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

My latest IP for Your Business column has been published in the Southeast Texas Record, and its sister publications the West Virginia Record and the Madison (Illinois) Record, focused upon crafting an effective social media policy for your business.  With the Record's permission I am reposting the article on the Blog.  Click here to read the column at the Record.  And if you are an executive or business owner that is reading this and thinking that you do not need to worry about social media because you do not allow, read the article.  It will give you some pause and may change your mind.   Here is the article:

Social media is a terrifying unknown for many businesses. There are countless opportunities to lose control of your corporate message. And as I have discussed before, there are new and varied ways to have your trademarks and brands stolen or diluted.

But an equally serious concern is what your employees are saying about your company. Every employee is now potentially an unsupervised spokesperson for your company twenty-four hours per day, 365 days per year. And each of your employee's unapproved statements is being categorized by search engines and forever identified with your company on Twitter, Facebook, personal employee blogs and other third party sites.

How does a reasonable company react to each employee being turned into an unregulated source of public information? Some are paralyzed. Others ban all use of social media related to the company. This is a facially reasonable approach.

You no longer have to worry about your employees' intentional statements about the company. But there are two significant problems with this approach.

First, you will drive some users underground. They will continue generating public content, but will attempt to do it anonymously. Of course, you can generally find them, but that can backfire as a public strategy, and you may not find them before damage is done, intentionally or accidentally.

Second, your employees likely see a distinction between their personal and work lives that may be far less clear than they realize. For example, an employee might post the following on Facebook and Twitter:

"@EngineerJim is sick as a dog and not thinking clearly, but working through it so that I have enough personal days for Orlando next month."

It is an innocent post by a good employee who is making a common mistake. But if a customer that has a big deadline that day is part of Engineer Jim's social network, your customer may see things differently. And the results could be even worse if an employee accidentally tweets a detail of a confidential project on the date of a key product launch.

The safest approach to social media is to allow your employees to use social media as part of a broader corporate social media policy. Working with counsel to develop a comprehensive social media policy will protect your company and allow you to harness the value of employees spreading the message of your company's value and benefits. Here are the broad outlines of such a social media policy:

1. Make it Clear

The policy must be clear to be effective. So, write in plain English. Whenever possible, use examples of acceptable and unacceptable postings. Examples help guide your employees, sometimes more than the written policies. But make it clear that the examples are not comprehensive.

2. Allow for Questions

Social media changes quickly, and your policy cannot keep up with it in real time. So, provide a contact for questions. And because social media is fast-paced, commit to getting answers to most questions within a few days or at least a week.

3. Identify What is Allowed

Make the rules as clear as possible, and, again, use examples. Identify whether postings may occur at work, on breaks, or never doing work hours. Lay out what types of posts are off-limits as work-related, such as the Engineer Jim example above.

Determine whether an employee can have a blog about the company or within the employee's job area. On one hand, it is easiest to exclude these blogs. But before doing that, look at other companies like Sun Microsystems and Microsoft that have successfully allowed employee blogs. If you do allow blogs about the company, consider requiring that employees register the blogs. A registration requirement makes sure you know which employees are blogging and allows you to follow what they write. In addition to being a valuable marketing tool, following employee blogs can be an excellent indicator of employee issues and concerns.

4. Develop a Review Process

As with all things, mistakes happen. So, prepare a plan for dealing with any objectionable or harmful content posted by employees. Identify how quickly content must be removed upon your request, and outline any appeal process. Also, make any consequences for publishing objectionable or harmful content clear.

5. Give Someone Oversight Responsibility

Identify someone, perhaps a General Counsel or even someone in Human Resources, to administer and oversee the policy. Giving an individual ownership and responsibility insures that the program does not become a forgotten section of the employee handbook. That person should also be responsible for setting up a variety of searches to identify any internet or social media mentions of the company and its brands.

Developing this policy takes some work, but it will pay dividends in terms of employee satisfaction, message management, and preventing social media accidents. And it will allow your company to harness more of the value of social media and the internet at a relatively low cost.

