Douglas Muehlhauser of Knobbe Martens scored a comeback win at the U.S. Court of Appeals for the Federal Circuit for One-E-Way Inc. In a case involving some of the giants of wireless audio including Sony, Jabra and Jawbone, Muehlhauser’s client initially lost on summary judgment before an administrative law judge at the U.S. International Trade Commission. Muehlhauser recently told The Recorder about the precedential ruling he scored for One-E-Way on the law of indefiniteness at the Federal Circuit.
For those unfamiliar with One-E-Way Inc., can you give us a brief sketch of what the company does and what they were facing as a result of the ITC investigation? One-E-Way is a small, minority-owned engineering company that has for years been dedicated to research and development of wireless, high-resolution audio products, such as headphones and headsets. One-E-Way was founded by Earl Woolfork, an electrical engineer with a degree from the University of Southern California, who sought patent protection for his innovative wireless transmission protocol back in 2001, and was granted his first patent in 2008.
Today, One-E-Way is owned by Earl along with his brother and sister. The company now sells its Wayvz line of wireless audio products, and works tirelessly to improve its designs, to build brand recognition and to grow its market.
Going back several years, One-E-Way has been facing tremendous competition from products being imported into the United States, and One-E-Way believes these products embody its patented inventions. To address the infringing importation, One-E-Way initiated an investigation before the International Trade Commission to establish the infringing nature of the imported products, and to seek an exclusion order to block imports.
You scored something of a come-from-behind win at the U.S. Court of Appeals for the Federal Circuit for One-E-Way Inc. in a case involving some of the giants of wireless audio—Sony, Jabra and Jawbone. What were you up against and how were you able to meet the challenge? There is no question that these parties are able to devote substantial resources to contest infringement actions. As expected, they retained counsel from top firms who joined forces to identify dozens of defensive theories. They then split up the legal work to advance the theories forward, for example, having at least five different attorneys argue positions against One-E-Way in a single day.
One of their defensive theories seemed to strike a chord with the administrative law judge, and they persuaded him to declare One-E-Way’s patents invalid for being indefinite.
That decision was dispositive of the entire case. With the law of indefiniteness recently changed by the U.S. Supreme Court, there were a limited number of decisions providing guidance for the courts.
We had a strong belief that the decision was not correct, and we sought review of the decision before the International Trade Commission. The commission granted review as we sought, but nevertheless, five months later, the commission affirmed the judge’s decision as correct.
We were then faced with a lengthy appeal process to seek further review of the indefiniteness decision before the U.S. Court of Appeals for the Federal Circuit. We stayed focused on our position, prepared appeal briefs, and appeared before Judges [Sharon] Prost, [Kara] Stoll and [Evan] Wallach and argued the case for One-E-Way. Four months later, the Federal Circuit issued a precedential reversal in favor of One-E-Way.
How, if at all, does your approach change when you’re representing the little guy going up against a larger competitor—or in this case competitors—in litigation? When facing large corporate opponents, it is important to stay laser-focused on only the issues material to my smaller client’s claims, and to know where to draw lines to avoid dedicating resources unnecessarily to tangential, non-critical issues. I also work to understand how the facts can best tell a compelling story to the fact-finder, and I find that smaller clients can have very compelling stories. As a case progresses, I push for only the necessary facts, and avoid getting bogged down in distracting, disrupting and costly arguments (and motion practice) with my opponents.
It is also important to keep dates—particular the trial date—from slipping. The longer the case runs, the more expensive it can get. Keeping the trial date also requires reasonable cooperation with my opponent to make sure my opponent has no reasonable argument to seek delay.
Managing my litigation team at Knobbe Martens also plays a key role in resource conservation. I place deserved trust in junior team members, and give them significant responsibility in handling a wide variety of issues, such as taking depositions as well as researching, briefing and arguing various motions.
And finally, I never risk my smaller client’s credibility with the court. The arguments that I bring forward in briefing and argument are always reasonable and very well-researched and well-supported with facts and evidence. I find that nearly all judges have a highly developed sense of fairness and a keen ability to detect hasty, flawed or poorly supported positions. Maintaining a client’s credibility is essential and cannot be sacrificed to cut corners on resources. Rather, the best approach is to take great care in prioritizing the matters brought to the court’s attention.
A prospective client with a crisis calls and asks why you and your team at Knobbe Martens should be retained. What is your answer? We are going to listen very closely to fully understand the prospective client’s position and exactly what the client needs to resolve the crisis. We will be very creative in crafting a case strategy to achieve the client’s goals and that fits a discussed budget. We will assemble the right team based on technologies at issue, and experience with pertinent claims and forums. We will communicate regularly, clearly and frequently throughout the process, and we will never stop thinking about the case, including both running it efficiently as well as resolving it.
Who is a litigator outside your own firm that you admire and why? I harken back to John S. Rhoades, who made his mark as a litigator and later as a district court judge. He always treated everyone fairly, but could be very persuasive when needed. He taught me that preparation is always critical, and that handling matters with a high degree of candor and integrity is indispensable.