Multiple Defendant Patent Infringement Cases: Complexities, Complications and Advantages Brian M. Buroker, Esq. Hunton & Williams LLP 1900 K Street, N.W., Washington, DC 20006 (202) 955-1894 bburoker@hunton.com Maya M. Eckstein, Esq. 951 East Byrd Street Richmond, Virginia 23219 (804) 788-8788 meckstein@hunton.com   www.hunton.com   9/18/2018

INTRODUCTION Multi-defendant patent infringement suits are the norm. Plaintiffs file them because: reduce costs let plaintiffs pursue multiple licensees simultaneously increase settlement pressures 9/18/2018

Introduction (con’t) Make cases more complex Especially if defendants are competitors Increase in defendants exponentially increases logistical issues Increase complexities Can complicate defense Can also bestow advantages. 9/18/2018

COMPLEXITIES Protective Orders Difficult to negotiate when defendants are competitors. Standard POs don’t address multi-defendant issues. Competing defendants less concerned about the plaintiff than about the other defendants. Especially so if the plaintiff is a non-competing patent holding company. 9/18/2018

COMPLEXITIES -- POs Should co-defendants’ access confidential information? Concerns require multi-layered POs Each confidentiality level defines what type of information can be reviewed by what types of people. Example: In-house counsel/personnel can access Confidential documents, but not AEO documents. Example: Only in-house counsel, not business executives, can access confidential documents. 9/18/2018

COMPLEXITIES – POs Should PO include patent prosecution bar? In-house lawyers who draft patent applications and have access to competing defendant’s confidential information could unknowingly use that information in preparing patent applications. Competing defendant could acquire patents to later assert against co-defendant. Merits of this view are debatable, but courts recognize it as a concern. 9/18/2018

COMPLEXITIES -- POs Patent Prosecution Bars Patent prosecution bars preclude participation in patent prosecution for those with access to confidential information. Questions arise regarding scope and length. Example: in-house patent attorney working for large software company. 9/18/2018

COMPLEXITIES -- POs Should source code escrow be used? Crown jewels Serious financial damage if gets in wrong hands. Risk increases with number of people who may have access: Lawyers Paralegals Professional Assistants Copy Vendors Trial Strategy Vendors Experts and Assistants Court Risk especially increases when competing defendants have access. 9/18/2018

COMPLEXITIES -- POs Source Code Escrow PO defines access rules for escrow agent. Defendants deposit source code with escrow agent. Approved individuals can view source code at escrow facility Under escrow agent’s watchful eye. Copying prohibited/restricted. Information may not leave facility. Agent maintains log of visitors. 9/18/2018

COMPLEXITIES – JDAs Joint Defense Agreements Extremely common. More complex in multi-defendant cases. Joint defense privilege precludes disclosure of shared information among parties with common interest. 9/18/2018

COMPLEXITIES – JDAs Joint Defense Agreements Issues on which to assert common defense Invalidity Unenforceability Lack of ownership Must define common issues Enforceable only as to communications related to common issues Cost Sharing: prior art searches, preparing/taking depositions of inventor(s) and plaintiff’s witnesses, briefing various issues 9/18/2018

COMPLEXITIES – JDAs Joint Defense Agreements Issues to address: What if disagreements arise in areas of common interests? What if one defendant settles? What if shared activity greatly benefits one defendant over others? Who can obligate defendants to payment? Advance agreements prevent disputes. 9/18/2018

COMPLEXITIES – JDAs Prior Art Prior art search often lengthy and costly. Multi-defendants increase resources/reduce costs. But defendant who locates prior art can use it strategically, i.e. to negotiate better settlement. JDA should specify prior art obligations amongst defendants. 9/18/2018

COMPLEXITIES – Time How many lawyers does it take to screw in a light bulb? Meetings Hearings Depositions Briefing Joint Experts Added “noise”. 9/18/2018

COMPLICATIONS -- Differences Not all issues are common Various non-infringement issues Various defenses Various damages issues 9/18/2018

COMPLICATIONS -- Differences Markman Issues Differences in defendants’ products. Results in need to emphasize different claim terms. Single Markman brief required. Hearings similarly limited. 9/18/2018

COMPLICATIONS -- Differences Discovery Issues Courts limit: Interrogatories Total deposition time Total length of inventor depositions Total length of expert depositions Restricts each defendant’s ability to pursue discovery. Defendants must prioritize issues and convince JD group to address them. Some issues may take back seat. 9/18/2018

COMPLICATION – Settlement Effect on remaining defendants Expertise on particular subjects could be lost. Each defendant must have knowledge of all issues. Increases settlement pressure. “Last man standing” syndrome. Individual costs/responsibilities increase. Agreement on infringement/invalidity/royalty affects others. 9/18/2018

COMPLICATION – Trial Trial Issues Can’t control other’s witnesses. Witnesses can be substantively harmful or just not likeable. Can affect other defendants. Cross-examination of each defendant’s non-infringement expert. 9/18/2018

ADVANTAGES Cost Sharing More Heads Are Better Than One Prior art search Experts Briefing Depositions Written discover More Heads Are Better Than One Collective thinking. Especially helpful to inexperienced defendants. 9/18/2018

ADVANTAGES Overwhelmed Plaintiff Less capable to timely address discovery deficiencies. Defendants have more time: to develop case to schedule defendants’ depositions 9/18/2018

CONCLUSION Often saves costs But can add costs Advantages from cost sharing probably offset (are overtaken) by complexities and complications. 9/18/2018