Edward Colbert
Edward Colbert, Partner at Kenyon & Kenyon, presented "A Strategic Overview of Recent Developments in Enforcement Under Trademark Infringement, Dillution and Cybersquatting."
First, Mr. Colbert explained that counsel and clients must know what IP they own. For example, are there things in the client's advertising, such as trade dress or tag lines, that can be protected?
A second consideration when seeking IP protection for a client's goods is the packaging and product configuration. The Supreme Court has held that packaging may be inherently distinctive, while product configuration cannot be inherently distinctive. "Consequently," Colbert stated, "you need to specifically identify what it is that you're trying to protect."
Finally, counsel should consider the client's websites. Websites have led to a great deal of litigation and decisions that try to reconcile trademark law with new acts such as the ACPA and UDRP.
Mr. Colbert next addressed the available protections for infringing goods and services. Civil actions offer potential preliminary injunction and border protection if the act is an infringement. For counterfeited goods, relief under the Lanham Act may include an ex parte seizure/destruction order and treble damages. In addition, criminal actions may occur when counterfeit goods are involved. Mr. Colbert noted that, "if the identity of the counterfeiting individuals can be supplied to the government, you will be surprised at just how active the U.S. Attorney's office will become."
If there is no possibility of making a case for infringement or counterfeit goods, counsel may consider dilution as a means to protect IP. Dilution is the currently popular means of seeking redress against a similar mark in widely divergent goods. Dilution is an area that is still very much in flux and in doubt, however, and the federal trademark dilution act has been applied very differently in the various circuits. There are state dilution laws that are in some instances much easier to invoke than federal laws. In Texas, Louisiana and Oregon, for instance, you don't have to be famous only distinctive to bring a claim, while under the federal trademark dilution act, fame is a prerequisite to bringing a claim.
When specifically dealing with domain name infringement issues, an additional means of redress is to bring a civil action under the Anticybersquatting Consumer Protection Act (ACPA). ACPA has a number of advantages. One is the in rem action, which allows the complainant to go after the registry or registrar and use that location of that entity to establish jurisdiction. While there are other non-litigious ways to handle domain name disputes, getting the assistance of the district courts is necessary if you want a monetary award, to track down cybersquatters, or overcome administrative difficulties.
Delving deeper into trademark, Mr. Colbert explained the basic proposition that it is trademark infringement for someone else to use the same or a confusingly similar term for either the same or closely related goods or services. There are two main factor based tests used by the courts to determine infringement: the Second Circuit's Test (Polaroid factors) and the Ninth Circuit's Test (Sleekcraft factors). In some recent cases this year, Mr. Colbert noted that the rote application of these infringement tests is being attacked by the circuits themselves. These factors have been eroded over time as the courts have become more sophisticated at parsing out relevance on a case-by-case basis. As a practical consequence of the shifting, Mr. Colbert warned counsel not to use the circuit tests as a checklist.
Mr. Colbert also observed two features of IP litigation revived by recent Supreme Court decisions. First, the concept of functionality may play an increasing role in determining whether a product feature qualifies for trademark protection, as the once-shunned notion of "aesthetic functionality" has been resurrected by the Court in Traffix Devices v. Marketing Displays. Additionally, surveys have enjoyed varied acceptance among the courts over the years, but in Mosely, the Supreme Court held that surveys are valuable tools if used correctly. Mr. Colbert believes this may lead to wider acceptance of surveys, especially in areas such as demonstrating actual dilution.
Mr. Colbert explained that Intellectual Property is not the goal. "Rather," he concluded, "IP helps you achieve your goals by protecting your investments, your market and your identity."
James Galbraith
James Galbraith, also a Partner at Kenyon & Kenyon, discussed the topic of managing the cost of patent litigation. He began by noting that today's high priced world of patent litigation, clients insist that their lawyers effectively manage the cost of litigation. However, effective management of litigation cost is a something that both the client and lawyers share.
The first step for a client to take in management is to have a goal or plan. Ask: Why am I bringing this litigation? What is the downside? What can I lose? What is my maximum exposure? The client needs to think about these things before worrying what legal fees will cost. "Patent litigation is not a moral crusade, it's a business proposition," Galbraith commented. Hence, before brining suit or defending a suit, the client should have a clarified business goal.
When faced with patent litigation, either as a plaintiff or a defendant, selecting counsel is another preliminary and necessary step. The best way to have an officially run case is to hire lawyers who know what they're doing -- and that doesn't necessarily mean the cheapest lawyers available. Lawyers who have experience in patent litigation may not have the lowest rates, but they can translate their knowledge and experience to efficiently manage an ultimately less-expensive litigation.
Galbraith believes that the management of any lawsuit depends on the expectations that the lawyer and the client have going into it. Expectations should be made clear at the outset of litigation. As outside counsel, determine the level of expected cooperation and what kinds of problems are foreseen. Clients should have a reasonable expectation as what the process is going to cost, how counsel is going to staff it, what the attorney is going to do, and who is going to be involved.
The best way to start with reasonable expectations is with a retainer agreement or an engagement letter. These engagement letters can be two-way streets. Clients can have their own engagement letter on their own terms. Clients can define the scope of the work, request a list of lawyers who will be involved on the matter, detail the fee arrangement in advance, and discuss disbursements such as travel policies, photocopy costs and court reporter expenses.
According to Galbraith, clients have several things they should insist upon when retaining patent counsel. The most important aspects include expectations that the lawyers will be efficient and exercise good judgment, that they have a small team with low turnover, that they minimize duplication of effort, and that the lawyers in charge will exercise oversight on activities and disbursements. Additionally clients should have reasonable expectations concerning cost estimates and projections. Frequent reporting of costs and transparent billing are other client entitlements.
The lawyer who wants to run an efficiently managed litigation also has reasonable expectations. One main expectation is that the client will be cooperative, not only before but during litigation. Such cooperation can be providing access to its people, being on the phone when necessary, and not resisting reasonable document discovery.
Lawyers need to realize that the case doesn't belong to the lawyer, it belongs to the client. Thus the client has to make the final decisions, and must be involved in the strategy and principal tactics. Case ownership, however, has to be balanced against temptation on the part of the client to micromanage a litigation, which is a very inefficient way to manage a litigation. Similarly, requiring a justification from counsel for every single task performed is another micromanagement that ends up needlessly costing the client a lot of money. Galbraith believes that clients should at some point let the lawyer do his/her job, which is the way to efficiency.
To control costs strategically, the clients and the lawyers should jointly decide what to pursue and what to drop. Streamline the case. Galbraith noted that, "The temptation in patent litigation is to never let go of any claim, counterclaim or defense." You have to make reasonable judgments on whether you will win on any particular issue, and if not, getting rid of the issue will save a lot of money. Additionally, from a cost perspective, he warns against taking limitless discovery or filing "Hail Mary" motions.
The law firm has the responsibility of managing the case internally within the firm, however the client will be able to tell from the bill whether efficient management is occurring. Some warning signs include the lead counsel not appearing on the invoice, or senior litigators performing tasks, like document review, which can be handled by lawyers with the lowest billing rates.
Galbraith next addressed the use of litigation technology. Document coding technology is used frequently in large cases, and it always pays off to have a good database of discovery documents. Even though document coding is a large expense up front, he believes the costs going forward more than make up for the initial expense.
As a parting thought, Galbraith closed his topic by stating, "The legal world is coming to recognize that patent litigation is a business proposition, and to the extent that it can be estimated, budgeted and efficiently done, it must be."