Monday, January 5, 2015

Some Recent Papers on Recovery of Attorneys' Fees and Costs in Patent Litigation

1.  Luke McDonagh and Christian Helmers have posted a paper on ssrn, originally published in Civil Justice Quarterly 32(3) (2013) pp. 369-84, titled Patent Litigation in England and Wales and the Issue-Based Approach to CostsHere is a link to the paper, and here is the abstract:
In England and Wales legal procedures with regard to patents are said to be both lengthy and costly. Nonetheless, at present there is little factual empirical evidence on procedural and costs issues in the UK. This makes it difficult to comprehend the state of patent litigation within the wider framework of civil litigation. The provision of analysis of both the processes undertaken and the costs accrued at the PHC is therefore of crucial importance. With this in mind, this article first explains the procedures for taking a patent case at the PHC and outlines the types of cases which typically occur, such as actions for infringement and challenges to patent validity. Secondly, in order to substantiate our analysis we examine a sample of 18 cases filed during 2000-2008 with regard to costs. We examine the discretionary, issue-based approach, the guidance given at the PHC to costs assessment judgment. and the way the courts deal with interim costs issues. Our study confirms that the costs of patent litigation are high, with the average cost of a full trial at the PHC, encompassing the costs of both sides, falling between £1 million and £6 million. We further explore the reasons for the high costs, including the strong disclosure requirement and the need for scientific experiments and expert testimony. Finally, we note that the perception of costs risks has the potential to influence the types of claims brought to the PHC, the rate of settlement of cases and the volume of cases. 
2. As noted recently on PatLit, Filip Fischmann, the Program Director of the Munich Intellectual Property Law Center (MIPLC) and Research Fellow of the Max Planck Institute for Innovation and Competition, has a paper coming out in the Journal of Intellectual Property Law & Policy titled Patent litigation and cost shifting in Europe: critical appraisal and proposal of alternative solutions.  Here is the abstract:
This article analyses different costs rules and practices regarding patent litigation in Europe, explains the functions played by cost-shifting provisions and proposes the introduction of a modulated two-way fee-shifting system, in order to enhance patent litigation.
Mr. Fischmann's paper focuses on the standards for recovering attorneys' fees in patent litigation under the Enforcement Directive, under English and German law, and under the UPC Agreement.  He proposes that the UPC Rules should "make use of costs scales, profiting from the German experience, and of an issue-based approach, benefiting from the English and Welsh practice"; and that "the UPC should reformulate the English and Welsh experience with certificates of contested validity and create a modulated two-way fee-shifting system," under which a patent owner who has successfully fended off an initial validity challenge would be able to recover a greater share of the costs it incurs in subsequent validity challenges.  Very interesting paper.
    
3. Randy Lipsitz, Aaron Frankel, and Hanna Seifert published a short paper in the October 8, 2014 issue of Bloomberg BNA Patent, Trademark & Copyright Law Daily (available here, behind a paywall), titled recent Supreme Court Decision Takes Us Back to the Future:  Attorney Fee Award Rate Increases in Patent Cases.  The authors samples 100 decisions from 2004 or earlier in which district courts considered whether to grant attorneys' fee awards under a discretionary totality-of-the-circumstances test; 100 cases from 2011-13, which applied the Brooks Furniture rule that the U.S. Supreme Court overruled in Octane Fitness; and all 40 post-Octane fee award cases published through September 18, 2014.  They report that fee awards were granted in 42% of such cases prior to 2004, in only 32% from 2011-13, and in 45% since Octane Fitness.  (Note, though, that the cases sampled are cases in which the court chose to publish a decision on whether to grant fees or not, which is surely a minority of cases.  Prior to Octane Fitness, I roughly estimated that about 5-7% of cases resulted in an award of attorneys' fees, based on others' published statistics (see here).  After Octane Fitness, the percentage may be higher, but the statute still only permits fees in "exceptional" cases.)  

4. More recently, Amanda L. Major and Jonathan Uffelman published A Practitioner's Guide to Post-Octane Fitness Decisions:  The New Landscape of Section 285 Attorney Fees in the December 10, 2014 issue of Bloomberg BNA Patent, Trademark & Copyright Law Daily (available here, behind a paywall). The authors examined the now-60 post-Octane Fitness decisions and have analyzed the relevant factors, including such matters as the relevance of pre-suit investigation, legally and factually unsupported arguments, and attempts to extract nuisance-value settlements, that may support an award. 

1 comment:

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