David Miclean heads up the Silicon Valley law offices of Fish & Richardson P.C., one of the busiest offices of one of the largest intellectual property law firms in the U.S.

Miclean’s areas of expertise are diverse and include trade secrets litigation, trademark & copyright litigation, and patent litigation, among others.

Following on my conversation last year with Steve Beyer regarding Patent Prosecution - [see archive section for Patent Law 101] - it was very interesting to have a chance to discuss the Patent Litigation side of the Patent Law equation with David Miclean.

The following is a summary of our conversation that took place on May 25th.

Miclean: "The way I look at those distinctions may differ somewhat from others. On the prosecution side, you’re working with a company to protect the inventions of that company by creating the intellectual property asset - a patent. The protection of intellectual property through the patent process is intended to prevent others from using your IP without paying fees. Hopefully, the patent prosecutors were capable in writing the patent claims, which define the invention."

"Primarily, the role of the prosecutor is to help a company protect its IP by creating the protection tool - the patent. The patent litigator can then use that tool to stop others from infringing the patent, or as leverage to obtain royalties for its use. Analogizing a patent to a tool - something like a hammer - the prosecutor puts the hammer together and the litigator uses it."

"The patent litigation side of the equation is ultimately the place where patent validity is tested. The Patent & Trademark Office [the PTO] does a good job, but they don’t always have the ability to access and evaluate all the ‘prior art’ in the area of technology to test a patent’s validity. It’s through litigation where a patent’s validity can really be tested. Ultimately, a patent claim is tested in court. Using the hammer analogy, you can tell a lot about a hammer by looking at it. For example, is it warped or otherwise compromised? But there might be hidden cracks in the wood - you can't be sure it works until you use it."

Miclean: "Yes and no - sorry, I know that sounds like a lawyer. Certain patents are considered strong because they protect truly novel areas of technology; the test of strength though, is in the courts. That’s where you’re going to get ultimate determination as to whether a patent is valid or not. The issuance of a patent by the PTO gives the patentee a presumption of validity, but a presumption of validity is not necessarily adequate until you’ve explored the prior art [related to the technology]."

"A patent infringement litigation will help define what the patent’s claim of invention means - that’s the crux of the thing, what do the claims cover. So the patent process starts at the PTO, but the true test of what a patent covers and whether it’s valid takes place in a legal forum. And the question of what the patent claims mean is a decision for the judge."

Miclean: "Federal judges usually go to some type of judges school where they learn about patent law and procedures. Most federal judges are not schooled in technology in the sense they have advanced scientific and engineering degrees, but most I have encountered are smart folks who strive to learn the technology in the case before them."

"Certainly, the judges here in Silicon Valley have seen a lot of these cases and are more tech-savvy by their exposure. There are other jurisdictions in the United States, where there are also many patent infringement cases. I imagine there are other judges who have no desire to be involved in the complexity of a patent case and bristle at technology related litigation."

"In a lot of cases, the judge will entertain having a technical tutorial on the subject matter at or near the time of the patent claim construction hearing (the Markman hearing) when they have to decide what the patent claims mean. These tutorials can be presented by a lawyer in the case or a technical expert. Sometimes, the judge may try to get his or her own technical expert to teach them a class on the technology."

[Editor’s Note: The Markman ruling was handed down by the Federal courts in 1996 in the Markman et al versus Westview Instruments case, and established a precedent for a judge - as opposed to a jury - delineating the limitations on the scope and definition of a patent claim.]

"Typically, if a judge wants her own tutorial, she will try to get agreement from the parties regarding the expert who will teach the class. Sometimes however, the judge will declare a certain day to be a tutorial day and will allow each side an opportunity to explain the technology at issue in the case. All sorts of teaching aids can be used in these tutorials - including PowerPoint presentations, graphics, models, and videos with animation. Tutorials can be quite expensive, depending on the complexity of the technology and the difficulty involved in explaining it."

"As I said, most judges are not electrical engineers, biophysicists or Ph.D.’s in computer science. It’s important in patent lawsuits to be able to explain the technology to non-technical people in terms they can understand. The largely non-technical people deciding/influencing the principal issues in patent litigation include the judge, the jury, and the judge’s law clerks - they need to understand what they are making decisions about."

Miclean: "There are discussions going on right now whether to replace juries or judges with professional jurists or judges who come with a certain level of technical expertise to decide issues of patent validity and other issues. Arguments for and against that process have been presented, but so far we are still working within the jury system without ‘professional patent’ judges."

Miclean: "There are several different forms of relief in a patent infringement case. You may be able to establish your lost profits or a reasonable royalty on the monetary side, or in terms of equity you can seek an injunction to stop the infringement."

Miclean: "I believe both of those industries are extremely competitive, involve technologies that are very innovative, and perhaps, include products that have a very distinct shelf life. Small companies with a single or very few products often have to fight to survive and their main assets are their patents and IP."

Miclean: "I think that’s not really accurate today. We work with a lot of start-ups developing technology that’s very cutting edge. The myth of the Ph.D. and the lawyer might have had some truth in the mid 1990’s, but today the start-up world has changed significantly since the NASDAQ collapse."

