What every in-house lawyer needs to know about IP litigation

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By Meredith Ainbinder
Dolan Media Newswires

Intellectual property is one of the most complicated areas of law. Love it or hate it, at some point or another every in-house lawyer is going to be faced with some type of IP dispute.

It may be necessary to fend off an attack on a company’s business practices and defend against accusations of trademark, patent or copyright infringement, false advertising or trade secret misappropriation.

Perhaps you need to stop a competitor’s infringing conduct by bringing your own lawsuit. Maybe a license arrangement has gone awry and a broken relationship needs mending.

Being aware of a few simple ideas will help get you through it without letting it take over your law department — and your life.

Strategy is more than a buzzword. Many lawyers and business people use words like “strategy,” “tactic” and “execution” without really understanding how they come into play in a complex lawsuit.

Here, actions speak louder than words. Identify your objectives, make plans to reach them and commit to retaining the flexibility to adapt as goals change.

When formulating a strategy, consider how the case fits into your business, whether a product at the center of a lawsuit has a lifecycle that justifies the fight and how your litigation positions you in your industry.

Weigh options such as early settlement, alternative dispute resolution or seeking preliminary injunctive relief.

Keep outside counsel updated on business plans and check in with them as priorities shift internally. Hearing information from you rather than on the business page of your trade paper helps your lawyers give you better advice.

Be aware of your budget. Consider IP litigation costs at different stages. Recognize true case costs: the number of experts, extensive third-party discovery, international travel for site inspections, local counsel fees, potentially contentious discovery motion practice, claim construction, summary judgment, etc.

Find out if alternative fee arrangements are sensible for the size and type of your case. Perhaps a fixed fee would work for one phase of the case. Or maybe you can negotiate a plan for capping costs for particular motion practice.

In addition to alternative fee arrangements, there are often ways to control costs by limiting your claims. Alternatively, grouping or consolidating a variety of issues will save you time and money in the long run.

Companies and lawyers should work together to evaluate the contents of a patent’s prosecution history and any binding effects from the process of obtaining the patent, what a company has to lose if a patent is invalidated, and the cost of unchecked infringement. That may include sales lost to the infringer and other infringers who will enter the market if you don’t pursue your rights.

Not every wrong will be remedied. No in-house counsel likes to hear that the company’s patent or trademark is being used by a competitor and there is nothing that can be done about it.

After all, developing an IP portfolio is no easy task. It takes time, diligence, and coordination of the legal department with other groups such as R&D, marketing and sales. In addition, there are significant legal fees and costs associated with applications, renewals and policing.

Yet there are some circumstances in which it is difficult or impossible to right a wrong. For example, there may be no likelihood of confusion arising from another party’s use of a federal registered trademark and, thus, no relief. That may be the case when the other user is geographically remote, using the mark for different goods or services, or sells in distinct channels of commerce.

Also, IP protection has geographic limitations and there are legal repercussions for attempts to capitalize on nonexistent rights.

It is important to have realistic discussions of your expectations and your goals with your lawyers, not only before you file a lawsuit, but as you go through the process of developing a strategy and a budget for obtaining IP protections for different parts of your product lines in various markets throughout the world.

IP is emotional. A common mistake is to think that an IP dispute just involves nuts and bolts, computer code or slide rules.

Intellectual property is about innovation. Inventors, authors and creators of any improvement feel passionately about their contributions to areas such as medicine, visual and performing arts, and computer networking.

Behind every utterance of “I’ll see you in court,” is a feeling of violation arising from the idea that one’s creations are being infringed.

Moreover, defendants take exception when wrongly accused of stealing another party’s secrets when they believe they developed something on their own.

Learning to manage those feelings and arrive at results that validate them without making a poor business decision will serve you in good stead. You should be able to rely on outside counsel to provide a reality check and help you navigate outcomes that balance the economic and emotional sides of these disputes.

Meredith Ainbinder is a partner in the litigation practice of Sunstein, Kann, Murphy & Timbers in Boston.