Insurance and the World at Large
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I am asked on occasion about the topics of this blog and their connection to my practice, more particularly how I ended up focusing the blog on its two primary subjects. For years, my litigation practice has focused primarily on three areas: intellectual property, ERISA and insurance coverage, in no particular order. A joke which I have long used and which always fails to elicit anything more than a pained half-smile is that 50% of my practice is insurance coverage, 50% of my practice is ERISA litigation, and 50% of my practice is intellectual property litigation.
Why did the blog end up focusing on two of those topics - ERISA and insurance coverage - and not the third, intellectual property? Well, one reason is that my experience is that intellectual property cases are heavily fact driven more than they are a product of interesting evolution in case law, limiting the appeal of blogging on them, and another is that, as a very knowledgeable legal blogging guru told me when I started the blog, there were already a lot of - mostly very good - intellectual property focused blogs; all you have to do is take one quick look at William Patry’s copyright blog to see how well tilled that soil already is.
But beyond that, and in contrast, I have found that my other two primary areas of practice, which are the central focuses of this blog (although as the digression section over on the blog topic list on the left hand side of your screen reflects, I do on occasion venture here into intellectual property issues of interest to me), provide a rich vein of endlessly interesting topics and legal developments. ERISA litigation, for instance, is a remarkably and endlessly evolving area of the law, as the courts develop what is in essence a federal common law covering the field, and as the courts deal with new types of retirement plans, plan investments, and increased litigation over both. And the intersection of insurance and the business world is a truly fascinating place to be, as the two come together at every major point in the economy and at every major issue in it as well. Here’s a good story, about the general counsel at Lloyd's of London, that makes that point.
Controlling Costs in Patent Infringement Litigation
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I tried a patent infringement case to a jury last spring, and while I was quite pleased with the outcome, I left the experience very concerned about the tremendous cost of litigating patent infringement cases. Thinking back over the course of the litigation, I was able to identify some central principles for reigning in the costs of such suits, and I now regularly use those ideas in guiding my own recommendations to clients and approaches to litigation in intellectual property cases. New England In-House magazine has now published my article on this topic, titled “Patent Litigation Doesn’t Have to be Prohibitively Expensive,” which details my ideas on controlling the expense of litigating these types of cases. You can find the article right here.
Where Patent Law Stands Today
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On Friday I feel free to deviate from the usual topics of this blog into the topics covered under the digressions category over on the left hand side of the blog. Today being Friday, that’s what I’m going to do, this time returning to an issue I have discussed before, the Supreme Court’s targeting last term of the law governing patent litigation and whether patent reform remains necessary - if it ever was - after the Court’s decisions. SCOTUSBlog has this post about the Michigan Law Review’s on-line companion and its collection of shorter pieces addressing exactly those questions. I have read most of the pieces, and in particular recommend Robert Armitage’s piece on the judiciary’s ability to respond to problems in this field of law without legislative reforms and Professor John Duffy’s piece on the impact of the Court’s treatment of the obviousness standard.
It’s a terrific collection, done just the way legal scholarship should be done to have relevance to the practicing bar and not just to other academics. Short, readable, accessible, and thought provoking. Exactly what I have argued before law reviews and law faculty must provide if they are to influence the development of the law, rather than just the heft of law reviews.
Is This The End For Patenting ERISA Strategies?
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I have talked before - probably too much - on this blog about patents, patent reform, and the fact that the courts are in the process, as far as I am concerned, of reigning in what some see as abuse in the patent system and in patent infringement litigation against large technology and other companies. Of particular note, I have written before about the particular question of whether ERISA strategies should be subject to patent, and, as I discussed in a BNA article on the subject, I don’t run with those who think business method patents should be pushed that far. The Wall Street Journal law blog has an interesting post today that touches on all of this, in particular on a new appellate decision concerning business method patents that may well drive the final nail in the coffin on the idea of patenting ERISA strategies. As that blog puts it: “Legal experts say the court’s ruling . . .may make it more difficult to obtain and enforce business-method patents, which are granted for abstract processes rather than specific devices. . . .The decision suggests that business-method patents will now be considered invalid unless the invention has a practical application and can be linked to a particular technology, such as a computer. The court said that ‘mental processes—or processes of human thinking—standing alone aren’t patentable even if they have practical application.’" Seems to me that ERISA strategies fall exactly within that category of unpatentable mental processes. In fact, frankly, if you read the opinion itself, it is pretty doggone clear that ERISA strategy patents, as distinct from patents involving computer processes for managing ERISA claims for example, should never have been granted, and won’t be in the future.
