Patent Law

Linked In Answers to Question: Who Benefits from Inefficiencies of Patent Litigation?

By Les Weinstein, Michael Young, John Leo Wagner, Eric van Ginkel, and Victoria Pynchon

I recently posed the following question to the IP ADR Blog's readers and to my LinkedIn network:  

Which patent infringement litigation parties (if any) benefit from the inefficiencies in the process? 

As usual, my LinkedIn Network delivers.  

The really terrific, thoughtful answers to the question below. 

Thanks to each one who answered.  I'll be following this up with an article or lengthy post soon.

Unless the litigants are disproportional in size there are no winners from these inefficiencies. One can even say that the biggest losers in this process are not even a party to the case. I'm referring to the consumer or the true bearer of the inefficiencies and related cost.

The speed of innovation, the product development, and the marketing efforts will continue to evolve into quicker and more efficient cycles. At some point the legal process will be forced to adapt. A good example of this is the Federal Rules of Civil Procedure on Electronic Discovery.

Change is good, and depending on how business is conducted, it may also be a necessity.

Francis Bueb CPA, CITP of Ueltzen & Co. 

Unless a preliminary injunction is granted, the defendant in a patent infringement case will likely benefit from a longer and less efficient process. Defendants usually want the plaintiff to have to keep shelling out money to keep the litigation furnace burning.

On the other hand, sometimes a plaintiff who is granted a preliminary injunction just wants to keep the defendant out of the market as long as possible. In such a case, the parties are likely competitors and the longer the defendant's competing product is off market the better for that plaintiff. Sometimes, even a litigation loss is a win for such a plaintiff if, say, the plaintiff's product is replaced by a newer version that is accepted by the consumers before the end of the litigation over the product that is replaced. 

Ryan H. Flax, IP Attorney, Dickstein Shapiro, LLP 

The one with more money.

Ed Green, Patent Lawyer, Coats + Bennett
 

The sad truth is that only the defense attorneys benefit from inefficiencies in litigation because they are charging by the hour. As for the litigants, the Plaintiff usually wants a trial as soon as possible. So, inefficiencies and delay benefit the Defendant, i.e. the accused infringer.

Scott C. Kinsel, Partner, Moore Landrey LLP

In fact the Plaintiff would be at lose because he/she may not get justice immediately. There is a proverb, “justice delayed, justice denied” and if the process is inefficient there would be delay and in such a situation the Plaintiff may not get quick justice. Also, if the plaintiff(s) do not succeed in getting an injunction order against the defendant(s), specifically in case of IPR matters, the Plaintiff may not be able to enforce his/her monopoly IP Right granted by the concerned IPR Office.

Ram Prakash Yadav, Manager - IPR at ACME Tele Power Ltd. Gurgaon

I'd agree with Ed on this one, deeper pockets benefit from inefficiencies.

Inefficiencies result in increased expenses. The increased expenses become a point of leverage in the dispute. I have had clients avoid exercising some of their rights in litigation because exercising their rights would have delayed the trial, which would have added expenses.

Generally, the Defendant has the deeper pockets - which I would suggest is part of the reason others have suggested the Defendant benefits.

Additionally, you do not have the number of frivolous law suits in patent litigation that you have in other civil litigation because it is so expensive to litigate patent infringement. Most patent owners cannot afford to file a complaint unless they are absolutely convinced they have a winning case.

The big loser in the process is the independent inventor or small company, who do not seek patent protection for their new ideas because they do not believe (perhaps correctly) that they will ever be able to enforce their patent, so why seek it. Ultimately, any novel products they develop that have a market will be stolen without any need for litigation.

Todd Sullivan, Managing Partner, Hayes Soloway, P.C.

Apart form the lawyers, I would say that alternative dispute arbitrators (such as the asker of this question) benefit - the inefficiencies of the legal process will drive more on both sides to use these alternative solutions. 

Between the two sides, I think either could benefit, it depends on circumstance - sometimes the patent holder benefits as a potential infringer may continue infringing while awaiting a resolution, and end up paying more when the case is settled - sometimes the infringer will benefit as they can continue profiting from their work while the case is argued, whereas if it was sorted earlier they might effectively be stopped in their tracks - I can easily see a case where both the above could be true.

Finally, the customers may benefit. New products may get developed which would never get launched if their weren't the delays and uncertainties that exist in the system.

Bernard Gore, Facilitation, Project & Programme Management

I don't think there's a simple answer to this, I'm sorry.

It depends on the country - some countries allow an ex parte interim injunction to be granted with no ability for the defendant to add evidence in an appeal. (Highly efficient or inefficient, depending on your point of view.) Either way, the inability to add evidence on appeal is inefficent, if justice is your aim.

It depends on the industry - in the pharmaceutical context, say in the US - the whole litigation procedure is skewed by the Hatch-Waxman regime. So here it even depends on the context of the particular dispute. So, if the 30 month stay is rapidly approaching with no prospect of a trial, then then innovator company will benefit from inefficiencies because they will keep the generic off the market longer, or have a good shot at an injunction in the mean time (depending, again on the patent, etc).

There are others, but this gives the general gist.

Duncan Bucknell, IP Strategist, Lawyer & Patent Attorney
 

Full post as published by IP ADR Blog on August 24, 2008 (boomark / email).