Next, Bill Robinson, a Partner at Foley & Lardner, presented a discussion on managing costs in IP Litigation. IP Litigation, particularly patent litigation, has seen tremendous expansion, both in terms of amounts that clients have at stake and the price of participating in an IP case. For example, according to the 2003 Report of Economic Survey published by the American Intellectual Property Lawyers Association, the average cost of patent litigation is $2M, trademark litigation is $600K, and other types of IP litigation average between $500K and $800K.

Robinson gave his thoughts on why these costs are so high, and what can be done to bring them under control. First and foremost, Robinson observed that most clients are not actively involved in tactics, strategy, and in controlling the costs of their cases. As a result of not remaining involved in the litigation process, clients give up "ownership" of a case to a law firm. This loss of control leads to overstaffing, overworking, and allows the lawyers to make all staffing and strategic decisions, which will have the effect of driving up costs, sometimes substantially.

Second, Robinson stressed the importance of what he calls, "The Right Attitude." This attitude applies to both the client and attorney, and comprises three main notions: 1) cost control works; 2) cost control will not mean malpractice; and 3) lower costs may mean higher quality.

Third, Robinson identified several important factors to implementing cost control. Having the right lead counsel is the largest factor in managing litigation costs. Clients should select lead counsel by reputation and ability and not by firm. Counsel integrity is critical because the right lead counsel will require less management and monitoring. Lead counsel also has to have time to take an active role in the case, and work closely with the client on maintaining a strategic plan and case budget.

Staffing control is also critical in managing litigation expenses, and an early emphasis on staffing control is important. Clients should know their law firm's staffing philosophy and modify it as necessary. In a typical IP case, staffing consists of a three-lawyer team, plus a paralegal. Costs can be lowered by using more senior and experienced lawyers and by using the client's in-house staff as part of litigation team. Clients should be wary of heightened costs when they observe such things as multiple lawyers at depositions and hearings, a lead counsel that is not involved until just before trial, and paralegals charging for basic secretary work.

In addition, having the right cost control tools are invaluable. Two important tools are the Case Strategic Plan and the Case Budget. Because litigation is a strategic business decision involving the commitment and employment of significant corporate resources, it is crucial to identify the ultimate strategic business goals for the litigation and the most efficient way to accomplish them. The Strategic Plan sets out the overall strategy and the tactics to be used to implement that strategy and also identifies the major tactical uncertainties and the structuring of their relationship to each other and to potential outcome (e.g., claim construction issue uncertainties have an effect on infringement and thus on success and damages).

The Case Budget should be used in conjunction with the Case Strategic Plan, and should meet outcome and cost objectives. The Budget should establish a budget by case phases, such as fact investigation, discovery, motions, pretrial, and trial, and should also set limits for activities within these phases. Robinson emphasized that client review law of firm billing is not an effective way to either manage a case or control costs, and that clients should consider alternatives to hourly billing where appropriate.

Robinson concluded by discussing the proper use of technology in litigation. As a cost saving measure, firms should maintain important documents and deposition transcripts in a searchable electronic database. Setting up a client-firm intranet, where all pleadings and significant documents are kept electronically, is also helpful. Other cost-conscious uses of technology include the use of video teleconferencing for less-significant depositions, and avoiding excessive scanning, coding, and computerizing of unimportant documents.