But I Digress: Robert Plotkin on Patent Applications and Changes at the PTO
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Ever mystified by what goes on inside that black box with the colorful flat screen on top that sits on your desk at work? Me too, and when I am I check in with my colleague Robert Plotkin, a patent prosecutor who specializes in computer patents. Robert is a fine source of expertise on patent law and computer technology, and I thought I would pass along this link to his patent tip for August 07, which discusses changes at the Patent and Trademark Office concerning continuation applications. As Robert points out in his publication, the rule change will alter patent applications in a manner that may increase their expense, but do not go into effect until November, creating a short window that patent applicants should try to exploit before the effective date of these changes. And as Robert doesn’t point out in his note on the subject, but did mention to me - given that I litigate patent infringement actions but don’t prosecute patents - the shakeout from the rule change is likely to affect litigation over patents as well, as we move down the road and past the implementation date of these changes.
And aside from my professional interest in patent litigation, how does this relate back to the primary subject matters of this blog? Well, we might point out that business strategy patenting has caused ERISA law to crash head long into patent law, as discussed in this BNA article that I am quoted in.
Patent Infringement Cases Never Go To Trial, Yet Somehow Cost Billions of Dollars
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Having recently tried a patent infringement case to a jury, I was amused by this article in IP Law & Business pointing out that patent cases are almost never tried and few patent lawyers have actually tried a case to a jury. The key statistic is here, in this line in the article: “there were only 102 jury trials about patent disputes in 2006, out of 2,830 such cases filed, according to the Administrative Office of the U.S. Courts.” I had a lot of fun trying the case, and am circulating an article for publication based on lessons learned from it, but given these numbers, I can only wonder how soon it will be before I get another one past the hurdles of settlement and summary judgment, and into trial.
On a more substantive note, this article here recounts the research of James Bessen, a lecturer at Boston University Law School, who has found that the costs of patent infringement litigation actually exceed the economic value across all industries of patenting inventions. That’s a lot of legal fees, for a field of litigation that almost never gives rise to a trial. More interestingly, Bessen has gathered statistics suggesting that for many industries and many business people, pursuing patents may not be a profitable, or even useful, business strategy. His data points towards something we already know, which is that for those industries, such as the pharmaceutical industry, where holding exclusive rights on a product is crucial, the patent system drives both innovation and large profits, but that for decision makers in other industries, seeking a patent may not always be the best way to proceed with regard to a given product. Certainly though, for the individual inventor, it is probably the necessary first step to ever being able to successfully maintain marketplace control and exploitation of an invention, no matter if, across the economic universe as a whole, businesses may spend more money litigating patent disputes than they earn off of patents.
The Case for More Patent Infringement Litigation
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Well, not really. More like an argument for a little healthy skepticism when it comes to the subject of patent reform, which as pitched on blogs, in the popular media and elsewhere, really consists of proposals directed at two themes: reducing or at least discouraging the filing of patent infringement lawsuits, and restricting the ability to patent things that are not really advances at all. Now I am all for efforts to tighten the standards for patenting supposedly new discoveries, to more effectively limit patents to developments that are really innovative and not obvious, and anyone who has read my comments in this BNA article here knows I am a bit of a skeptic when it comes to the idea of broadly allowing patenting of business methods or other supposed advances that, frankly, just may not be all that unique or imaginative. And to some extent, we are already seeing a judicial response to this problem, as we see in the Supreme Court’s KSR ruling that makes it harder to maintain patents that do not reflect real innovation and advances in a particular art.
