By Saria Tseng and John Schnurer ACC Docket ACC Docket 60 60 October 2009 October 2009
Winning Global Patent Litigation Strategies NO MATTER YOUR industry or company, 21 st there is a competitor who is busy trying to take for the market share from you. To successfully counter such at- century tacks, companies must seek ways to gain the advantage over their competitors. Patent litigation is one way to garner or protect market share. It can be used, for example, to enjoin the manufacture, sale or use of a competitor’s prod- ucts, exclude their impor- tation or increase their cost basis. Patent litigation can even be used to discourage a customer from designing in a competitor’s products. A fear of getting involved in a downstream lawsuit stemming from patent lit- igation against the competitor — and the additional effort required to secure indemnity from them — often discourages a customer from designing in the product. Whether you find yourself on the offensive or defensive side of a patent battle, there are a variety of approaches avail- able to help you win the war. Here are a few rules of thumb to consider in implementing a suc- cessful global patent litigation strategy. ACC Docket ACC Docket 61 61 October 2009 October 2009
• • • • • • • • • • • Choose a Legal Forum By counterattacking on one or more new fronts, Effective patent litigation strategies — you seize the initiative and gain momentum. whether offensive, defensive or both — should not be limited to your local court. Rather, they Attack or Defend on Multiple Fronts should reflect the realities of the global economy. SARIA TSENG is When planning an infringement suit, take ad- vice president and You and your competitors generate signifi- vantage of your ability to dictate the place, time general counsel from Monolithic Power cant revenue in markets around the world and and pace of the war. If you have the resources System, a fabless ana- perhaps acquire patent rights in those markets. and wherewithal to open more than one front, log IC manufacturer headquartered in San Using other legal forums available in your home adopt a “shock and awe” strategy and file suits Jose, California with country or other countries, including courts and in multiple forums, such as in the United States sales offices and an R&D center in Europe administrative agencies, can give you an advan- International Trade Commission (US ITC) with and Asia. Prior to tage. Consider legal forums that satisfy one or a collateral case in federal court in a favorable joining Monolithic, Tseng served as vice more of the following criteria: jurisdiction. But respondents (the name for president, general Where the infringing manufacturing takes counsel and corporate defendants in the US ITC) have a mandatory secretary of MaXXan place; right to stay the collateral case in federal court Systems. She is an active member of the Where the distribution of the infringing prod- and file an additional offensive case with differ- bar of California, New uct occurs; 1 ent patents in a fast, patentee-friendly forum, York and the Republic of China, Taiwan. She Where the sales and use of the infringing whether in the United States or abroad. Your can be contacted at products occur; and competitor will reel from your barrage, giving saria.tseng@ monolithicpower.com. Where the infringing products are imported. you the added leverage you need to achieve your objectives. Use of Counterclaims One such example is the Broadcom versus When facing an infringement suit, a worth- Qualcomm global litigation. There, Broadcom JOHN SCHNURER is a while defensive strategy includes both counter- realized the benefits of multi-forum litigation in partner of Fish & Rich- ardson PC in the firm’s claim and additional offensive components in its fight against Qualcomm, which resulted in San Diego, California another forum. By filing counterclaims as simple a $891 million settlement. Broadcom dictated office. He litigates and tries patent as seeking declaratory relief of non-infringement the place, time and pace of its battle with cases in federal courts and/or invalidity — or better yet, asserting in- Qualcomm. In May 2005, Broadcom filed a throughout the United States, including Sec- fringement of your own patent — you may level complaint in the US ITC against Qualcomm, tion 337 proceedings the playing field. before the United asserting infringement against Qualcomm’s States International With a counterclaim seeking declaratory relief, cellular baseband and radio frequency prod- Trade Commission. He also provides strategic you prevent your competitor from leaving the uct lines of various Broadcom patents related global intellectual lawsuit on a whim and ensure finality if they wish to wired and wireless communications and property litigation and prosecution to end it. With a counterclaim asserting infringe- multimedia processing technologies. Broadcom counseling. Schnurer ment, you transform the litigation from a one- also filed a collateral case in federal court in the is an active member of the bar of California. sided defensive fight to a more evenly matched central district of California and another assert- Prior to becoming a battle. Moreover, with an additional offensive laywer, he worked as ing infringement of other Broadcom patents. an electrical engineer. attack in another forum, you set the pace of war, Qualcomm countered with a patent suit in He can be contacted at schnurer@fr.com. especially if you select a faster and more favorable the SD of California. The war would eventually forum than the one chosen by your competitor. span three continents, including Broadcom’s Potential counterclaims for your consider- complaints against Qualcomm to the European ation, assuming supportable facts, include: Commission and the Korea Fair Trade Commission for Declaratory judgment of invalidity; alleged antitrust violations. Declaratory judgment of non-infringement; Ultimately, the US ITC found that Qualcomm’s Declaratory judgment of unenforceability (whether products infringed Broadcom’s patents and issued an based on patent misuse, inequitable conduct, license, exclusion order that would have banned the importation exhaustion, laches or estoppel); of new models of cell phones containing the infringing Unfair competition; Qualcomm products. The judge in the southern district of Antitrust-based claims; California action found that Qualcomm could not enforce Trade secret misappropriation; and its patents because it had concealed them from a stan- Offensive patent infringement claims based on dards-setting group and later concealed discovery of this your patent. fact from Broadcom. A jury in the CD of California case ACC Docket 62 October 2009
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