1. Basics of Patent Infringement Litigation UC Berkeley Patent Innovation and Strategy Dr. Tal Lavian November 24, 2008

2. Introduction and Overview Forms of patent litigation Themes Areas of dispute Infringement litigation procedure

3. Forms of Patent Litigation Patent infringement Licensing disputes Inventorship / ownership Other

4. Infringement Litigation: Themes $ $ $ Theme 1:

5. Theme 1: $$$ “High stakes” litigation: damages “Microsoft ordered to pay $512 million to Alcatel-Lucent…” (June 2008) “Medtronic ordered to pay $400 million to Dr. Michelson…” (October 2004)

6. Theme 1: $$$ “High stakes” litigation: injunctions “Court considers Blackberry injunction… Case settles for $612 million…” (March 2006) “DISH Network DVR may be enjoined…” (August 2006, still pending)

7. Theme 1: $$$ High cost of litigation Amount at Issue Cost Through Trial Less than $1 million $750,000 $1-25 million $3 million More than $25 million $5.5 million Source: AIPLA Economic Survey 2007

8. Theme 1: $$$ High cost of litigation

9. Patent Litigation: Themes Complexity Theme 2:

10. Theme 2: Complexity Complex technology

11. Theme 2: Complexity Complex technology 1.A method of encoding a sound signal, comprising the steps of: providing a codebook circuit for forming a codebook including a set of codevectors Ak each defining a plurality of different positions p and comprising N non-zero-amplitude pulses each assignable to predetermined valid positions p of the codevector; providing a device for conducting in said codebook a depth-first search involving a tree structure defining a number M of ordered levels, each level m being associated with a predetermined number Nm of non-zero- amplitude pulses, N > 1, wherein the sum of said predetermined numbers associated with all said M levels is equal to the number N of the non-zero-amplitude pulses comprised in said codevectors, each level m of the tree structure being further associated with a path building operation, with a given pulse-order rule and with a given selection criterion; wherein: in a level 1 of the tree structure, the associated path-building operation comprises the following substeps: choosing a number N1 of said N non-zero-amplitude pulses in relation to the associated pulse-order rule; selecting at least one of the valid positions p of said N1 non-zero-amplitude pulses in relation to the associated selection criterion to define at least one level-1 candidate path; in a level m of the tree structure, the associated path-building operation defines recursively a level-m candidate path by extending a level-(m-1) candidate path through the following substeps: choosing Nm of said non-zero-amplitude pulses not previously chosen in the course of building said level-(m-1) path in relation to the associated pulse-order rule; selecting at least one of the valid positions p of said Nm non- zero-amplitude pulses in relation to the associated selection criterion to form at least one level-m candidate path; and wherein a level-M candidate path originated at a level-1 and extended during the path-building operations associated with subsequent levels of the tree structure determines the respective positions p of the N non-zero- amplitude pulses of a codevector and thereby defines a candidate codevector Ak.

12. Theme 2: Complexity Complex legal issues Complex business issues

13. Patent Litigation: Themes Theme 3:Uncertainty

14. Theme 3: Uncertainty Complexity  Uncertainty Appeal reversal rate over 30%

15. Theme 3: Uncertainty Changing law “Supreme Court reverses Federal Circuit again…” “Proposed patent reform legislation…”

16. Patent Infringement Litigation Issues in Dispute

17. Patent owner’s claims: Infringement  Direct or Indirect

18. Issues in Dispute Patent owner’s claims (cont.): Remedy  Damages  Injunction

19. Issues in Dispute Accused Infringer’s defenses: Non-infringement  Focus on patent claim elements

20. Issues in Dispute Accused Infringer’s defenses (cont.): Invalidity  Novelty (§ 102)  First to invent?  On-sale bar

21. Issues in Dispute Accused Infringer’s defenses (cont.): Invalidity (cont.)  Obviousness (§ 103)  Was the invention obvious at the time?  KSR case (2007)

22. Issues in Dispute Accused Infringer’s defenses (cont.): Invalidity  Defects in the patent document (§ 112)

23. Issues in Dispute Accused Infringer’s defenses (cont.): Equitable defenses  Inequitable conduct  Laches, estoppel

24. Issues in Dispute Claim construction (“Markman”)  Scope of claims is critical to infringement and validity

25. Patent Infringement Litigation Procedure

26. Pre-filing activity Contact between the parties? Who sues?  Patent owner or accused party Whom to sue?

27. Procedure Pre-filing activity (cont.) Where to sue?  Federal court  “Rocket docket” vs. local  Int’l Trade Comm’n (ITC)

28. Procedure Pre-filing activity (cont.) Diligence and preparation

29. Procedure Pre-discovery period  Lawsuit filed but little $$ spent yet  Legal strategy  Business strategy

30. Procedure Discovery period Discovery tools and sources  Documents  Witness depositions  Written discovery

31. Procedure Discovery period (cont.) Discovery strategy  Cost/benefit  Disputes

32. Procedure Discovery period (cont.) Expert discovery  “Battle of the experts” part 1

33. Procedure Claim construction  Prepare early and often  Markman proceedings and order

34. Procedure Dispositive motions  When?  What issues?

35. Procedure Trial

36. Procedure Trial  Story / themes  Evidence  “Battle of the experts” part 2

37. Procedure Appeal  What issues?  Reversal statistics

38. Patent Infringement Litigation Questions?