And I don’t necessarily even have a problem with pitches being made by the wealthier part of the tech industries that the patent laws be shifted to protect them against suits by inventors, or licensees, who do not manufacture but are instead simply holders of patents allegedly infringed upon by the manufacturers, such as argued for in this post here by the general counsel of Sun, although I think there should be a high bar for triggering such protections, namely proof, first, of real diligence by the alleged infringer in determining prior to manufacture whether there may be patents out there covering some aspect of the manufactured product and, second, of legitimate efforts by the manufacturer to license any such patents at fair market value.
But what we should be skeptical about is allowing some legitimate ideas for improving the patent system to be used as cover, almost as a Trojan horse, for what may well be a less legitimate goal of simply protecting large companies from smaller companies and even from lone inventors, which is what many people fear they are really hearing when someone with a vested interest in reducing patent infringement claims uses the term patent reform, and we should be very cautious when it comes to changes that reduce the incentives for the little guy or woman, even the lone tinkerer in a garage, to invent something. And the reason for this is right here, in this article about amateur inventors coming close to or bettering the best work of NASA and the large industrial companies that supply it.
Worried about jobs going overseas, about engineering and drug manufacturing going to India, about products being manufactured in China? The best defense against those events impoverishing the American economy is the kind of invention and developments of new products and ideas that the patent system encourages, and of the kind that is reflected in this article.
At the Crossroads of Trade Dress Infringement, Restaurants and Insurance Coverage
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There is a very interesting and entertaining article - if you like law, food, restaurants, intellectual property, or any combination of them - in the New York Times this morning, about a seafood restaurant suing a newer, competing restaurant for, basically, replicating - allegedly, as the two restaurants don’t look all that much alike to me in the limited pictures that ran with the article - the older restaurant’s menu and look.
Although the article pitches the issue and the lawsuit as new, I actually participated in litigation of the exact same case, for all intents and purposes, some fifteen or so years ago, involving two Boston area seafood restaurants, and whether the newer one had committed trade dress infringement. The end result? The newer one was really, right down to the style of its menu and pretty much everything else you can think of, cloning the older restaurant, and I know from personal experience that the public was actually confused about whether the new restaurant was affiliated with the older one, because prior to the lawsuit I had always assumed they were affiliated. The newer restaurant settled by agreeing to a number of changes that would clearly differentiate the two restaurants, and both restaurants remain thriving, expanding businesses almost two decades later, an amazing thing given the short shelf life of most restaurants.
And beyond the curiosity factor of the case described in the article, we can actually bring this story back around to the title subjects of this blog, by noting that, in that case years ago, the newer restaurant later litigated with its insurer whether there was insurance coverage for that lawsuit and its costs of retrofitting the restaurant to distinguish it from the other restaurant as part of the settlement. The restaurant lost the suit, not because the policy did not cover it, but because the restaurant defended and settled the case brought against it by the older restaurant before even notifying its insurer about the loss. Under the state of the law in this jurisdiction at that time, the restaurant was found to have forfeited coverage under its policy because its actions breached the notice and no voluntary payments clauses of the policy to the prejudice of the insurer (the outcome of that coverage litigation might arguably be different today under current law in Massachusetts, or at a minimum, the restaurant would have stronger arguments for coverage today despite these facts then it did then). And why did the restaurant delay? Because it didn’t know there might be coverage under its policy for the claim, or just assumed there would not be, illustrating the first rule of being a policyholder: always, always notify your insurer whenever a claim arises, and let the insurer figure out whether or not there is coverage for the claim rather than making your own guess.
Patenting Tax and ERISA Strategies
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There’s a hot topic of discussion out there all of a sudden - I think originally triggered by this post a few weeks back by Suzanne Wynn - concerning whether ERISA strategies should be able to be patented. The discussion, thanks to a detailed look at the issue in this week’s issue of the BNA Pension and Benefits Reporter, has finally reached the point where there is now more light than heat on the subject. I am quoted extensively in the BNA article, which is A WARNING TO ERISA PRACTITIONERS: YOUR BENEFIT PLAN STRATEGIES MAY BE PATENTED, 34 Pens. & Benefits Rep. (BNA) 1329. As per my usual practice of deeming it fair use for purposes of the copyright laws to quote verbatim sections of articles that quote me, here is what I had to say on the question of whether these types of strategies should be covered by the patent regime:
Stephen Rosenberg, a partner with The McCormack Firm LLC, Boston, told BNA in an e-mail May 20 that he is "not a big fan" of business method and similar patents, such as for tax strategies, because these patents "aren't really advancing technology and the like in the scientific or mechanical arts." Rosenberg is a commercial litigator who specializes in litigating ERISA and intellectual property cases.