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My latest IP for Your Business column, published in the Southeast Texas Record, and its sister publications the West Virginia Record and the Madison (Illinois) Record, focused upon protecting your company from the often overlooked danger of copyright infringement.  With the Record's permission I am reposting the article on the Blog.  Click here to read the column at the Record.  And if you are an executive or in-house counsel that is reading this and wondering how to protect your company from copyright infringement issues, the article provides a framework for doing just that:

You likely spend significant resources making sure you do not infringe your competitors' patents, trademarks and copyrights. No legitimate business would intentionally copy its competitor's manuals, or confidential business plans.

But despite that, many businesses are unknowingly infringing a wide range of copyrights each week as a part of their employees' normal corporate activities.

A media relations associate may photocopy news articles about the company or its competitors and distribute them to key executives who require the information. Another may add key articles to board books in preparation for a board of directors meeting.

A sales director may make a company-focused parody of a popular song to rally the sales force and boost sales. Or an engineer may copy a chapter or two of a useful engineering text.

In each of these cases, if you asked, the employee would be surprised to learn they were infringing a copyright.

But it is not just the infringement; they are also exposing themselves and the business to significant liability. And your employees would be shocked to learn that no matter how slight the infringement, the maximum statutory damages for infringing a single copyrighted work is $150,000. That's $150,000 for copying a single article.

Even more shocking to most people is that forwarding a newspaper article via the Internet for business purposes is also generally an act of copyright infringement.

It is easy to imagine the all-too-common scenario. You, as your company's president or general counsel, receive a letter demanding that the company cease and desist its infringement, in this case the alleged forwarding of an e-mail newsletter for which the company had only purchased a single use license.

After some digging, you learn that the forwarding was done by Jim in sales, at the direction of his immediate supervisor Sue.

Both Jim and Sue are floored. All they did was forward copies of an e-mail newsletter that they had legitimately purchased, and that their entire team needed.

Unfortunately, neither Jim nor Sue appreciated that forwarding the publication was only allowed if they purchased a group license.

Because they had forwarded one copy a week for 20 weeks, the company's potential infringement was $150,000/weekly copy or $3 million.

Most of all, the entire incident could have been avoided if the company had implemented a copyright compliance program. When I put on copyright compliance programs for clients, they are routinely amazed at how inexpensively and quickly we are able to both fix current issues like these and prevent future problems before they happen.

While you should consult a qualified lawyer to make sure your copyright compliance program is comprehensive and correct, here are the basic steps that are required:

1. Audit copyright use & policies

Start by auditing your corporate use of copyrighted materials.

Depending upon your company's size, you can do one company-wide audit or do audits by division or product line. Consider how you internally and externally use third party publications like trade magazines and newspapers.

Are you routinely photocopying copyrighted material to distribution lists? Do you pdf and forward copyrighted materials?

Do you have a corporate policy in the employee handbook explaining how you expect employees to handle copyrighted materials? If you do, when was the last time you reminded your employees of it?

Do you have reminders posted at copy machines and pdf stations?

Also, look at how your employees use the Internet. Forwarding links is generally fine, but copying and pasting Internet content can get you in trouble.

2. Educate

Once you have a realistic understanding of your corporate copyright use and any areas of concern, you need to educate your employees about copyrights.

In my experience, a presentation made directly to your employees in small groups of no more than 20 is exceptionally effective.

By laying out the copyright laws and the consequences of breaking them for the employees themselves and the company, you will accomplish two things: 1) you quickly stop some unintentional copyright infringement; and 2) copyright issues that you may not have identified in your audit rise to the surface.

It is critical that as part of your employee education you give employees a way to raise private questions about potential copyright issues.

When I give copyright compliance seminars, I have found that one series of 90 minute client-to-employee presentations can lead to two to three days of identifying and resolving potential copyright issues with the employees. But it is three days that can remove millions of dollars in future corporate liability.

3. Ask permission

Ask permission. This is the simplest step of a copyright compliance program and perhaps the least followed. When you need to use copyrighted material, ask permission first.

If you ask the copyright holder for permission to use, forward or reprint their material they often agree. More often than not they are so happy that their content is useful to you that there will be only a moderate charge or none at all.

The simple act of seeking permission will significantly reduce your copyright risk footprint.

4. Consider a Copyright Clearance Center License

If you find that your business requires employees to internally copy, distribute or forward copyrighted content like newspaper and magazine articles or textbooks, consider a Copyright Clearance Center ("CCC") license.

The CCC was created by a group of copyright holders to license "incidental" use of their copyrighted content.

