Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

As usual, on a holiday I take a break from posting about cases and bring you a holiday-themed patent.  U.S. Patent No. 7,240,376 assigned to Riddell of Chicago covers a football helmet with ear flaps that extend to protect a portion of a wearer's jaw.  This is not exactly a patent focused on the New Years holiday or setting your goals for 2008.  But my focus will be on watching my Wolverine's and my wife's Illini play football today.

Happy new year.  May 2008 bring you happiness and success.

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There is a debate brewing in the patent litigation community over the correct scope of a state institution's waiver of 11th Amendment immunity when that institution asserts its patents. In Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999), the Supreme Court held that state institutions were immune from patent infringement suits. Of course, if a state institution asserts a patent claim against a party, immunity is generally waived as to that party for counterclaims. But the Federal Circuit recently held in BPMC v. California Dept. of Health (Fed. Cir. 2007), that when the California Department of Health (“Cal. DoH”) intervened as a plaintiff in a patent suit (which is considered a waiver of immunity), it is only a waiver as to that suit. So, when the original suit was dismissed because of improper venue, the waiver was rescinded. As a result, the defendant in the first case, BPMC, could not bring a declaratory judgment suit that mirrored the original suit because of the Cal. DoH’s 11th Amendment immunity. 

The Federal Circuit’s decision has ignited substantial controversy (click here for the WSJ Law Blog’s article on the subject and click here for IP Biz’s responsive blog post) and some are predicting that this will be the next patent case that the Supreme Court takes on cert. It is an interesting issue, but not one that we see often in the Northern District, which caused me to investigate whether Chicago-area colleges are prolific patentees. None makes the top ten, like my alma mater the University of Michigan – Go Blue! But there is some substantial patenting going on at Chicago-area universities. The following chart show the number of patents assigned to the identified universities or their related entities between 1969 and 2005:

As you can see from the chart, this issue has significant consequences for Chicago-area schools. I will keep you posted as the case develops.

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According to yesterday's Chicago Daily Law Bulletin -- Trial Courts May Take on Patent Cases (subscription required, but a free, 15-day trial is available) -- the Northern District of Illinois judges are split on the value of  a proposed pilot program.  The program would provide judges who volunteer to take patent cases with extra training and the assistance of specialized law clerks.  Cases would continue to be randomly assigned.  But after a patent case was randomly assigned, if the assigned judge rejected the case it would be reassigned to a judge participating in the patent program.

Chief Judge Holderman is a proponent of the pilot program.  Chief Judge Holderman explained that the system would benefit the patent bar and that is not new to the federal courts because senior judges already have the option of rejecting cases, which are then reassigned.   You can read more about Chief Judge Holderman's views on patent litigation in the district courts in an article he recently authored with his law clerk, Halley B. Guren, advocating, among other things, providing district judges with specialized patent training and reassigning patent cases to those judges -- "The Patent Litigation Predicament in the United States."*

Judge Kocoras, on the other hand, is "not crazy about" the program, believing that district judges are generalists who "should all take the luck of the draw."  He sees the patent pilot program opening the door to other areas of specialization among Article III judges.

Judge Moran likes the program and says he would volunteer for it.  Although, he notes that allowing "judges over 50 [to] handle computer software issues may be a violation of due process."

* The link is to a draft of the article which is in the process of being finalized for publication in the University of Illinois's Journal of Law, Technology & Policy.

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Jay Kesan  and Gwendolyn Ball  of the University of Illinois  Law School recently published a very interesting article in which they detail their empirical analysis of patent litigations.*  For the study they tracked 3,700 patent litigations beginning as early as 1995.  Among other things, they found that 80% of patent litigations settle and 95% of patent litigations are resolved prior to a full trial on the merits.  These should not be shocking results to patent litigators, but what may be more surprising is the results of their analysis of the cost of patent litigations.

* Thanks to the 271 Patent Blog for identifying the article.

While they could not directly review attorneys fees for the cases, they used the length of the case (which they admit may be a flawed indicator because of delays and stays for various reasons), the number of documents filed in the case (because each filing costs attorney time), and whether a case reached claim construction and summary judgment phases (which are attorney time intensive).

The study found that half of the patent litigations were resolved within ten months of filing.  The also found that expenditures for patent litigations were relatively "modest", although they acknowledged that their cost determination was skewed downward by the large number of cases that settle or are otherwise resolved in the first year of the litigation.  The study also showed that litigations that did not settle quickly and went through summary judgment or trial could become relatively expensive.  Of course, expense is relative.  If the damages potential is large enough, attorneys fees for counsel that get an award for you or prevent one against you will see well worth the return

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