"With regard to patenting ERISA ideas and methods in particular, I believe you are moving out of patenting innovation and really simply into the realm of what is, in essence, simply the professional knowledge and expertise of the practitioner," Rosenberg told BNA. He added that he did not believe that the counseling of a lawyer or other professional service provider, who is simply applying his or her learned expertise in a particular field of training, should fall within the patent regime. Rosenberg said he believes that advances in professional knowledge of ERISA "should belong to the profession as a whole, as part of the advancement of knowledge in that field."
Rosenberg said that the real purpose of a patent is to provide protection to those who have invested resources into inventing something and who, without patent protection to allow them to exploit the invention, would not profit from it sufficiently to warrant the investment. "I am hard pressed to believe that a professional in the ERISA community who comes up with a new idea for how to attack an ERISA strategy problem won't go forward without [the protection of a patent]; instead, they will sell it to the client, with the expectation the client will be impressed enough to keep returning for more professional services and will recommend that provider to others," Rosenberg said in the e-mail.
In addition, Rosenberg said he believes that patents should not be granted to advances that would be obvious to others who are skilled in the particular field. "I am highly skeptical that a new ERISA strategy is likely to be so beyond what other practitioners, presented with the same problem by clients, would have come up with that it would justify placing exclusivity in the hands of the first to seek a patent for it," Rosenberg added.
I guess you can tell from my comments that I think it is pushing business method patenting a little too far, and in a direction that is simply not beneficial to clients, the profession or the public.
This whole question of how far patent protection should be allowed to extend echoes as well in what the WSJ Law Blog is calling the Patent Reform Battle Royale among the real big spenders, Cisco and Goldman Sachs and big pharma, and in the alleged patent troll problem complained about by Sun’s general counsel on his blog. Weighing in on what they have to say and how it fits in with the questions posed in the BNA article would take a lot more words than I have time to type today, but their posts on the issue are worth taking the time to read; you can then draw your own conclusions as to whether their complaints about the patent system likewise support precluding the patenting of ERISA strategies. If you would like a little more substance on the patent reforms at issue, you can find it here and here.
KSR, Patent Infringement and Obviousness
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I don’t know how many people with an interest in ERISA litigation share my interest as well in patent and other intellectual property litigation, although I know from experience that I am not the only lawyer who practices in both areas. Either way, for anyone who has been following the issue of the Supreme Court’s recent decision in KSR on the standards for proving that an invention was too obvious to be patented, this article here is as good an overview of the topic as I have come across. Its everything you need to know in a readable nutshell, which is not an easy trick when you are starting out with a complex subject that is founded on decades of jurisprudence on a particular issue.
And to tie the discussion back in more closely to the ostensible subject matter of this blog, here is Suzanne Wynn’s recent post pointing out the possibility of patenting particular approaches to solving ERISA problems; for those of you, who like me, might find the possibility of this occurring troubling, the new rules on proving obviousness might go far to precluding the patenting of such solutions to common problems in the ERISA field.
Patent Infringement Trial
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Today’s post is sort of a place holder, in a way. My associate Eric Brodie, who is my crack science guy, and I are starting a patent infringement trial this morning in federal court that is expected to last two or three weeks. As a result, I don’t know how much I will be posting for the next couple weeks, although I will try to post here and there, when I have a chance, and will certainly make a point to at least put up short posts drawing attention to new decisions that are handed down while I am on trial or to particularly interesting blog posts or articles published during that time; the posts will undoubtedly lack much discussion by me about those decisions and publications, although, if they merit it, I will return to them to provide comments in a couple of weeks, when I have more time.
