3 Ways The Pandemic Has Shaped Patent Litigation, So Far

July 07, 2020

July 07, 2020

Law360 (June 10, 2020, 8:25 PM EDT) — Three months of pandemic lockdowns and economic disruption have started making patent attorneys and litigants think in new ways about their cases and how they’re conducted. From embracing videoconferences to reconsidering when to file or settle suits, here’s how patent law looks different now than it did in February.

Rethinking Constant Travel

Stay-at-home orders across the country and the shutdown of most air travel have been the most significant changes for patent lawyers, who spend much of their time on planes. The relatively smooth use of videoconferencing for depositions, hearings and even bench trials has started to make attorneys wonder if remote proceedings will be the norm even after the pandemic ends.

Frank DeCosta of Finnegan Henderson Farabow Garrett & Dunner LLP said that prior to the pandemic, he was on a plane every three or four days, but he hasn’t flown since March and there hasn’t been a detrimental impact on his work.

“Patent lawyers are nomads, essentially,” he said. “We have a federal practice, we’re always traveling district to district, our clients are never local and they’re all over the world.”

Yet the rapid transition to a predominantly virtual practice because of the coronavirus has mostly gone off without a hitch, and “pretty quickly, we learned how to replace physical presence with telepresence,” DeCosta said.

“I’ve been surprised at how much we can get done,” he said. “It’s not a complete substitute for the face-to-face meetings that we had … but the technology really has been a reasonable substitute to keep things moving.”

Depositions and hearings by videoconference have some drawbacks in that it’s more difficult to read body language and visual cues that can shape arguments and to make connections with witnesses or judges. However, they’ve worked well enough that the possibility of using computers to replace some of the many flights, hotel stays, meals and other travel expenses that have long been integral to patent litigation is bound to get a closer look, even after they’re no longer required, Eugene Goryunov of Haynes & Boone LLP said.

“I think that clients are seeing the successes that counsel are having using these electronic means, and they see this as an amazing cost-saving opportunity,” he said.

He said that his first attempt at conducting a deposition by videoconference a few months ago was a “less than thrilling experience,” but it became second nature the more he’s done it. While attorneys and clients will likely prefer for depositions and hearings that are likely to be contentious to be done in person once that’s possible, Goryunov said he can envision a move to electronic proceedings for more run-of-the-mill matters.

He noted that some judges require all counsel to attend scheduling conferences, which can last just an hour and require dozens of lawyers flying in from around the country.

“There’s certainly value to this, but I think all that cost can be avoided,” he said.

While he said Zoom and the like may be used more often for certain routine matters in the future, Steve Auvil of Squire Patton Boggs LLP said he views the technology as a stopgap measure that can’t really substitute for in-person appearances in many cases.

“When you’re presenting witnesses and complicated documents, it’s difficult to do it over videoconference for hours on end,” he said.

Since most people had never participated in a legal proceeding remotely before March, there was a sense that the technology wasn’t very good and would involve disruptive technical glitches, Mike Newton of Alston & Bird LLP said. The crash course everyone has had due to the pandemic has shown that it can be a viable tool and has the potential to eliminate the need for numerous flights, he said.

“I can see people saying, ‘It’s really not worth you getting on a plane and flying from D.C. to San Francisco; it just doesn’t make any sense,’” he said.

New Strategies Emerge

The pandemic and the huge economic hit it has had on many companies has begun changing strategic considerations about whether to file a new patent suit or settle one that’s in progress. When a company’s entire business may be on the ropes, investing money in patent litigation may not seem like the best use of resources.

For potential plaintiffs, “the additional expense of filing a new suit, and also the distraction of a litigation during this pandemic, is something that I think is at least a factor for clients as they consider what they want to do,” John Moehringer of Cadwalader Wickersham & Taft LLP said.

That thinking won’t apply to all companies, of course. For instance, patent licensing companies whose revenue comes largely from enforcing patents won’t stop doing that because of the pandemic, Newton said. And while companies that are struggling economically might prefer to have cash on hand to filing a patent suit, the economic fallout might in some ways work to their advantage.

“You might be in a bad financial situation, but the company you’re thinking about going after may be worse off,” Newton said, using the example of a hotel or airline battered by the pandemic that could be open to settling to avoid litigation.

For companies accused of infringement that are under financial pressure, a settlement might seem like more of an attractive option than it would in normal times.

“I don’t think any clients would necessarily say we need to settle this because of the pandemic,” Moehringer said. “But I do think it affects some of the factors that normally go into the determination about how you look at the next few years of a litigation, because it will be a disturbance for an already stretched corporation.”

While settling a patent case to get it off your plate has some appeal, there is some risk the company could look like it isn’t going to fight back when accused of infringement, and “send the wrong message that now is the time to sue me,” Goryunov said.

“You can’t stop people from suing you, but you don’t want to look like a pushover, either,” he said.

Delays for Jury Trials

While videoconferences have been workable substitutes for many aspects of patent litigation, things that require people to be physically present in a certain location have had to be put off, which may cause cases to be prolonged or delayed going forward.

For instance, some patent cases may involve a visit to a facility belonging to one of the parties to see how an accused product works, or an inspection of a party’s source code in a secure location. Travel restrictions and social distancing might cause indefinite delays in such cases because “that could be impossible to do effectively other than face-to-face,” Auvil said.

The source code issue has come up in a few cases, some in which parties have raised security concerns about sharing important code over unsecure computer networks, and some in which judges have ordered inspections to take place in a secure location with extensive health precautions.

Jury trials have also largely been suspended during the pandemic, and while some judges have been making plans to restart them in the coming months with social distancing procedures in place, patent cases will be a lower priority in many courts as trials get underway again. A patent trial involving Cisco that was scheduled for June in the Northern District of California was recently moved to October. The judge said that if the parties had not been available on that date, it would have had to be held in January, because criminal trials have to take place first.

“That’s an indication of how hard it’s going to be to clear up this backlog of trials that’s building up,” Moehringer said.

While some cases will inevitably have to be pushed back, attorneys said courts have done their best to keep cases moving, and will strive to minimize disruptions going forward.

“Judges are really anxious to get back to whatever normal is as quickly as possible,” DeCosta said, adding that they’re willing to make accommodations to deal with the pandemic, “but the expectation has always been to get as much done as they possibly can and keep moving.”

In some ways, the COVID-19 pandemic is still in its early stages, and attorneys will be closely monitoring its impact on patent litigation in the coming months.

“It’s much like society at large,” Moehringer said. “The return to normal patent litigation is going to take some time, and it might not ever come back to the way it was. It could be forever changed because of the pandemic.”

—Editing by Breda Lund.

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