How Juror Misconceptions Affect Patent Trials

On a sunny morning in November, Jerry Moscovitch, a Canadian design engineer, was showing off the computer stand he'd invented to eight perfect strangers in Marshall, Texas.

"Inside here is a spring," he explained, pointing to the computer stand, which he designed to hold two flat-panel monitors, as jurors in the federal district court room leaned in to see. "This part has bumps on it, and when you rotate it, the bumps come out of the pockets, and then the spring pulls [the arm] back in," Moscovitch explained.

His lawyers from Susman Godfrey looked on, unsmiling. It was a critical moment in a patent trial: the moment an inventor connects with a jury -- or doesn't. But unlike most patent plaintiffs, Moscovitch had a report by the alleged infringer Ergotron Inc., that he claimed showed it had copied his invention.

Lawyers know that copying doesn't need to be present to prove patent infringement. Independent invention is not a defense to an allegation of infringement, and patent law stands alone, legally speaking, in that it actually punishes independent development. Other areas of intellectual property law, including copyright, trademark and trade secrets, all require proof of actual copying to hold a defendant liable.

But patent trials get played out on an emotional playing field, as well as a legal and technical one. Veteran trial lawyers and jury consultants say that most Americans think that infringement means inventors claiming they've been copied, their ideas "ripped off" or stolen. "Jurors will almost always talk about copying," says jury consultant Doug Green, even when copying has not been alleged. The idea that copying is at least unethical, if not illegal, is wired into Americans from grade school. Besides, juries don't like the idea of a plaintiff demanding money from a competitor who developed a product independently but simply lost a race to the patent office -- even though that's exactly what the law provides.

New research done using Stanford Law School's new IP Litigation Clearing House -- a searchable database of 78,000 intellectual property cases filed since 2000 -- demonstrates that formal allegations and findings of copying are actually quite rare in patent disputes. "No one seemed to know whether patent infringement defendants are in fact unscrupulous copyists or independent developers," says Stanford Law School professor Mark Lemley. Co-authored by Christopher Cotropia of University of Richmond Law School, the new research, which is published online by Stanford, attempts to answer that question, and does: It's overwhelmingly independent developers that are getting hit with patent lawsuits.

The researchers looked at about 200 recent patent infringement complaints, including cases where plaintiffs had prior business dealings with a defendant, or had trade secrets allegations along with their patent claims. They found only 11 percent contained even an allegation that the defendant had copied, either from the patent or from the plaintiff's commercial product. They also analyzed a much larger sample of published decisions in patent cases, and found that less than 7 percent contained an allegation of copying. Copying was established in less than 2 percent of the decisions.

While it's possible that some copying allegations didn't show up in the complaints, amended complaints and decisions, it's not likely there were many: after all, plaintiffs have an overwhelming motive to put allegations of copying on the record. While copying isn't relevant to infringement, it is relevant to a finding of willfulness, which can triple damages.

What's more, the majority of those cases that do involve copying are within the pharmaceutical and chemical industries. Most of them are Hatch-Waxman litigations involving branded drug companies that sue generic competitors who are legally required to copy to achieve "bio-equivalence." In other industries, including software and computer technology, copying is alleged in less than 3 percent of cases -- and proof of copying is found in less than 1 percent.

If read broadly, that could mean that a broad independent invention defense could wipe out 90 percent of patent litigation. That's speculative, since it's possible the litigation landscape would adjust, but such a change would clearly have a big impact. The reality doesn't square with the rhetoric used to justify patent protection, which often turns to talk about "protecting" U.S. innovation from foreign competitors who might copy it. "The general public, and even people in Congress, their assumption is that these people are thieves, and this is theft," says Lemley.

Because jurors think about copying even when it is not alleged, "it's vital for a defendant to talk about the fact that their product was developed independently." says jury consultant Green. "It goes to the jurors' sense of fairness." Developing a good independent invention story is vital for defendants. "As a defendant, the primary message you should have is to say, 'We're different, and we're better,' " says Ron Schutz, a patent litigator at Robins, Kaplan, Miller & Ceresi. "The jury has to feel they're doing the right thing by voting for your client. Then you need to back that up with the technical foundation to create a solid record for a defense appeal, even if that isn't digestible to jurors."

