Professor David Schwartz of the Chicago-Kent School of Law has made a draft of his newest, article — Contingent Fee Patent Litigation — available for download. If you do not know Schwartz from his empirical study of claim construction reversal rates, you should read that article as well — Practice Makes Perfect: An Empirical Study of Claim Construction Reversal Rates in Patent Cases. Schwartz has found an excellent niche in filling in the gaps between case law and the practical experience of those of us that litigate patent cases on a daily basis. Schwartz’s latest article does not disappoint. The heart of the article is Schwartz’ interviews of forty contingent fee patent lawyers and his review of forty-two contingent fee agreements. While the focus of Schwartz’s study is not exclusively on patent trolls, a high percentage of trolls use contingent fee counsel. So, the lessons and conclusions drawn from Schwartz’s article are valuable for retailers. In this post, I will look at some of commonalities between the forty contingent lawyers that Schwartz identifies. In a post next week, I will look at how Schwartz categorizes contingent fee counsel and some of his conclusions and predictions based upon his study.
The forty contingent lawyers generally claimed to do significant pre-litigation investigation and were selective about their clients and cases. While many retailers might dispute the quality of a troll’s standard pre-litigation investigation, it is informative that the trolls’ counsel believe in the quality of their pre-suit investigations.
The contingent lawyers also preferred to litigate patents clustered in three technology areas:
- Consumer electronics;
- Online businesses; and
- Medical devices.
Again, this is no surprise and confirms the story told by the cases — with more than 75% of patent troll litigation focused upon online technologies and electronics.
The contingent lawyers preferred defendants with large sales of a single infringing product, as opposed to smaller sales of multiple infringing products — presumably to streamline cases. This argues for redundant sourcing (and branding) of products whenever possible. Unfortunately, it offers little help for the rash of internet-based cases where a retailer almost always has a single source, and has to.
For more analysis and thoughts on Schwartz’s article, see Dennis Crouch’s thoughts at Patently-O.