Those copyright holders that join the CCC are paid a portion of license fees from the CCC licenses. In return, the licensees are free - depending on the particular license chosen - to copy and forward content that is part of the CCC.

The license is priced based upon the size of your organization and gives access to a significant amount of copyrighted content.

5. Rinse, lather & repeat

Finally, do not just set up your copyright compliance program and forget it. Continue to watch for copyright issues. Make sure to continue employee education.

At least every year, remind employees of your corporate copyright policy by memo or e-mail. Offer all new employees your copyright compliance program, as well as offering a periodic refresher for current employees. Post reminders of your copyright policy at copy machines and pdf stations where accidental infringements can be prevented.

The more you incorporate copyright compliance into the fabric of your company, the safer the company will be from the expensive threat of copyright infringement.

R. David Donoghue is an intellectual property litigation partner with Holland & Knight LLP in Chicago. He can be reached at (312)578-6553 or david.donoghue@hklaw.com.
 

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I recently started writing a column for the Southeast Texas Record, and its sister publications the West Virginia Record and the Madison (Illinois) Record.  The column is titled "IP for Your Business" and focuses on IP issues faced by businesses of all sizes.  The columns are not Chicago-specific, but I will post them here anyway, and with the Record's permission I will post them on the Blog because many Blog readers will find it valuable to have articles addressing bedrock IP issues, as well as how to deal with real world IP issues with a special emphasis on protecting against third party IP and monetizing your IP.  The first column (click here and here to read it) lays out seven steps for reducing patent litigation budgets while improving the quality of your case:

Increasingly, every industry and size of business feels the pain of patent litigation. Even small or medium-sized businesses are not exempt.

Most cases start the same way. A letter is sent to your company's president, CEO or general manager. The letter lists one or more patents, warns of patent infringement often with little other detail, and offers a license.

You turn to a search engine such as Google or Bing and quickly learn several facts: 1) the patent holder is a shell company, not a company that makes a product or offers a service; 2) you are one of many actual, potential or past defendants; and 3) you are angry and frustrated.

Once you get over your initial reaction, you need a plan. But how do you handle the increasing number of similar cases you are seeing, without destroying your legal budget and diverting your legal team's valuable resources from projects that are mission critical for your business?

Or as a company new to patent litigation, how do you handle your first patent dispute?

After dealing with these issues both as in-house counsel at a Fortune 100 company and as outside defense counsel, I have found that seven straightforward strategies significantly streamline case budgets while positively impacting case strategies.

1. Hire a Patent Litigator

The first thing you need to do, particularly if you do not have a general counsel or someone else with litigation experience, is to hire a patent litigator. You might be inclined to use your normal counsel, but before making that decision, make sure they have patent litigation experience. Patent litigation is a unique and complex area of law.

Many federal district courts even have special local rules for patent litigation. You want a lawyer who you trust and who has patent litigation experience. If you do not know a lawyer fitting your needs, ask lawyers and business contacts for recommendations.

You can also search for lawyers that are skilled in your technology or have expertise in your court. Also, resist the urge to delay hiring a patent litigator until you see if settlement efforts work.

Spending a little on a patent litigator during settlement talks can save large sums if the settlement falls through. Too often, a business person or lawyer that does not understand the intricacies of patent litigation will unintentionally make a statement that harms litigation positions down the road.

2. Establish A Joint Defense

If you have co-defendants, this is easy. Seek them out and set up a formal joint defense group. Make sure to determine whether you will split any costs.

You can often share invalidity experts. You can sometimes share noninfringement experts also, but even when you cannot, you can at least coordinate them. Determine who is in control amongst the co-defendants and how payments will be split before engaging the expert, not after the first bill is received.

If you are the only defendant in your case, seek out current and past defendants from other cases. They can provide valuable insights into invalidity, opposing counsel and the case strategies they found most effective. And if their case is ongoing, you likely have a common interest allowing you to establish a joint defense and take advantage of the benefits discussed above.

If your entire industry is being targeted, contact your competitors that have not been sued. They may have received a letter charging infringement. Even though they have not been sued, they can still have a common interest that allows you to collaborate.

3. Define Your Role and Manage Your Joint Defense Group

A joint defense group can be a valuable source of information and cost savings, but you must enter a joint defense group with a clear plan and clear goals. You should decide whether you want to lead the group, to actively participate or just to follow. Leading is the most expensive, but offers the most control over your defense.

