The first three articles in this series discussed strategies for choosing the individuals, firms, and vendors that will work on an IP litigation matter, strategies for laying the groundwork in early stages of the litigation so that costs are controlled in later stages, and strategies for reducing costs through case scheduling and during discovery. This article explores ways to limit costs through strategic motions that may limit the overall scope of the litigation.
Weigh the costs and potential benefits of filing dispositive motions
Litigants have certain motions at their disposal that may dispose of the opposing party’s case entirely, or result in dismissal of one or more of the opposing party’s claims. Motions to dismiss, for instance, are typically raised to rid the case of one or more counts where the facts alleged in the plaintiff’s complaint or the defendant’s answer cannot satisfy the legal elements of an asserted claim or defense.
Relatively recent court decisions raising the federal pleading standards have increased parties’ reliance on motions to dismiss. As one example, when patentees assert a claim of indirect infringement (as opposed or in addition to direct infringement), they must plead sufficient facts for a court to infer that the defendant had the requisite knowledge and intent to induce or contribute to the alleged direct infringement. If such facts are lacking or thinly pleaded, the accused infringer may move to dismiss the indirect infringement claims. The sufficiency of other claims and defenses, such as inequitable conduct, antitrust or ancillary state law claims, are also commonly challenged.
A motion for summary judgment is another potential arrow in a litigant’s quiver. These motions are usually brought at the end of discovery but can nevertheless save a party from the uncertainty and cost of taking an issue to trial. The movant must show that there is no genuine dispute as to the material facts, and that the movant is entitled to a judgment as a matter of law. In copyright cases, for example, a motion for summary judgment may be appropriate where copying is not in dispute (i.e., in a case that turns on the issue of substantial similarity). In patent cases, such motions are typical for issues such as inequitable conduct, willful infringement, pre-suit damages, and lost profits, as well as non-infringement and/or invalidity — which accused infringers often assert in an attempt to defeat the patent owner's claims in their entirety, or at a minimum reduce the number of patents, claims or accused products at issue.
When considering the use of dispositive motions, however, it is important to make sure the potential benefits outweigh the costs. In ruling on motions to dismiss, courts often will allow a party leave to amend its pleading and re-file the complaint or answer to add allegations that will satisfy the missing elements of the claims or defenses. This sometimes has the added downsides to the defendant of prematurely educating the plaintiff as to possible weaknesses in its case and enabling the plaintiff to rectify those problems as the case proceeds through discovery. With regard to summary judgment motions, the briefing involves compiling all the evidence on an issue, so the costs of pursuing such a motion can be high. Nevertheless, seeking summary judgment may be worthwhile if the likelihood of success is good because the costs of preparing and presenting counsel, witnesses and evidence at trial on the issue will likely be even higher. In addition, a strong summary judgment motion may be the impetus for a reasonable settlement.
Consider motions that may limit the scope of trial
Other ways to conserve overall costs by engaging the adversary include pursuing motions, such as a motion for bifurcation or a motion in limine that may remove issues from consideration at trial. Bifurcation may be appropriate if a determination on one issue might eliminate the need to try another complicated, expensive or time-consuming issue. For example, litigants commonly seek to separate the issue of liability from damages. In patent cases, issues of willful infringement, equitable defenses, and antitrust claims are also candidates for bifurcation. Bifurcating willfulness simplifies the case by postponing and perhaps avoiding discovery into matters normally protected by attorney-client privilege (e.g., pre-litigation advice about the validity of the asserted patent). Bifurcating damages may avoid costly discovery and delay any trial relating to the relevant market, market share, prior licenses, defendant’s finances, costs of production, overhead, and other expenses.
Motions in limine seek to prevent the opposing party from introducing irrelevant and/or unfairly prejudicial evidence and thus can narrow the disputed issues for the judge or jury by excluding certain categories of evidence relating to liability or damages. As a result, these motions can shorten the trial and thereby save costs. Examples include motions to exclude evidence concerning settlement negotiations, willful infringement, the doctrine of equivalents in patent cases, or portions of expert testimony.
Seek to conduct claim construction early (patent cases)
Claim construction determines the scope of the asserted patent claims. Thus, infringement and most invalidity issues depend upon the claim constructions adopted by the court. A ruling one way or the other may foreclose or guarantee infringement or invalidity. As a result, claim construction often facilitates settlement. Therefore, although less of an “engaging” tactic, seeking to schedule claim construction early can result in substantial fee and costs savings. In courts that do not have local patent rules or that have generic scheduling orders, claim construction could potentially take place at any point of the litigation: prior to discovery, after motions for summary judgment, or even following the close of evidence at trial. Moreover, scheduling claim construction prior to the exchange of expert reports eliminates the need for experts to address both sides’ proposed constructions in their validity and infringement reports or during their depositions. This tactic can save significant costs. Parties can also proceed through the remainder of the case by tailoring discovery and arguments in view of the court’s adopted claim construction, which may for instance narrow the scope of relevant prior art. Knowing how the court is interpreting the claims gives the parties a clear understanding of what the claim terms mean and reduces the expense and complexity of the entire case.
As set forth above, parties to an IP case should consider the various motions and tactics for efficiently engaging the adversary and for simplifying the issues in the litigation.