The Sunset

Speakers:

Michael Smith and Wayne Stacy

 

Description:

Judge Albright continues to provide detailed guidance on the often maddening day-to-day tasks of patent litigation. This guidance can both streamline a case and reduce the costs of litigation—but only if attorneys follow it. For example, we get detailed guidance on the court's approach to court costs, discovery of unnamed products, protective order changes, and counting interrogatories. We even get an interesting case on establishing venue by pointing to employees working at home. And maybe the most illustrative cases this time come from a pair of cases discussing motions to stay—one from Waco and one from Austin. Is a motion for preliminary injunction going to be a prerequisite going forward?

Speakers:

Michael Smith and Wayne Stacy

Once again, Michael Smith highlights some key learning points from the Texas courts, including:

Same plaintiff, different judges, different outcomes--What lessons can we learn from the Sonrai cases and the different decisions in Waco and Austin?  

A delicate balancing act between asking the otherside to create new documents and asking the other side to explain their financial documents.  Can we really find a rule of reasonableness?

LinkedIn abuse--A sharp rebuke about venue gamesmanship and the misuse of LinkedIn profiles.

A textbook case for striking portions of an expert opinion.

Judge Gilstrap explains his views on discovery of negotiation agreements and litigation funding documents.

Past or present--what are the venue impacts of a closed facility?

The Eastern District provides us with a side-by-side comparison of motions for amending contentions. Together, these decisions illustrate the important facts for both sides. Judge Gilstrap also provides us with a wonderful example of what it takes to win a 12(c) motion and strike down a patent under 101. Compare this outcome to Judge Albright's "uphill scrabble" to win a Rule 12 motion on 101. Finally, Judge Albright gives updated guidance on alternative service and about modifying his model protective orders.

For innovation companies, their success is often tied to the skill with which they handle the legal and regulatory issues in their industry. Law and business strategy go hand in hand. And this lesson is especially important for emerging companies… and junior lawyers. Today, we hear directly from a successful emerging company about the need for and value of combined legal and business advice.  

 

Matthew Meyer, Wilson Sonsini

Jake Chabon, Foresight Diagnostics 

Interviewed by Wayne Stacy

Two JMOLs give us a good lesson on strategy and picking your battles. And Judge Gilstrap gives us great guidance on exceptional-case motions.

 

Transcript: 

Wayne Stacy  00:00

Welcome, everyone to the Berkeley Center for Law and Technology's Last Week in Texas podcast, it is March 30. And we're here again with Michael Smith. No Baylor basketball jokes this week, Michael. So we think that that would be good. Well, thanks. Thanks for coming back after my unnecessary shots last week. Well, Michael, I'd love to start this week with a case I think that people would look at and kind of kind of laugh a little bit. But there's a lot more to it. And there was a jury award and Marshall, that might be the lowest Jury Award in Texas and a patent case, a whopping $84,000, which is roughly one trial day for a patent team. So what what's, what can we look at this case and learn? Well,

 

Michael Smith  00:52

it was an interesting case, I happened to be in the courtroom while the jury was deliberating and sending out notes. And I looked over at the plaintiffs table, and there were at least 10 lawyers there. So I don't know what was going on there. Other than this, it's a competitor case. And when it's a competitor case, you don't it's not necessarily about the money damages at the trial. It's it's it's about being able to cut the defendant off from continuing to sell a product that you think is infringing your patents. So, again, I am not focusing on the amount that the jury awarded, I'm focusing on what was being sought by the plaintiff. In that case, competitor cases are getting to be the standard. I've had four patent trials in the last year and Marshall would judge Gilstrap, all four were competitor cases, all four were a larger competitor in a field suing a smaller competitor in a field for patent infringement. And you had similar themes in all of the cases. So we're seeing a lot of that. Coincidentally, the plaintiff's lawyer in that case was my co counsel on the defense side in February, so I need to call him back and find out what happened on that case. One fun thing that happened while we were sitting there waiting to start our hearing is that the jury sent out a note saying, please send back the exhibit with the defendant sales in such and such time period so that we can calculate damages. I tried not to look at the defense table, then because I know how I feel when when a note comes like that. And you're on the defense side.

