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As corporate clients continue shifting legal work in-house, lawyers like intellectual property attorney David Sunshine at Philadelphia-based Cozen O’Connor are emphasizing unusual niches. Sunshine, a New York partner, said that about a quarter of his practice involves tracking intellectual property cases for hedge fund clients. That ranges from day-to-day monitoring to following discovery disputes. Sunshine assesses the likely outcome of litigation that can affect companies’ stock prices. “I follow all the filings and I try to opine on how I think certain things are going to come out,” Sunshine said. “I’ve done this long enough to get a sense as to whether I think there’s going to be some meaningful settlement discussions and who has a better chance of winning.” Right now, Sunshine is following four patent infringement cases and one antitrust case, Coalition for ICANN Transparency Inc. v. VeriSign Inc. in the Northern District of California. The case tests the company’s exclusive rights to assign the dot-com and dot-net top level domains. The patent cases include Apple Inc. v. High Tech Computer Corp. in the District of Delaware. He’s tracking two Nokia Corp. v. Apple Inc. cases, one in Delaware and another in the Western District of Wisconsin. A key piece of the analysis is learning about the judges and parties involved, not just about the merits of the case, Sunshine said. For example, while following the epic Nokia Corp. v. Qualcomm Inc., Sunshine figured out that the parties were in settlement talks. He was in the courtroom for the trial opening, but the normally punctual judge wasn’t, Sunshine recalled. “I was able to e-mail the client from the courtroom and was able to tell them I thought something funny was going on,” Sunshine said. “I gave them some advice that there was a good chance the parties were talking settlement. They bought up more Qualcomm stock and the stock went up some insane amount of money.” In the ultimate settlement, Finnish cell phone maker Nokia agreed to pay ongoing royalties and a lump sum to San Diego-based Qualcomm. Nokia, in turn, gave Qualcomm a 15-year licensing agreement for Qualcomm’s cellular patents. “There’s a proliferation of technology-related cases that I think lend themselves in real movement in stock prices,” Sunshine said. Sunshine’s niche is unusual, according to a random survey of about a dozen law firms with intellectual property groups, but at least a few others dabble in similar work. Steven Moore, an intellectual property litigation partner in the Stamford, Conn., office of New York’s Kelley Drye & Warren, said he’s performed a similar function for investment firms. “What may be novel is that he is doing it on multiple cases all at once, being paid for the monitoring on an ongoing basis,” Moore said. K&L Gates’ political and legal intelligence practice tracks some litigation for hedge fund clients, said Washington, D.C., partner Pamela Garvie. Although most of the group’s hedge fund work involves tracking legislative and regulatory issues, funds are seeking multiple sources of information to inform investment decisions, Garvie said. “We have a treasure trove of experience and knowledge that can benefit financial services clients who are interested in litigation and other disputes,” Garvie said. “This is a way for us to help round out our practice.” Kent Zimmermann, a Chicago-based consultant with the Zeughauser Group legal consulting shop, hadn’t seen this exact model before, but he thinks it’s powerful. “There is no question that more accurate knowledge about what is actually at stake in IP litigation and each side’s chances of prevailing, and why, would very likely be a valuable asset for hedge funds seeking to invest in this area,” Zimmermann said. Lawyers giving advice to hedge funds about intellectual property cases are in a “small strategic minority” in the sense that their relationship with clients means they’re trusted “well beyond the scope of legal expertise,” said Michael Rynowecer, president of Wellesley, Mass., legal consulting shop BTI Consulting Group. “It’s definitely outside the mainstream,” Rynowecer said. “If they’re providing that kind of counsel, that’s where the other work is going to flow from. It’s a great thing when you can add value and do something out of the box for your clients.” For Sunshine, at least, advising hedge funds is refreshing. “In everyday practice, I have to back everything up with 50 different disclaimers,” Sunshine said. “These guys just get that you’re making a call and you’re not going to be right 100 percent of the time.”

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