Blog vendor Kevin O’Keefe at LexBlog likes to suggest that lawyers blog during the downtime in trials, and comment on what is going on at court, in the interest of showing - in his words - that you not only talk the talk, but also walk the walk. I don’t know whether I will do that during this trial, partly because I am not all that comfortable with blogging about an ongoing court proceeding in which I am involved; I am not sure I feel that it fits my obligations to either the client or to the court, but, if there is something interesting to comment on involving something other than the case I am actually trying, I might put something up from court, maybe over the midmorning break. We’ll have to see on that.
Architects and Copyrights - Who Holds the Rights in the Design of a Building?
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I have a confession to make: I like houses. I remember an old Arlo and Janis cartoon, in which they respond to a bad day by pulling out the plans for their dream home, which they know they will never build, and add another elaborate room to it: that’s me. And so I greatly enjoy this blog about a couple’s attempts to build their dream home. Now normally, this would not be grist for this blog, for obvious reasons, but for one thing - in a post yesterday, they mirrored reality for me, touching on issues in a case I greatly enjoyed litigating recently, which was a dispute over the right to use plans drawn up by an architect who was subsequently terminated from the project. Given my interest in architecture and copyright law, this case was an absolute ball from where I sit. And in this blog post, the authors are astounded when they learn that the contract forwarded to them by their architect was, first, one sided in that it protected the architect but not the party retaining the architect, and, two, made the plans the property of the architect, even though the authors were paying for them. Their shock falls right in line with what I have always thought of as the three take aways from that recent case I handled. First, that the standard architecture contract, drafted by the architects’ trade group, is completely one sided, was drafted that way intentionally, and should never simply be signed off on, without changes, by anyone retaining an architect to design property for them. Two, that the most egregious part of that standard contract is that it gives all rights in the design of the building to the party designing it, the architect, rather than the person who should hold it, the one paying for that design. And three, that the consumers of the services, unless represented by counsel, don’t know any of this, would be shocked if they did, normally just sign on the bottom line to get the project started, and never learn this unless and until something goes wrong with the project. That standard contract should never be signed off on as is, without changes made to some of these more one sided terms. And at the end of the day, for purposes of this post, it is simply fun to find these truths documented by this couple’s experience, discussed in their blog.
Animators at Law and Sophisticated Trial Graphics
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I recently had a fun virtual meeting, by conference call and downloads, with Animators at Law, who produce 2D and 3D trial graphics, and in particular with Christine McCarey, a former in-house counsel and now the company’s national director of business development. I have been at this long enough to remember when trial graphics were big glorified poster boards or, worse yet, were projected by what appeared to be simply updated versions of the overhead projectors that jurors, typically recoiling in fright, remembered with horror from junior high school.
Well, that was then and this is now. Christine, tracking my professional interests, showed off some great pieces of work from a range of intellectual property and insurance coverage cases that were both imaginative and informative; in this visual age, they are the kind of things that a jury will actually note and remember. I particularly liked two examples, the first a graphic from a trade dress infringement trial that showed the defendant’s product literally morphing over time from its original design into a design that perfectly mimicked the plaintiff’s product (for those of you who don’t do this kind of work and wouldn’t know trade dress infringement from a cocktail dress, that kind of a match puts the defendant in the position of having to rely on technical legal defenses, while letting the plaintiff reinforce in the jury’s mind that, hey, the competing products look too much the same for this to be legal).
The second example that I really liked was a series of exhibits from an environmental insurance coverage case. What I liked best about them was that they took what is in essence a dry textual issue - what does insurance contract language mean and how does it apply to these facts - and transformed it into something visual and catchy. That’s no mean feet, and it’s a long way from those bar graphs showing layers of excess policies that passed for exhibits in insurance coverage cases lo these many years ago.
Fun stuff, and if you have an interest in state of the art trial graphics, you could certainly do worse than talk with Christine.
