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Friday, December 12, 2008
Inside Legal Services
New rules may bring more patent cases to Mass.
MHT managing editor Rodney Brown on NECN: 22 tech companies give back to community
Massachusetts technology businesses that want to protect their patent rights, or believe that they may be accused of patent infringement, now have a more attractive local forum to resolve patent disputes.
Last month, the U.S. District Court for Massachusetts, with divisions in Boston, Worcester and Springfield, adopted special rules that should provide more predictability and expedited schedules for patent infringement cases filed in Massachusetts. Among other things, the new rules call for early exchanges of detailed explanations and information supporting claims and defenses and prompt rulings on the scope of patent claims — all of which will enable businesses to make informed evaluations of the strengths and weaknesses of their positions and promote earlier settlements.
The new patent rules will add to the inherent advantages of resolving patent controversies in Massachusetts federal court. Most of the judges have presided over many patent cases. There is a wealth of skilled scientists and technicians working at local businesses and universities who can serve as testifying or consulting experts. The local patent bar is strong and deep and familiar with Massachusetts federal judges and juries; so businesses can retain highly qualified legal counsel.
Because of the nature of the evidence that must be presented, technology is important in patent cases, and the courtrooms at the federal court in Boston all have state-of-the art facilities. The proximity of the courthouse is a major advantage. Whether or not there are other “home court” advantages for local businesses, it is more convenient for witnesses and business representatives who will attend depositions, hearings and trials to commute from home or work than to travel to remote locations.
Special rules for patent infringement cases are not new. A decade ago, the federal court in San Francisco — close to Silicon Valley — recognized that the relative complexity of these cases warranted special rules. Other courts subsequently adopted similar rules, most notably, the federal court in eastern Texas, which has become a magnet for patent infringement cases. Despite having a small fraction of the population of Massachusetts, during the 12 months ended on June 30, there were more than twice as many intellectual property lawsuits filed in the eastern district of Texas than in Massachusetts. The contrast between patent infringement litigation in that court and in Massachusetts is the tale of two cities — the largest city in the eastern district of Texas is Marshall, and the district of Massachusetts’ largest city is Boston.
One major difference is jury pools. Potential jurors for Marshall cases are selected from six counties with a total population of under 170,000. Boston jurors hail from nine eastern Massachusetts counties with over 4.8 million residents. According to U.S. Census data, the characteristics of the potential jurors living in the largest counties from which Marshall (Harrison County) or Boston (Middlesex County) juries are selected are very different. For example, college degree (or higher) educations stand at 21 percent in Harrison County versus 50 percent in Middlesex County; white collar jobs (52 percent versus 74 percent), median home value ($80,000 versus $424,000), and average family household income ($57,000 versus $112,000). Relatively better educated and more business-savvy jurors should be better audiences for complex patent cases.
Although very few cases actually go to trial, anecdotal information suggests that Marshall juries are much more “plaintiff friendly” than their Boston counterparts. Ask Boston Scientific Corp., which has been hit with two jury damages awards, one originally for $250 million (since reportedly reduced to $19 million) and the other for $500 million, about the risks of patent infringement jury trials in eastern Texas. It is not surprising that exposure to outsized jury verdicts frequently exerts extraordinary pressure on out-of-state businesses to settle once they are sued in Texas. The prospect of more reasonable Massachusetts jury verdicts should level the playing field here.
Given the nationwide scope of Massachusetts technology companies, they can usually be sued in several different federal courts throughout the country. Often, the parties “race to the courthouse” to secure what each believes is the more friendly forum. When considering or facing patent infringement litigation, Massachusetts tech companies should keep in mind the special patent rules recently adopted by the Massachusetts federal court, together with all the other advantages of litigating here.
John Kenneth Felter, a partner at Ropes & Gray LLP and head of the firm’s Boston intellectual property litigation practice, can be reached at ken.felter@ropesgray.com.
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