In the world of patent litigation, last week’s developments involving IP Edge – the most prolific patent-filing entity – and Hon. Colm F. Connolly, the leading judge of Delaware’s premier court for patent cases, have had legal professionals on high alert. The particulars of the case are delineated in an extensive 102-page opinion calling for further scrutiny into the conduct of IP Edge and its attorneys by several authoritative bodies, including the Texas Supreme Court’s Unauthorized Practice of Law Committee and the Department of Justice. IP/DE Blog delivers a comprehensive review of this opinion and its potential ramifications on the broader patent litigation market.
In normal patent cases, infringement, legitimacy, and damages are the three main contention points. The patent owner holds the burden of proof for both infringement and damages, based on a preponderance of the evidence. However, the litigation practices of IP Edge seem to prioritize infringement claims over establishing a cogent damages case at the onset of a case.
Unfortunately, this generates a peculiar situation as observed in Connolly’s decision. There was a conspicuous absence of any tangible damage claims in IP Edge’s approach. Negotiating license amounts became more of an exchange of litigation cost metrics, rather than a reasonable royalty calculation assuming infringement and validity.
Given the unmatched precedent set by the IP Edge case, legal professionals must revisit the plaintiff’s burden of proof and their obligations under Rule 11 regarding damages in a substantial number of patent cases. Every plaintiff filing an infringement claim should not only be able to justify why infringement exists but also articulate a credible argument pertaining to the type of damages it seeks based on the evidence available pre-discovery.
Nonetheless, it is not realistic to expect plaintiffs to have a comprehensive damage analysis at the commencement of a case. Still, demanding more focused attention towards damages earlier on might mitigate the current imbalance in the collective approach towards patent litigation.
Funders and sophisticated contingency trial firms are already adopting such practices when assessing potential cases. The lessons from the IP Edge debacle send a crucial message to the patent litigation sector about the importance of giving due weightage to damages claims irrespective of the stage of litigation.
Gaston Kroub, a founding partner of an intellectual property litigation boutique, presents this opinion. Reach out to him at gkroub@kskiplaw.com or follow him on Twitter with any further questions or comments.