Getting painted as a copycat is just one danger that defendants face in the courtroom. Defendants are up against other powerful cultural narratives that strongly favor a patent holder from the get-go.

Jurors walk into courtrooms loaded with misconceptions about how intellectual property law works, says Chuck Kauffman, a consultant at CapAnalysis Group, a litigation research firm that is affiliated with Howrey. For example, many jurors don't know the difference between a copyright and a patent, and many jurors believe that patents cover broad ideas, not just specific inventions. Further, jurors are hardwired to believe that corporations will "lie, cheat, and steal" to get an edge on the competition, according to polls that Kauffman has conducted with hundreds of mock jurors.

In those surveys, only 35 percent to 45 percent of jurors had a favorable opinion of corporations, while 75 percent had a favorable opinion of inventors. Nearly 70 percent agreed with the statement, "Big companies steal the secrets and inventions of their competitors." Most of the mock jurors believed that patent rights were trampled regularly, with 85 percent saying that it occurred "frequently or occasionally."

Jurors have a "romantic" view of invention, rooted in archetypes like Alexander Graham Bell and Thomas Edison, says Kauffman. They also have a high regard for the Patent and Trademark Office, and believe that patents are hard to get and the review process is rigorous.

"It's really a myth that's grounded in the 19th century," says Kauffman. "But the inventor story is important because it talks about people, not technology," says Kauffman. "It's an element of the patent case that every juror can understand."

Inventor testimony isn't always a slam dunk. Sonnenschein Nath & Rosenthal's Yar Chaikovsky remembers that in his first patent trial in 1996, working for the defense, the inventors suing his client sounded overly prepared and rehearsed when they kept answering questions about prior art with the same phrase. "They weren't convincing," he remembers. "They kept using the same one-liner." The jury found the patent invalid.

But attacking inventors can be risky. Hunton & Williams partner Greg Stillman represented MercExchange in the district court win against eBay over online auction technology. Stillman believes that an overly harsh, four-day-long cross-examination of MercExchange's founder Thomas Woolston, contributed to the victory. "The jury almost felt sorry for Woolston," says Stillman. "We emphasized that the patent system is designed to protect the little guy against these corporate monopolists. That's usually the theme you want when you are the plaintiff."

Jurors also tend to be skeptical of reverse engineering and "design-arounds," often finding nefarious intent in such actions. That issue came up in the trial of Moscovitch's claims against Ergotron, when an Ergotron engineer had to explain that once the company was sued over Moscovitch's patent, he modified the design of their computer stand to limit their liability -- even though, he emphasized, Ergotron didn't believe its product infringed.

Moscovitch's trial spanned seven days. Lead counsel Susman Godfrey partner Max Tribble was pleased with Moscovitch's performance. Getting an inventor to tell his story in his own words is a must for a patent plaintiff, says Tribble, but it has to be adapted fresh in each case. "A lot of inventors are eccentric, and a lot of them have personalities you don't see every day." Tribble thought he had in this case a sympathetic, grizzled inventor that could win the jury's heart.

But nothing is certain when you face a jury. In the end, the jurors were convinced by the plaintiff's infringement argument -- but they found defendant Dell's counterclaim for infringement of its own patent convincing as well. Since Ergotron has since redesigned its product to avoid infringing Moscovitch's patent, that leaves the plaintiff worse off than when he started -- Moscovitch will likely have to negotiate a license with Dell before selling any more stands. The jury certainly didn't seem convinced by Moscovitch's damages expert either; he had suggested awarding lost profits of $40 million to $65 million, but the jury granted just $3 million. Susman Godfrey, meanwhile, is almost surely in the red for misreading the case -- the contingency fee arrangement it accepted up front probably won't come close to covering its costs.