Most, however, will choose active participation. This gives some control while moderating costs. Finally, smaller entities or those with little at stake in the litigation often choose to follow.

This role requires the least work and cost, while offering the benefit of at least the parties' joint defenses, like invalidity. The downsides are less of a voice in strategy decisions and less cooperation from co-defendants that may see you as a free-rider.

Even with a plan, joint defense groups can become a significant cost, as well as a time sink. There can be heavy e-mail volume, group conference calls and meetings that increase in length and frequency, and it can be difficult to make the nimble strategy corrections required in litigation when you need group buy-in.

Of course, some group communication is required. But you can manage meetings by agreeing ahead of time that every meeting requires an agenda and a time limit. Agendas and time limits avoid endless meetings full of off topic and unexpected issues that no party is prepared to answer.

Also, for larger joint defense groups and during busy portions of any multi-defendant case, like the close of discovery or claim construction, consider scheduling a set call, with agendas and a time limit allowing people to raise issues ahead of time.

Regular meetings can cut down on email traffic over small issues. When you know one or two co-defendants will require convincing of a position, consider contacting those parties one-on-one before the meeting to avoid delaying the entire group and building consensus for your ideas.

Finally, whenever possible hold meetings live. When all co-defendants are on a conference call, you run the risk of the call dragging because one or more participants are distracted with other work, office visitors, e-mail or the internet. Putting everyone in a room together minimizes distractions and encourages active participation, leading to shorter meetings.
 

4. Data Mining

If your patents have been litigated before, get as many of the prior pleadings as possible.

Many get the prior cases' final decisions, but it is a mistake to stop there. You want to see answers and counterclaims, any court orders, pretrial filings, jurisdiction motions, summary judgment motions and even discovery motions. You can learn a lot about plaintiff's case strategy and fact issues based upon what plaintiff says in discovery disputes.

For example, you may learn what documents plaintiff is missing, details of how plaintiff keeps financial information, and what documents plaintiff does not want to provide.

Additionally, privilege disputes can tell you what documents to look for on plaintiff's privilege log that may not be privileged and you may find old privilege logs which you can use to confirm plaintiff has provided a complete log.

Finally, claim construction, noninfringement, and invalidity briefing and supporting declarations are important sources of both plaintiff's case strategy and potentially contradictory statements by plaintiffs, their experts and party witnesses. You should review these papers whenever you are preparing a technical pleading from plaintiff.

5. Prepare Your Noninfringement and Invalidity Positions Early

Too often plaintiffs, expecting a pre-trial settlement, do not prepare their technical case until immediately before claim construction begins.

As a defendant, you can leverage this by preparing your case early. You can then use your deep understanding of the case and your positions to build your defenses in depositions, interrogatories and requests for admission. And your strong discovery position can set you up for a more effective summary judgment motion or a more favorable settlement.

6. Staff and Run a Lean Team

In addition to decreasing your litigation budget, a lean defense team protects against a favorite tactic of patent trolls - using the size of a corporate defendant's legal team against it.

When your legal defense is put on by two, or at most three, lawyers working principally with one corporate contact, every member of your team will know the entire case. You will avoid the cost of the technical specialist without litigation knowledge or the invalidity specialist that is not grounded in your noninfringement positions.

A lean team with each member having a larger percentage of their time on your case also avoids decision-making without case perspective and makes sure that plaintiffs cannot shop for answers by calling different specialists on your team.

7. Engage With Your Legal Team

Too often outside counsel are retained and take over a case. They proceed to develop a strategy for "winning" the case and periodically report their progress toward that goal, usually after major milestones like briefs being filed or opinions issuing.

Unfortunately, "winning" a litigation at all costs is not always a win for the defendant. It is critical to define what winning means for the defendant in each case. Once winning is defined, you should clearly communicate those goals to outside counsel and work closely with them to make sure each strategy, action item and expense in the case is focused on you winning.

I suggest a weekly, at least, update from outside counsel explaining what has been done and outlining what they plan to do next. Scheduled updates allow you to actively manage outside counsel's strategy, review task lists to make sure case strategy remains focused on your goals, and approve or modify plans at a fairly grander level.

These seven straightforward steps will decrease your patent troll litigation costs while increasing the effectiveness of your defense.

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