Law Reviews Are Dead, They Just Don't Know It Yet
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Kevin O’Keefe, the trial lawyer turned legal blogging evangelist who runs LexBlog, the company that provides the technical support - but not any of the copy - for this blog and for the many other blogs listed on the lower left hand corner of this page, has been running a series of posts on the question of the impact of legal blogs on law reviews. I have my own thoughts, based on years of practice and my own stint on a review’s editorial board, on the question of what the growth of legal blogging means for the future of these august but hide bound publications. Now I try to stay away from blogging about blogging - in fact I think I have managed to blog for many months now without ever discussing the subject in a post - because I think it’s essentially navel gazing and it has nothing to do with the reason why people come to this blog, which - I hope not naively - I assume to be to learn about ERISA, intellectual property litigation and the law of insurance coverage. But I couldn’t let the subject raised by Kevin (who, by the way, has no compulsion against blogging about the topic of blogging because, well, that is what his blog is about - blogging) pass without commenting on it from the standpoint of a practicing litigator who focuses on the areas discussed in this blog.
When I came across Kevin’s posts on this topic, the old song lyric that video killed the radio star immediately started sounding in my ears, and no, I wasn’t listening to my ipod at the time. Law blogging is in the early stages of making detailed legal analysis on specific subject areas available to the entire legal community in ways that are both searchable and far more practical and useful than anything that law reviews generally provide. There is little doubt in my mind that practicing lawyers can find far more useful information about specific issues in insurance coverage, for instance, from David Rossmiller’s blog, or on the law of ERISA from Roy Harmon’s blog, or on intellectual property issues from Patently O, and so on and on, then they will ever locate in the published law reviews.
And why is this? There are multiple reasons. First, at the risk of being too negative, law reviews have, over the years, essentially become echo chambers for law faculty to talk to one another or, worse yet, have simply become a place for law professors to publish esoteric work that is absent significance to practicing lawyers or the courts simply because they feel they need to do so if they are to pursue tenure. This is hardly a novel criticism, as I can remember a federal judge - I forget who it was, but he was out of the industrial mid-west - pointing out years ago that published legal scholarship had no merit or relevance to what he did every day. Law blogs are obviously different; the point is to publish useful legal information at a level of legal sophistication sufficient to be relevant to the practicing community, the courts and clients. That is an entirely different audience than the one that law reviews are targeted at, and an entirely different type of information that is intended to be transmitted.
In fact, when I was in law school, a particular near octogenarian law professor, rumored to have been during his earlier days at Harvard the model for Professor Kingsfield in the book and movie The Paper Chase, spoke once about how, many years ago, the writing of treatises that were of practical use to the profession was considered a worthy output for a law professor, but how that was no longer the case. Instead, esoteric topics, the more so the better, were what advanced a career in legal scholarship.
Second, blogs are searchable in a matter of moments. Run a search for ERISA, for instance, over at Google Blog Search, and see how quickly you can find information about the differing approaches to the standard of review in ERISA cases when the administrator is operating under a conflict of interest, a favorite topic of this blog. Then compare that to how quickly you can actually find law review articles on this subject, with the exception of those pieces commented on and linked to in blog posts. I know that those articles are out there, because I have read many of them, but you won’t find them quickly, or without doing traditional types of legal research to locate them.
Third, law reviews have divorced themselves from the practicing lawyer, in multiple ways, only one of which I will comment on here, so as to avoid turning this blog post into, well, the length of a law review article. They make publication too time consuming for many successful lawyers to consider pursuing, thereby limiting the pool of potential author/experts - perhaps intentionally? - to law faculty. I have on my own hard drive, for instance, a nearly finished law review article covering the law of trade dress infringement in the First Circuit that grew out of a summary judgment memorandum in a trade dress infringement case I was litigating. The substance is all there, but finding the time to fix the cites, and dress up some of the transitions, and dot each I and cross each T? Almost impossible, unless I am going to assign it to an associate, which somehow strikes me as cheating. But what I may well do is finish it up to a nearly finished draft status, and put it up on this blog, and just plain bypass the time consuming law review publication system, while still putting the information easily in the hands of those who may have use for it. Blogs make all of this type of information far more readily available to the community than law reviews do or, frankly ever will, unless and until they not only add accompanying blogs but also make all of their text freely available for on-line searching.
