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Every October, the townsfolk of Marshall, Texas, gather for a festival honoring a pesky and ubiquitous local nuisance — the fire ant. But another wave of critters with a potentially irritating bite has been invading this East Texas town of 25,000: patent lawyers. Marshall is one of the hottest venues in the country for patent litigation. And though residents may not be holding a festival in their honor, patent lawyers are finding the city — or more accurately, the federal courthouse there — a fast and efficient venue for high-stakes litigation. In the past decade, a series of big cases involving corporate giants from Cisco Systems Inc. to Intel Corp. have landed in the city, which serves as the focal point for the U.S. District Court for the Eastern District of Texas. “It’s a lawyer’s dream,” said K.T. “Sunny” Cherian, a San Francisco partner at Washington, D.C.-based Howrey Simon Arnold & White who has tried several cases in Marshall. The town has a “fair, fast court, a knowledgeable court. The kind of things that are a luxury.” A few ingredients are making Marshall a tasty location for the patent bar: U.S. District Judge T. John Ward, who appears to have an affinity for patent cases; Ward’s set of patent rules, which helps get cases to trial quickly; and a jury pool that tends to favor plaintiffs. Patent lawyers say they believe the district has the third-largest docket of patent cases in the country, behind that of the Eastern District of Virginia and the Northern District of California. While Marshall has dealt with patent suits for more than a decade, its workload has mushroomed in the past three or four years. So how did a rural community better known as the former home of Lady Bird Johnson become a magnet for patent litigation? The answer lies with a Lone Star State corporate icon. Texas Instruments Inc. started the trend in the late 1980s and early 1990s when it began filing infringement suits in Marshall and other courts in the district against competitors. The venue gave Texas Instruments a home-court advantage. And the region has a reputation for plaintiff-friendly juries, who some lawyers believe enjoy the business that the litigation brings to the region. The court started churning out patent cases even faster after Ward, the town’s resident federal judge, put together a set of rules specifically for patent disputes. “There are three reasons plaintiffs lawyers like to file in Marshall,” said Otis Carroll, of Tyler, Texas-based Ireland, Carroll & Kelley. “They are familiar and comfortable with the patent rules, Judge Ward does not tolerate jacking around with discovery — he’s stern that everyone cough up what needs to be coughed up — and he holds everyone to a prompt trial date.” Carroll, who works as co-counsel with out-of-town firms, including Orrick, Herrington & Sutcliffe and Townsend and Townsend and Crew, said the juries also give plaintiffs an edge. Marshall is “a populist area, an old railroad town with good Democratic voters,” he said. “Juries aren’t afraid to write down big numbers.” LOCAL HELP Every month, big city patent attorneys trek to Marshall’s single federal courtroom to do battle. In January, lawyers from about a dozen firms were in town defending the world’s television manufacturers. And three weeks ago Cisco Systems’ lawyers from Orrick argued for a temporary injunction against Chinese manufacturer Huawei Technologies Co. Ltd. Of course, to work in Marshall, it helps to know the lay of the land. The city — 148 miles east of Dallas near the Louisiana border — spawned PBS mainstay Bill Moyers and boxer-turned-grill pitchman George Foreman. It was one of the last capitals of the Confederacy, and of course there’s the fire ant festival. “It’s a cross between ‘Hee Haw’ and ‘Twin Peaks’ out here sometimes,” said Michael Smith, a partner at Marshall’s Roth Law Firm. For firms like Roth, the flood of litigation has brightened the bottom line. The four-lawyer firm boasts an all-star lineup of clients. The firm serves as Jones Day’s co-counsel on hometown cases. And when Jones Day is in town, it rents space at Roth’s firm and hangs out a shingle, “Jones Day — Marshall Branch.” Carroll, of Ireland Carroll, got his first patent case three years ago when he was hired by Townsend to serve as co-counsel in a dispute between two European companies over weaving machine technology. He then worked with Townsend lawyers on a massive patent fight between Intergraph Corp. and Intel Corp. And he, along with local attorney Franklin Jones Jr., is currently working with Heller Ehrman White & McAuliffe partner Robert Haslam in defending Huawei against Cisco’s infringement suit. On the opposing side, Sam Baxter, the sole partner in McKool Smith’s Marshall outpost, is co-counsel with Orrick partners Guy Hopkins and Christopher Ottenweller. The three won an initial round June 6 when Judge Ward granted their request for a preliminary injunction. Baxter, who opened McKool’s Marshall office in 1995, said half of his cases come directly to his Dallas-based firm, and the other half are cases in which he is hired as co-counsel. Founded in 1991, the 70-attorney McKool Smith focuses exclusively on commercial litigation. And it’s not just the lawyers who are benefiting. The main hotel, the Hampton Inn, gets a steady flow of business, as do restaurants and other shops. “It dumps a lot of money into the economy of the town,” Roth’s Smith said. Some lawyers speculate that the extra income could be a reason