"I see a lot more discernment and due diligence at the outset for start-ups. And those things are certainly needed before any one in venture capital is going to invest in the company. Those halcyon days of the lawyer and the Ph.D. are over in my judgment. There’s too much scrutiny being paid as to whether or not the technology is sound and the company has something that will make money."

Miclean: "When you can’t resolve a patent dispute on economic terms with the other side, and you can’t afford to let them continue infringing your patent. If you can get the infringing party to stop manufacturing and selling their device at the outset of litigation you have a huge advantage as a patentee."

"For instance, through the ITC [International Trade Commission], you can get an exclusion order precluding importation into the US of an infringing device, or a preliminary injunction in a litigation in the courts. One of the options I suggest to clients is to get that preliminary injunction at the outset, although it may be difficult to obtain."

"But if you can get an injunction, that certainly can affect the outcome of the eventual litigation process. The infringer, if stopped with a preliminary injunction before trial, can often be forced into an earlier resolution because you’ve regained the business leverage over the situation and may re-establish lost market share. You can also get a permanent injunction after trial, if you’ve proven infringement."

"The courts can essentially say to your competitor, you must stop manufacturing this device immediately. A jury may even award a reasonable royalty or lost profits for infringement which could amount to a very large award of money to a business."

Miclean: "Clients need to know that going forward with litigating a patent can be a very time consuming and expensive venture - one that will impact the time and energies of top management and other employees throughout the company. That’s the principal downside of pursuing an infringement action."

"The upside is, if you’re trying to enter a market or protect an existing market, and if others are using your patent-protected IP to drive down the market and reduce your market share, then you have to do something to protect your product from unfair competition. If your company is facing an infringer who’s driving margins so low they’re making licensing of the technology an impossibility, sometimes your company may have no choice."

"Frequently, by way of a patent litigation, the client is able to obtain a licensing agreement that will create a revenue stream, recover lost profits or royalties and/or stop illegal competition [and restore the company’s position in the market]. If you can develop a licensing stream for your portfolio or your patented technology via that strategy, that could be the optimal arrangement and a large asset of your company."

"It strengthens a patent when there are a lot of people out there licensing it. However, a company - particularly a technology company - sometimes faces a matter of life or death for that business and must pursue litigation to remain a viable company or to protect its valuable IP assets."

Miclean: "Most cases, including patent cases, settle before trial. Patent cases are expensive because they have their own rules and procedures and require specialized knowledge to litigate them well. If you’re taking a case from complaint all the way through to trial, a case may cost several million dollars. Of course, it depends on the number of patents involved as well - does the case involve just one patent, or multiple patents."

"These days, a vast majority of patent cases get settled before trial, often after the Markman ruling by the judge. The Markman ruling is the judge’s decision on what the claims of the patent mean. Both sides in the case then know how the claims will be defined, which oftentimes provides the parties an opportunity to find a resolution to the case."

Miclean: "We typically talk with clients, and potential clients, who have previously tried to work out agreements with competitors over their patents. We try to evaluate their overall situation before proceeding with a litigation. We often try to work with a company to seek a business solution to achieve their goals. If the company can suggest a resolution that works for the other party, it’s a win-win arrangement for both - particularly if you go for a licensing or cross-licensing agreement."

"We always encourage clients to explore resolving a business conflict outside of court - a lawsuit should generally be your last alternative. Sometimes there is no other reasonable course, or there is a practical strategic reason why a lawsuit makes more sense"

"Of course, I’m not talking here about dealing with an outright counterfeiter, in which case you might be able to initiate a criminal investigation and enforcement in addition to a lawsuit. I’m talking about those businesses that have a lot of inter-linked customers with their competitors, and therefore multiple overlapping relationships."

"In Silicon Valley, people move around a lot. We know it’s a big valley, but it’s actually a small place in terms of people interacting with each other. If you can resolve things without litigation, it makes for better business relations and opportunities for continued business relationships. If a business resolution is not possible, then go forward with the litigation."

Miclean: "I do see it as my role to help people resolve a problem. Oftentimes bitterness or enmity gets in the way of good business decisions. I try very hard to resolve problems in a smart way for the company - and that usually requires a cool head. So I try to calm, not ignite the situation. The first thing I need to do is to have them identify what their problem is, and what their goals are related to a resolution. That helps me fashion a recommendation for them, or to lay out various scenarios about how the dispute or resolution might play itself out."

"Perhaps I try to get the heads of the two companies to sit down together, with or without their lawyers. We might be able to see an early resolution to the conflict in some cases. But, if you’ve got a group of people who are bitter from the very beginning of the process, it’s going to be very difficult to have resolution at the front end."

"Sometimes, in fact, there has to be a certain amount of ‘bloodletting’ before either side is ready to explore alternative solutions to resolve a dispute. Bitterness and acrimony often lead to a prolonged process, and a period during which good business resolutions often get ignored."

"I tell clients that anger is a reality, and that we may need time for anger to subside. I often suggest that they take time, sit back, and wait for the anger to cool. We all need a clear presence of mind to move forward to a positive resolution to the problems that crop up in patent disputes. You don’t have to like the other side to get a deal done, but you - or at least your lawyers - normally have to be civil."