So yes, whether you practice in ERISA, insurance coverage, intellectual property, or any of an endless variety of other practice areas, legal blogs are far and away the best source of information, and they are turning law reviews into dinosaurs. The whole subject reminds me of some discussions in Seth Godin’s book small is the new big that can essentially be summed up as, in the age of the internet, businesses can either change or die. As far as I am concerned, that is where law reviews find themselves right now: they can either figure out how to transform themselves into an easily accessible on-line repository of valued information, or they can continue to be marginalized, only at ever increasing speed, into a place where law professors simply go to impress one another.
Intellectual Property, Advertising Injury Coverages, and Licensing
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At the risk of turning this into blog reader month, I thought today I would pass along this article on the use of intellectual property in growing a business that was passed along to me by blog reader Mike Kraft of Customer Standpoint, who specialize in the analysis of the customer experience. It may not be entirely on point for this blog, but for those of you who may come here looking for information on advertising injury coverages, which, as I have discussed before, can cover some intellectual property claims against insureds, it is a good overview of how any business, including insured companies, put intellectual property assets to use.
Moreover, you can see in the article the range of activities - beyond just inventing technology, which is the popular image of intellectual property development - that businesses engage in involving their intellectual property assets and, if you think about it, you can spot all the different possible points of liability exposure in those actions. Advertising injury coverage can insulate a company against liability on at least some of those fronts, and the question for lawyers and brokers who represent insureds who engage in these types of activities is how to structure an insurance program that protects against all the other liabilities as well.
Insurance Coverage Trial Exhibits
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I added a new category today, Insurance Coverage Trials, as a place to collect useful tips, ideas and articles on trying insurance coverage cases that might be useful to readers of this blog who either try such cases or hire (and thereafter manage) lawyers who try such cases. What prompted this idea was a long and very comprehensive pretrial conference in a patent infringement action I am litigating, during which I got to thinking about trial graphics and other fancy doodads and geegaws to submit to the jury; this in turn reminded me of Marc Mayerson's terrific, near scholarly recent piece about designing and admitting into evidence trial graphics in insurance coverage litigation. Marc talks in detail about best practices in designing these types of trial aids, and about the rules for getting them before the jury. What I like best though, I think, is that his post is really focused on design issues, and about what types of graphics best communicate information to a jury.
Readers of other posts of mine, like this one here, know I have a layperson's interest in design (the very thing which got me interested in intellectual property litigation and rights in the first place), so it is fun for me to see a lawyer address from a somewhat different direction, namely that of graphic design, a subject - trial graphics and exhibits - that litigators normally don't consider from that perspective.
Patent Infringement, Copyright Infringement, and the Costs of Doing Business
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In addition to litigating ERISA and insurance coverage cases, I have maintained a pretty active intellectual property litigation practice for a number of years. Routinely, when I meet with business people to discuss intellectual property problems, the subject of the expense of protecting intellectual property rights and how to control legal costs in doing so comes up. This is especially the case when I talk with entrepreneurs and people at small start ups who feel that the intellectual property at the heart of their business plans has been misappropriated by someone else - often a more established competitor - but don't think they can afford to do anything about it given the high hourly rates often charged by lawyers.
Now I have written before about better ways to fund insurance coverage litigation than simply paying counsel by the hour, and when it comes to protecting intellectual property, I tell these people the same thing, that they should not let the billable hour model frighten them off from protecting their intellectual property and vindicating their rights. There are, or should be if the lawyers they are talking to are willing to put a little skin of their own in the game, other ways to pay counsel, that are more economically feasible for businesses that don't already have the deepest pockets in the world, but hope to some day, than paying lawyers by the hour to prosecute a patent or copyright infringement action.
And this article here presents those options quite nicely, although in more words than I use when I discuss the same topics with business folk.
Coverage for Copyright Infringement and Why You Should Buy It
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In a recent posting I discussed the value to insureds of purchasing an endorsement adding advertising injury coverage to their commercial liability policies when they acquire or renew them because it can grant coverage of at least defense costs in some intellectual property cases, at a minimum copyright infringement claims; this is discussed at http://www.bostonerisalaw.com/archives/cat-advertising-injury.html.