juries are so inclined to favor plaintiffs — to keep them filing cases in the district. Still, Kenneth Adamo, a partner at Jones Day who has represented Texas Instruments for many years, said he has also had good results when he’s been on the defense side. “In spite of a lot of people saying it’s a plaintiff jurisdiction, we’ve had good defense judgments,” he said. His client General Motors Corp. reached a favorable settlement with inventor Allan Konrad, who claims his patents cover accessing information over the Internet. The court ruled his patent claims were narrower than what he asserted and Konrad stipulated the claims are invalid. Franklin “Brock” Gowdy, a partner at Morgan, Lewis & Bockius who has tried several cases in Marshall, said being there is “like stepping back in time in many respects.” But he said the venue “presents more than the usual set of challenges,” particularly for out-of-state litigants. It’s the kind of place where everyone knows everyone else and outsiders stick out. “We do have a little reaction to people from up North,” Smith said. Having witnesses with a Northeast accent “is something to take into consideration when choosing experts,” he said. But Gowdy found that the close-knit community could be cracked. Several years ago he represented Petaluma, Calif.-based Advanced Fibre Communications Inc. in a suit brought by a Dallas-based company. In preparation for the trial, Gowdy and his colleagues spent eight weeks living in Marshall and going to the local church. As the trial date neared, he sent Advanced Fibre’s British chairman, its South African chief technology officer and a French witness to stay at a local bed and breakfast. While his clients were getting to know the town folk, the opposing side came into town in limousines, Gowdy said. “We became the home team,” he said. “We found if you moved into the community and got to know the people, they embraced you.” The local attorneys also play a role in breaking down barriers between jurors and out-of-towners, often taking center stage in court. WARD’S WAY Judge Ward, who handles the bulk of patent cases in Marshall, is himself a local fixture. He spent 30 years as a trial lawyer in the Eastern District before he was appointed to the bench in September 1999. He handled several patent cases, including litigation for Hyundai Corp., which was a defendant in a series of suits brought by Texas Instruments. “I was sort of a cog in the overall machinery,” Ward said. “The stand up guy in the courtroom.” The Hyundai litigation was led by Kenneth Nissly, a partner at Thelen Reid & Priest’s San Jose, Calif., office, and involved other firms, including Townsend and Townsend and Crew. Ward was the trial counsel in 1999 litigation that resulted in a $29 million jury verdict for Texas Instruments. Primarily a defense lawyer before joining the bench, Ward said, “I probably lost more cases in the courtroom than any defense lawyer you could find.” He initially sat in neighboring Tyler, where he drafted a set of patent rules modeled after those of the Northern District of California. “I took Judge Ronald Whyte’s work and used it to a large extent,” he said. “I thought it would be helpful to have a more structured environment.” A year ago, he became the resident judge for the Marshall district. A number of high-stakes cases have gone through his court, including Intergraph Corp.’s suit against Intel Corp. Last year, Ward ruled that Intel’s Itanium microprocessors infringed two Intergraph patents, and Intel agreed to pay Intergraph $150 million. Cisco won its first round with Alcatel Corp., when the court granted summary judgment and dismissed Alcatel’s infringement suit. Cisco has a pending antitrust counterclaim against the French telecommunications company. And in January, Parental Television Guide of Texas reached a settlement with 18 television manufacturers it sued for infringing its V-Chip patent and obtained a judgment against another defendant. “Marshall has always attracted interesting litigation,” Ward said. “I think because of the history of the juries.” While Marshall gets the bulk of patent cases, the other six divisions in the Eastern District of Texas — including Tyler, Texarkana and Sherman — get many as well. Judge David Folsom, based in the Texarkana division, sits part time in Marshall and handles a percentage of the court’s patent docket. Patent lawyers expect to continue spending a lot of time in Marshall. “It’s the last remaining rocket docket that I’m aware of, other than the ITC [International Trade Commission],” said George Schwab, a partner at Townsend and Townsend and Crew who has been traveling to Marshall once a month for the past two years. Until about two years ago, the Eastern District of Virginia had the reputation as the rocket docket for patent litigation. Companies routinely filed there because of the quick time to trial. But lawyers say the court became so inundated, it began transferring cases to other venues. That hasn’t happened in the Eastern District of Texas, and many lawyers believe the courts will hold onto their caseload no matter how heavy it gets. And for the local bar and many out-of-towners, that’s good news. “In the Marshall division you’ve got two really good judges who are sticklers for going fast and getting evidence produced as cheaply and quickly as possible,” McKool Smith’s Baxter said. “If you have good judges and the ability to get a quick resolution, you are in hog heaven.”

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