 

Wayne Stacy  02:28

Yeah, there's there's no, no positive message in that note. Oh, no. Well, well, Michael, I think that it's an interesting point. The stereotype of the Eastern District in the Western District of Texas, is that the only thing that's happening there are in PE cases, and if you use a little harsher language, you know, like some folks do, that it's just those are the two trial courts of the United States patent cases. You're suggesting otherwise?

 

Michael Smith  02:57

Well, the cases that go to trial? Yes, we had a similar case to this that went to trial a few months ago in Waco, where again, the amount that the jury awarded was bizarrely low. But when you go back and you find out what they were fighting over, it was a competitor case. I mean, going back to 1994, the first patent trial I

Satisfying fee awards remain elusive, but attorneys keep asking. Insanity or persistence? Apparently hoping to guide lawyers in their future filings, Judge Albright continues issuing detailed rulings on discovery disputes. This week's important ruling focuses on discovery for related products. And finally, two severance motions with different outcomes. Together, these rulings demonstrate the contours of a successful severance motion.

Transcript:

Wayne Stacy 0:08 Welcome, everyone to the Berkeley Center for Law and technologies last week in Texas podcast. It's March 23. And we are here again with Michael Smith. Michael, thanks for joining us.

Michael Smith 0:20 Well, thank you for having me, Wayne.

Wayne Stacy 0:22 Well, it's good to have you back. You seem to have had a day job for the last couple of weeks that required your attention in court. So thanks for making a little bit of time for us. And with that, tell us tell us what you've been learning in court the last couple of weeks.

Michael Smith 0:37 Uh, well, it has been an interesting couple of weeks, we had another patent trial in judge Gill Strap's court and Marshall, a couple of weeks ago, and I have been busy with that. And it's it's actually the fourth patent trial I've had with Judge Gill Strap in the last 12 months. And what I really learned is that you never stop learning, you never stop finding out new things to object to new ways to make the other side have to do something. It was, as I said, a patent infringement case. The jury came back. According to what we were able to find out, the jury actually deliberated for about 35 minutes after lunch, and came back finding none of the claims infringed and all of the challenge claims invalid. The plaintiff asked for 63 million. So the jury came back with a complete defense verdict in that case, but as I said, it was a fun case, not least because the water went out in Marshall on Friday afternoon before trial. So I had my house set up and some of the members of the trial team coming out to take showers, and otherwise get ready. But that's that's kind of your job when your local council if they need water if they need power if they need heat. But it was a very interesting trial, we had a lot. We learned about how the court wants things done and more efficient ways to put things on

Wayne Stacy 2:01 anything in particular?

Michael Smith 2:03 Well, impeachment with a prior deposition is something as I said, a few weeks ago, Judge Albright said for the love of God, if you're going to be in a courtroom, know how to impeach with a prior deposition. Well, what I learned in this trial is, you may think you know how to do it, because that's how you've always seen it done. And what we found out is if somebody stands up in objects, the judge may have an opinion about the way that everybody's used to doing it is the right way of doing it or not. Well, we've always paid close attention to how judge Gill strap wants this done. But what we learned when objections were made is that He requires that the witness's memory be refreshed with a copy of the deposition before you put it up in front of the jury. Well, that wasn't the way most people do it. So you had to ask the question, get the answer, then say Do you remember having your deposition taken? And then give them the page of the deposition? Which actually works out fine, because in patent cases, we hand up giant notebooks for all the witnesses anyway. If you tell the jury, or I mean, you tell the witness to flip to page 35. Look here, you see, I asked you this question. Yes. And your answer was this, wasn't it? And only if they deny it, can you then put it on the overhead and show it to the jury? Now, if no one objects, that's what people do all the time. But what we learned in this trial is that that is an objec

What is the difference between bad behavior and sanctionable behavior? And can bad behavior be cured? Two opinions give us excellent guidance on these questions.

 

One of the most interesting questions this week—what is the difference between Waco and Austin? Judge Yeakel's venue decision tells you all that you need to know.

Judge Albright continues to provide detailed guidance on motion practice in his court. These cases illustrate what motions not to file and how to better craft the motions that you do file.

 

SPEAKERS

Wayne Stacy, Michael Smith

 

Wayne Stacy  00:00

Welcome, everyone to this week's Berkeley Center for Law and Technology's Last Week in Texas podcast. I'm your host, Wayne Stacey. And once again, we're here with Michael Smith. Michael, thanks for joining us.

