Don't litigate over patents if you can avoid it. It usually costsmore money, time and emotional resources than it its worth.
This was the message at a recent seminar of the WashingtonMetropolitan Area Chapter of the American Bar Association.
In biotechnology, there have been about 99 patent cases,nearly half of which are still pending, said Susan HabermanGriffen of the Washington firm Finnegan, Henderson, Farabow,Garrett, & Dunner. Seventy-two cases involved infringementand validity, six involved trade secret issues. Most majorpatents spawn multiple lawsuits; six for erythropoietin, andthree or four for polymerase chain reaction, for example.
"I'm involved in a case that has produced 4 million pages ofdocuments," said Griffen. "The documents came from bothfirms' scientists, and collection disrupted their research andlaboratories."
"When you commence patent litigation, you lose control -- overthe expense, over the time of your scientists, yourmanagement, your board of directors and yourself," saidWilliam Lee of Hale and Dorr. "You lose control over theconfidentiality of your technology and you place control of theultimate result in the hand of someone else -- and you don'teven know who that is."
One must be certain, then, of what one wants to achievethrough litigation, said Lee, in order to answer the followingkey question: Is it a good business decision to lose all of thosethings in pursuit of your goal?
If so, "be prepared to go the distance rather than to settle. Infederal courts of the U.S., 95 percent of the civil cases getsettled and never go to trial," said Lee. But in biotechnology,about half have been going to trial.
If litigation makes sense, the next decision is whether to have ajury trial.
It is easier to control the variables in a bench trial. "You aretalking to an audience whose quirks and predispositions areascertainable," said Lee. "Generally, in a bench trial, the judgetakes complex facts, complex legal principles and reaches whatis legally the correct result."
Juries are comparatively inscrutable. And with educations thataverage 10th or 11th grade, they rarely can absorb more thanthree or four new concepts, no matter how long the trial lasts,Lee said. He recounted how the foreman of the t-PA jury, atruck driver, following the trial had told one of the lawyersthat he had dropped out of school to avoid biology, and hadresented the lawyer's efforts to teach it to him.
But juries almost always reach a fair decision, Lee said,whether or not it is legally correct. So if you clearly wear thewhite hat, this is likely the way to go.
In jury trials, focus groups and mock trials can be helpful, saidLee. In a non-biotechnology patent case that he litigated, Nikevs. Rebock, two focus groups quickly concluded -- correctly,according to Lee -- that it was a battle of egos, and "it changedthe fundamental strategy."
Mock trials can provide valuable information to clients as tolikely outcomes, said Lee. But don't bother with shadow juries.In the t-PA case, both sides' juries predicted invalidation -- thewrong outcome.
From a policy standpoint, the biotechnology industry needs tocome to grips with the need for licensing, said Griffen. Lack oflicensing has stymied progress in other industries. "In 1919,the U.S. Navy found no single companies making radios whichpossessed basic patents sufficient to enable them to supply theNavy with a complete transmitter or receiver withoutinfringing on someone else's patent," said Griffen. "That may bewhere biotechnology is headed."
The good news is that as industries mature, litigation diesdown, said Lee. "Generally, rationality takes over, and thepeople who are going to be the players long term haveretrenched, and sound business decisions take over. Cases gettried generally only if there is a matter of principle or anirrational person on one side or the other."
But during an industry's infancy, he said, "staking out yourposition can become a matter of principle."
-- David C. Holzman Washington Editor
(c) 1997 American Health Consultants. All rights reserved.