Patent News | "Program to cut costs, length of patent cases"

By:Thomas Olson,
Sunday, December 4, 2011
Category: Patent News

Executives at Calgon Carbon Corp. didn't envision a decadelong court fight in 2001 when the Robinson-based company sued a competitor for infringing on its patent.

And they certainly didn't expect the federal court in Chicago to declare Calgon Carbon's patent invalid, nor to go on and settle the competitor's counter claims for $4.3 million last January.

"The lawsuit was a big distraction for management and cost us in time and money," said senior vice president and general counsel, Richard Rose. "Part of the reason we decided to settle was to avoid another couple of years of litigation."

If that patent litigation were filed today in Pittsburgh, however, the case would not drag on for years and rack up expensive attorneys' fees. That's because of a patent pilot program recently instituted here.

The Western Pennsylvania federal court was among 14 in 10 states selected for the program by the Administrative Office of the U.S. Courts, from among the nation's 94 federal court districts. The court began hearing patent disputes in October under the program authorized by Congress in January.

"The idea of the pilot program was to develop courts around the country where judges would develop expertise in patent litigation," said Chief District Judge Gary Lancaster, who heads the program here.

Under the program, he and three other Western Pennsylvania federal judges will hear patent cases whenever one of the district's other nine judges randomly assigned to them opts out. Previously, judges generally could not decline to hear cases.

The patent expertise the four judges develop at the Downtown court could become a magnet for patent cases, which otherwise can be filed in any jurisdiction where a patented product or device is sold. The court's program also could grow the city's stable of patent attorneys and add to the city's economy.

"In patent cases, attorneys come in from New York, Chicago, Philadelphia and Washington," said Lancaster. "And they come in groups, which adds business for our hotels, restaurants and taxicabs."

The judge noted that visiting attorneys hire local counsel from Pittsburgh law firms to stay abreast of case developments, which should add to local firms' patent attorney ranks and revenue.

Patent judges oversee the process of attorneys asserting their claims and counter-claims. Juries decide whether a patent is valid and has been infringed upon, as well as any damage amounts.

Patents are important for corporations and other holders to protect, especially those engaged in high-technology fields, such as drug or chemicals manufacturing, experts say.

For instance, Bayer Corp. in Robinson holds about 38,000 patents worldwide. Its crop science business sued Dow AgroSciences in federal court in Delaware in early November, claiming Dow infringed on seven Bayer patents for herbicide-tolerant plants.

"(Patent) protection is essential for Bayer's crop science and material science businesses, which require research and capital investment, manufacturing scale and long lead times to reach full production," spokesman Bryan Iams said.

When Westinghouse Electric was a multi-industry conglomerate years ago, it employed 26 in-house patent attorneys in 1986 and more than 40 in the 1970s, said Vaughn Gilbert, spokesman for the Cranberry-based company that now focuses on nuclear power. The old Westinghouse owned the third-highest number of patents in the country for much of the 20th century, Gilbert said.

Most patent lawsuits end with the two parties agreeing to a settlement, but patent litigation typically drags on for about two years regardless of how it's resolved, said attorney James Singer, an intellectual property partner at Pepper Hamilton LLP's office, Downtown.

"Patent litigation is very expensive because it requires a lot of technical analysis" involving paid technical experts, such an engineers and scientists, said Singer, who's been a patent attorney for about 13 years.

The process of discovery — during which each party requests factual information from the other — adds to the time and money spent on cases, he said, especially because parties usually object to providing information they believe will reveal competitive advantages.

"These cases involve highly technical trade secrets, and neither the defendant nor the patent holder wants to disclose their trade secrets in court," said attorney Alan Towner, head of the intellectual property practice at Pietragallo Gordon Alfano Bosick & Raspanti, Downtown. So the parties "stonewall" each other's requests through time-consuming legal maneuvering.

The patent pilot program expedites the usual court hang-ups through "local patent rules," which the Western Pennsylvania federal court adopted in 2005. They were the main reason the court was among those chosen for the program.

"Local patent rules automatically impose a protective order, which protects each party's confidential information" from being discussed in open court, Towner said.

The rules also place time limits on the parties, said Pepper Hamilton's Singer. For instance, a patent holder must assert its specific claims within 30 days of a case's initial conference with the judge, then the defendant must reply within 14 days.

"So you get right to the meat of a case, rather than spending months arguing about procedures," Singer said.

For example, Singer represented a large-screen television maker in 2008 that brought a patent-infringement lawsuit in the Western Pennsylvania court against a competitor. Held to the local patent rules, the parties resolved their difference by settling in about a year.

"The case could have gone on for another six months," he said.