 

Michael Smith  00:13

Glad to be here. Wayne. Good to hear your face, so to speak.

 

Wayne Stacy  00:19

Well, the good thing is this is not last week in Texas. This is the last two weeks in Texas, because you had to take some time off last week to do your day job and actually try a  case.

 

Michael Smith  00:29

We did we had a patent infringement trial and judge Gill straps court across the street here in Marshall. And so it was a good week, we got a jury verdict back of non infringement. Claim is valid but non infringement last Thursday. And since I lost one over there in November, I had almost forgotten how good winning one felt. But I was very proud of it very happy with our trial team in that case.

 

Wayne Stacy  00:57

That's one of the problems with with trial work. If you're only try one every six months, you get seems like six months to stew on a loss in about 10 days after the win you just go back to work and you've lost that high. So there's more downside than upside?

 

Michael Smith  01:14

Oh, absolutely. Absolutely.

 

Wayne Stacy  01:16

Well tell us what you what you learned in this this trial?

 

Michael Smith  01:20

Well, it was an interesting trial. I kind of got parachuted in a couple of weeks before trial on it, which is not my preference. But my co counsel had done a good job preparing it, which isn't surprising because the case was eight years old. This was a fight between two oil and gas drilling companies. Shortly after it was filed in 2014. Because the Eastern District was so short on judges, Judge Gillstrap shipped a couple dozen cases to a judge in Houston, Judge Atlas. And she worked up the case over the next seven years, there were some stays, there were some other things and then shipped it back when it was ready for trial. So when we went to trial, we had expert reports that were over two years old, and everything had been prepared before a different judge. So Judge Payne ruled on some final motions. And then we went to trial, but on reports that were over two years old. So that was interesting, the most important thing that I learned in the trial, which I knew, but it's never been more important than this case is. The judges the trial patent cases down here are very, very strict on your expert has to stay within the four corners of their report. And in this case, we were fortunate that the plaintiff's infringement expert's report was only 15 pages long. So we actually had Judge Gillstrap excluding some things at trial. And we had the unique situation where you know, those boards we always put up that has all the claim elements and your expert. Can I check this sir? Yes. Can I check this off? Okay, all the boxes are checked now. So does this mean there's infringement? Yes, it does. The expert actually couldn't check all the boxes in half of the claims, which is something you don't normally get. So by the time we got to closing argument, we were able to pull out the the boards and say, You never heard an expert testify on this. And that helped out a lot when it came time for the jury to look at it.

Teaching moments in Texas. Trial guidance from Judge Gilstrap and guidance on infringement complaints.

 

SPEAKERS

Wayne Stacy, Michael Smith

 

Wayne Stacy  00:00

Welcome, everyone to the Berkeley Center for Law and Technology's Last Week in Texas podcasts. We're here again with Michael Smith. And Michael has a whole host of I think what he described as teaching moments for us this week. So Michael, thanks for joining us.

 

Michael Smith  00:17

Well, thank you for having me. Wayne, it's it's certainly been a fun week. And it is the last week in Texas because the whole state shutting down tomorrow for our winter winter storm. So maybe you'll see us next week. Maybe you won't.

 

Wayne Stacy  00:31

After spending my life growing up in the panhandle of Texas, I'm not sure that a Marshall winter storm scares me, but I understand freezing rain. Well, so Michael. We're talking about teaching moments and things that loggers do for themselves and to themselves. You want to start with motion for leave to amend invalidity contentions.

 

