Skilled in the Art: How an Economic Bust Could Lead to an IP Litigation Boom + Cisco Wins $1.9M in Flat Fees
Pillsbury Winthrop Shaw Pittman partners offer some provocative takes on the state of IP law mid-pandemic.
May 22, 2020 at 04:48 PM
7 minute read
Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. Here's what's crossing my desk this week:
• Pillsbury partners offer some provocative takes on the state of IP law mid-pandemic.
• Northern District's postponement order puts the kibosh on Judge Freeman's plans for a socially distanced patent trial.
• Cisco salvages $1.9 million in exceptional case attorneys fees—no lodestar calculation necessary.
• The Federal Circuit Bar Association has its first female executive director.
As always, you can email me your feedback and follow me on Twitter.

How Economic Bust Could Lead to IP Lit Boom
It's been webinar week at Skilled in the Art. A lot of IP-related ideas have been flying around the interwebs. But a few especially jumped out at me from Pillsbury Winthrop Shaw Pittman's update Thursday on the state of the IP landscape. Here are some of takeaways from from litigator Chris Kao and prosecutor Josh Tucker. (Partner David Tsai moderated the discussion.)
➤ Patent litigation isn't slowing down yet, and could soon be booming. The pair noted that patent filings are actually up slightly year-to-date, possibly signaling the reversal of a years-long slide. And the ingredients are in place for a big bump. "Insolvency is like a catalyst for non-practicing entities," Tucker said. "You're going to see a lot of patent assets unloaded by your competitors. And those are going to get picked up by non-practicing entities, and there's gonna be a wave of NPE suits in the future."
➤ Likewise, we may be inhabiting a giant petri dish of trade secret litigation. "With everybody working from home, there is a lot more potential for cybersecurity issues," Kao said. Plus, companies are being forced to lay off employees. Some may possess confidential technical or business information. "There is an opportunity for those employees to take information to try to benefit themselves and another company." It's more critical than ever to ensure the recovery of intellectual property as part of termination procedures, Kao said.
➤ Patent prosecution tends to be cyclical, but not so far in this downturn. "I thought I was going to get a break and I'm not," Tucker joked. His theory is that innovators are finding more time to spin out their ideas. "Often, one of the biggest barriers to getting a patent is getting your inventors to sit down and write something out," he said. Tucker advises companies that in a stormy economy, "even an informal provisional [application] is dramatically better than not filing at all."
➤ Video-conferenced hearings may be here to stay. Kao said judges are quickly getting accustomed to telephonic and video-conferenced hearings. He expects those to stick in some courtrooms post-pandemic, especially for routine status conferences and case management conferences. "Having people be able to do those remotely rather than needing to fly around the country, I think will become a new normal and will be helpful for all of us," he said.
➤ The uptick in motions decided on the papers might have staying power, too. That's good news for strong brief writers. "But the downside I think to our profession of this new normal is it really takes away opportunities for junior attorneys to get court experience in arguing motions," Kao said. "Particularly with discovery motions that we would normally have more junior attorneys argue, if those all get decided on the papers, I think that's a negative impact for the legal profession."
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Finjan-Cisco IP Trial Put on Hold
I spent a lot of the week talking with litigators and listening in on hearings in an effort to compare and contrast the ways judges are handling patent trials as the country (hopefully) recovers from the COVID-19 pandemic.
But with anything COVID-related, the sands are always shifting. By the time my article published, the Northern District of California had issued an order postponing all civil trials until at least October.
That put the kibosh on Finjan v. Cisco Systems, which had been scheduled to kick off June 22 in San Jose. U.S. District Judge Beth Labson Freeman had planned to preside in the large ceremonial courtroom, with jurors taking their breaks and deliberating in an empty courtroom, all with the goal of conducting the trial while maintaining physical distance.
Finjan's chief IP officer, Julie Mar-Spinola, said the company understands and appreciates the Northern District's management of its high-volume docket. "We were eager and ready to proceed on June 22, but the Pandemic has taught us to be patient, and we are," she said. "We hope to have a new trial date soon. In the meantime, Finjan will use its time and resources wisely as we await our day in court."

Cisco Recovers $1.9 Million in Flat Fees
Cisco Systems got good news on another front. U.S. District Judge William Alsup signed off on a special master's recommendation that the company be awarded $1.9 million in "exceptional case" attorneys fees in its patent litigation with Straight Path IP Group. Co-defendant Apple will collect $2.3 million.
The $1.9 million was less than the $5.3 million in fees and costs Cisco had originally sought. But it was far more than the zero Straight Path had aimed for on the ground that Cisco's flat-fee arrangements with Desmarais and Baker Botts left insufficient billing records to support a lodestar calculation.
Alsup agreed with Cisco that neither Section 285 nor Supreme Court precedent require a lodestar calculation. "The lodestar's place as the preferred method does not make it the only method," Alsup wrote. "Even the Supreme Court acknowledges this."
It didn't sound as if Alsup especially enjoyed making the ruling. Quoting Justice William Brennan, he called protracted fee litigation "one of the least socially productive types of litigation imaginable."
Desmarais partner Justin Wilcox, who argued the motion for Cisco, said he's very pleased with the outcome. "The ruling clearly confirms that firms using flat-fee billing in patent cases can secure attorneys' fees, just the same as firms that rely on the billable-hour model," he said. "It's an important decision for all firms, not just Desmarais, that use flat-fee billing."
Hogan Lovells partner Clay James argued for Apple. Straight Path was represented by Russ, August & Kabat partner Brian Ledahl.
New Leadership at the Federal Circuit Bar
The Federal Circuit Bar Association has a new executive director. Jim Brookshire is retiring after 17 years at the helm. Succeeding him is Deborah Miron, the former chief administrative judge and director of regional operations for the Merit Systems Protection Board. Miron has also served as deputy assistant general counsel for the Navy and is a past president of the bar association. She will be its first female executive director.
Miron said in a written statement that the FCBA is uniquely positioned to highlight the Federal Circuit's place at the intersection of invention and innovation, and domestic and international commerce. "As the significance and impact of the Federal Circuit's jurisprudence to our society has grown, so too has the importance of the Court and its bar," she said.
Brookshire said Miron will bring visionary leadership to the bar. "It is especially satisfying to welcome her to the role of Executive Director, as the Circuit community moves boldly into the days ahead," he said.
That's all from Skilled in the Art this week. I'll see you all again next Friday.
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