Practical and Effective Cost Containment in Patent Litigation

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1 Practical and Effective Cost Containment in Patent Litigation AIPLA Annual Meeting Corporate Practice Breakfast Thursday, October 27th, 2016, 6:30-8:00AM DENISE S. KRAFT

2 Practical and Effective Cost Containment in Patent Litigation In recent years, significant attention has been given to cutting costs and streamlining patent litigation, including: Enactment of the America Invents Act in 2011 Amendments to the Federal Rules of Civil Procedure, Effective December 1, 2015 These efforts have been helpful but they only go so far in the uneasy relationship between soaring patent litigation costs and budget management There are actions you can take as part of your own litigation strategy process to successfully contain patent litigation costs We will highlight practical and effective strategies to contain costs in patent litigation, many of which are low tech solutions with high tech returns October 27,

3 Soaring Patent Litigation Fees Patent Litigation Median Fees and Costs for One Patent* U.S. District Court Case (through trial) (medium size case $10 to $25 million at risk) $5 million PTAB Proceeding (through appeal) $350,000 *AIPLA 2015 Report of the Economic Survey October 27,

4 Explosion of U.S. District Court Patent Litigation U.S. District Court Filing Trend for Past 5 years 5435 cases filed in cases filed in cases filed in cases filed in cases filed through Q3 in 2016 Top 3 Venues Texas, Delaware, California October 27,

5 US Congress Acts -- America Invents Act Congress Enacts AIA (2011) to Curb Litigation Costs Benefits of Filing IPR Petitions: Legal standard for invalidating patents is lower than in district court months to resolution (compared to 2-3 years in district court) Possible stay of district court litigation during IPR proceedings October 27,

6 Federal Rules of Civil Procedure Amended Effective December 1, 2015 Rule 26(b)(1) Former Scope of Discovery: [r]elevant information need not be admissible... if the discovery appears reasonably calculated to lead to the discovery of admissible evidence New Scope of Discovery: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claims or defense and proportional to the needs of the case.... October 27,

7 Practical and Effective Cost Containment in Patent Litigation Not an Easy Relationship October 27,

8 Alternative Billing Arrangements Alternative Billing Arrangements Flat Fee Predictable but possible quality issue due to capping Auction Bid Process Based on early case assessment that may change Success Bonus Win/win but has some of same issues as other alternative fee arrangement due to capping October 27,

9 Managing Hourly (Traditional) Billing Arrangements Managing Hourly (Traditional) Billing Arrangements 1. Effectively Set Budget Early Early due diligence required Determine case strategy Use a project management timeline format to: Identify specific phases of litigation (e.g. due diligence, initial pleadings, initial disclosures, discovery, claim construction, experts, dispositive motions, pretrial, trial) Identify specific actions to be taken within each phase Consider using budget range for each phase to gauge effect of varying degrees of litigation aggressiveness October 27,

10 Managing Hourly Billing Arrangments Managing Hourly (Traditional) Billing Arrangements 2. Effectively Leverage Business Assets IT/Tech Staff Inside/Outside experts with special industry or company knowledge Third party vendors (document collection, storage, graphics, printing) October 27,

11 Managing Hourly Billing Arrangements 3. Effectively Partner Between Inside and Outside Counsel Set regular strategy meetings (weekly/bi-weekly) Require an agenda 1-2 business days prior to any scheduled meeting Request an outline for writing projects such as briefs or appeals Personally call between regular meetings as needed October 27,

12 Thank You Thank You Denise Seastone Kraft Partner DLA Piper LLP (US) 1201 North Market Street Suite 2100 Wilmington, Delaware United States T: F: October 27,