. What you need to be concerned with is whether there is any merit to these defenses. Again, evaluation at the front end is necessary. How close is the prior art? When were the first disclosures or sales? Was there any monkey-business during prosecution? If so, give serious thought to how you are going to overcome these defenses. If the problems are sufficiently serious, rethink filing the case.
Once you decide to file, leave the philosophical, procedural and other esoteric debates to the law review crowd. Pick your venue with these thoughts in mind: Where are you likely to get a favorable jury? Where can you keep your expenses reasonable? Where can you establish jurisdiction and preserve venue? I am amazed at the amount of litigation effort and money that is wasted fighting over venue. It sounds simplistic, but don’t file your case where you can’t get jurisdiction. Pick a venue where the defendant actually does business.
Avoid nonsensical discovery disputes. As plaintiff, you will need to provide documents concerning the invention, the patent and other relevant matters. The inventor will most likely need to be deposed. Fighting this only wastes time and money and runs the risk of upsetting your judge as well. If there are sufficient skeletons in the closet that you actually need to shield documents and witnesses, is this the right case to place before a jury? Is this the right case to bring on a contingency? Get your documents in order and, when asked, turn them over without a fight. By the same token, know what is off limits. Know what is relevant to certain defenses and what isn’t. Fight to keep doors closed where proper to avoid time consuming side shows. For example, inventor testimony regarding claim construction is generally irrelevant. When you are right and it matters, don’t be afraid to stand up.
Recognize that while it helps to be forthcoming with discovery, the defendant most likely thinks otherwise. Expect to receive discovery resistance from your opponent. Know, however, what is worth fighting over and what isn’t.
Again, remember your case and envision the trial. You need to show infringement and damages. Don’t let the defendant withhold information in these key areas. Don’t be afraid to go the judge, when necessary, to get it. Find the basis and evidence for whatever defenses the defendant is raising. But don’t get suckered into fighting over what is not important. I’ve seen (and been involved in) too many fights over information that doesn’t really matter. Again, picture the trial. What do you need to prevail? That’s what to put your effort into getting.
Recognize that surviving summary judgment is your single biggest hurdle. More than likely, the defendant’s strategy involves winning on summary judgment. Television notwithstanding, few civil cases actually go to trial. That’s great news for plaintiffs – provided they are ready, able and eager to go to trial themselves. Do what’s needed to avoid losing on summary judgment. (Again, if you can’t do that, give serious thought to whether you should even file the case.) Beyond that, focus on preparing your case for trial. If you get a good settlement offer, you can always accept it. If you don’t, the privilege of presenting your case to a jury is an opportunity to be welcomed.
There is obviously much more to preparing an IP case for trial than can be presented here. The contingent case mindset – the idea that every action should be directly related to the goal of actually advancing the case – is a good thing for contingent fee patent litigators to develop as soon as possible. I also think it wouldn’t hurt those billing by the hour either.