It is most valuable to smaller businesses who cannot carry the tens and hundreds of thousands of dollars that it can take to litigate even the most reasonably sized copyright infringement dispute. Bruce MacEwan, on his blog Adam Smith, Esq, http://www.adamsmithesq.com/blog/, wrote a series of postings recently concerning copyright infringement claims being threatened against him by a major media company for information posted on his website. Of interest to me is one in which he describes being advised that
One motivation for doing this is the remark of an IP practitioner and friend who, unsolicited, volunteered the opinion that "There are entire in-house law departments devoted to sending out legally unjustified cease and desist letters." And the truly bad news is not that dismaying commentary on the paucity of ethics, but his additional observation that far more than half the time, threats work.http://www.bmacewen.com/blog/archives/2006/05/copyright_law_fair_use_an_1.html#more
We can presume that most of the times that this threat works it is because the recipient cannot afford to defend itself against a copyright infringement lawsuit, or at least the calculus is that the profits from the allegedly - but possibly not - infringing activity is less than the cost of defending against that claim. Being insured against such a claim, and knowing that at a minimum the insurer will provide a defense against the copyright infringement lawsuit that will be filed if the cease and desist letter is not complied with, changes the calculus immeasurably. Suddenly, the only real issue for the recipient is whether it is, in fact, infringing on someone else's copyright, not whether it is too expensive to litigate the question and find out.
Once again, insurance to the rescue. More importantly, once again, companies and their counsel simply should not overlook the value of paying a little more for add ons, such as advertising injury coverage, that are typically available.
Insuring and Litigating Design Disputes
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What does design, and more particularly the rise of design in modern industrial China, have to do with ERISA and insurance? Little, something and nothing.
A little, because business liability policies often contain advertising injury coverage, which can provide coverage for copyright infringement claims in certain circumstances. You can read my very out of date article on advertising injury coverage - from 1992 - here: Download file. Of note for present purposes, reflecting my lawyerly obsession with footnotes, is footnote one, which details the causes of action covered under advertising injury coverage endorsements.
Something, because one of the areas in which I practice extensively is defending insureds against intellectual property lawsuits in cases where the advertising injury coverage is triggered and the insurer will cover the claim. It is worth noting that this coverage can lead to insurers at least paying for the defense of many types of intellectual property claims, not just copyright infringement actions. I have handled cases in which everything from patent infringement to trade dress infringement actions have been defended by insurers. This comes about because the lawsuits also include a claim for copyright infringement, and the copyright infringement claim triggers the advertising injury coverage, resulting in the insurer having an obligation to defend the insured against the lawsuit. In most jurisdictions an insurer, if it must provide a defense against one count in a lawsuit must also provide a defense against the other counts in the lawsuit (with variations and exceptions not relevant to this discussion, but which can be very important to the particular insured defendant in a particular case). As a result, the other claims made in a copyright infringement lawsuit, such as claims for patent infringement or trademark infringement that are often "bundled" in a lawsuit with a copyright infringement claim, also end up being defended by the insurer. See the following link, which includes an example of a "bundled" case of this nature in which I defended a party charged with patent infringement, trade dress infringement and copyright infringement: http://www.mccormackfirm.com/new.html.
And finally nothing, because the relationship has as much as anything to do with my personal and professional interest in design, and how you protect it. I cannot read an article on architecture, industrial or other design in any setting without immediately thinking about how ownership of it can be protected. There is a fascinating article in today's New York Times on the rise of, for lack of a better term, a commercial design economy in China, that highlights several designers and architects, and their recent work. The article highlights the interplay between traditional Chinese forms and materials, and the country's newest designs and designers. http://www.nytimes.com/2006/04/20/garden/20china.html?_r=1&oref=slogin. In reading it, I immediately jump to the questions of what parts of it can be protected, which owners/designers can limit the rights of others to replicate it, and how that can be done. Issues ranging from claiming trade dress protection in the products, to an architect's copyright in a building design come immediately into play. It fit with a case I am handling, in which the question of the extent of an architect's ownership of and copyright in his design of a building was at issue. You can find a one paragraph discussion about that case here: http://www.mccormackfirm.com/new.html.