Michael Smith  00:54

Yeah, we talked about one of these motions last week. And fortunately, we came up with two more orders on this out of martial this past week on motions for leave to amend infringement contentions and invalidity contentions. And let me start with the invalidity. Here the defendant was seeking leave to supplement with some additional information that it obtained from third party subpoenas. It was limited to background and support for systems that were disclosed in the original contentions and the plaintiff probably shouldn't have oppose this one. Judge Gilstrap agreed that the definitive been diligent in supplementing, and that the delay was just caused by the inevitable time necessary for third parties to respond to subpoenas and provide nonpublic information regarding prior art systems. So there's an order saying, yes, you can amend your invalidity contentions to add the things that you get through discovery. We had another case out of the Marshall courthouse last week where Judge Payne ruled on a plaintiff's motion for leave to amend its infringement contentions. And the interesting thing here was, it was just one document that was received from a third party and the defendant was was claiming this is only important if the original contentions are wrong, and they have to change to save their case. I mean, very theatrical objections which the judge was very receptive to, but the teaching moment here is not just don't be a jerk when a party wants to amend. But it was that the defendant hadn't explained how it was prejudiced. The plaintiff noted the defendant hadn't asked to brief additional terms or construction hadn't said we need to go back and need to change terms or constructions or anything else. So the defendant complained about the amendment, but they were given an opportunity to show prejudice, and they didn't. So that's kind of a double lesson there. Number one, make sure the record is clear that the other side is not providing something short of striking the contentions. And number two, don't be a jerk.

 

Wayne Stacy  02:59

Well, Michaels, we move on there was Judge Gilstrap had a motion to dismiss against direct and indirect and willfulness. It was just a big motion.

 

Michael Smith  03:10

Yeah. And and we see those a lot at the beginning of cases. And I mentioned this because it's a good case for the marshal judges 26 standards on when you've adequately pleaded direct and indirect infringement. In fact, earlier this morning, I was reading the same kind of order by Judge Albright in Waco that we'll probably talk about next wee

Who's afraid of a design patent? An ex parte injunction demonstrates that we should all be paying attention. And how much is enough when it comes to claim charts? Judge Albright gives us meaningful guidance and a strong warning about second chances.

 

SPEAKERS

Wayne Stacy (BCLT), Michael Smith (Scheef & Stone)

 

Wayne Stacy  00:06

Welcome, everyone to the Berkeley Center for Law and technologies last week in Texas podcast. I'm your host, Wayne Stacey. And we are here once again with Michael Smith. You've heard me say it before. If it happened in Texas, and he doesn't know about it, it does does not matter. So with that in mind, Michael, why don't you take us to the the Eastern District of Texas?

 

Michael Smith  00:30

Well, thank you, Wayne, good to be here. Today, I want to lead off with a what appeared first blush to be pretty simple case, defendants came in and the case got settled. And they wanted to have their defenses dismissed without prejudice. It's kind of an unusual situation. You know how sometimes if you're a defendant, and it's a customer suit, the manufacturer, the customer will come in and say, hey, we'll be bound by whatever happens to the manufacturers case? Well, the defendant did that here. And it didn't work out so great. The parties went, they settled the case, they had an MOU, and they had an interesting provision there, they said, We're going to take 50 days to negotiate a final settlement agreement. If we can't do that, within 50 days, then the final settlement agreement will become a final and binding settlement agreement. And that provision said that all of the claims in the case will be dismissed with prejudice. So one of the defendants comes in who had kind of given control to the manufacturer to to resolve the claims and said, Oh, wait a minute. No, no, no, I want my affirmative defenses dismissed without prejudice. And the court said, No, you gave this other party when you were when you wanted your case stayed under under the customer suit exception. You said I'll be bound by any final judgment. So the court said no, you're stuck with how the Settlement Agreement got worked out here. Now, it's not clear that there was actually legal prejudice to that defendant. But it's I think it's an important reminder to us to be careful what you agree you'll be bound by and check the wording carefully on those mo use, because this could have been fixed at the MOU stage if someone had been paying attention to the exact language, probably at eight o'clock at night when they were trying to get a case settled the night before the pre trial conference.

 

Wayne Stacy  02:22

Well, and that's this is, I guess, the second week that we've had this kind of post settlement disputes where we had an agreement, but not quite. And it's it is a good lesson. But it goes back to one of my favorite provisions, letting the the mediator have baseball style arbitration for any disputed provisions. And it cleans things up a lot. Because you're not been there eight 910 o'clock at night before an opening arguments a hard time to make sure you got all the little, little issues like this closed up.

 

Michael Smith  02:56

Well, in the baseball style is a great way to go. There's there's another one I can suggest I had a couple of mediations last year with a magistrate judge in the Sherman division Eastern District Judge Christine Novak. And in her court, she did baseball style. But the other thing she did is as soon as she walked in to start the mediation, she handed you or she or she told you, I want you to start writing the settlement agreement. What