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Global Litigation Strategy and the art of war

The ultimate goal in a global IP dispute is
rarely to fight and win every case in every
country in the world. This is usually a waste
of time and money. Instead, the goal is to
use the situation to obtain the best
commercial result � better than before the
dispute arose. As Sun Tzu said in The Art of
War: “For, to win one hundred victories in
one hundred battles is not the acme of skill.
To subdue the enemy without fighting is the
supreme excellence.”

All manner of opportunities arise in the
context of a potential IP dispute. The following
five step approach is designed to put you in
the best possible position to identify and
seize these opportunities and, if necessary,
to go out there and win the litigation as well.

In a global IP dispute, two critical factors
will play a large part in determining your
fate: choosing and coordinating the
jurisdiction(s) in which you litigate and the
outside counsel you use in each country.

Assuming that your strategy dictates
litigation in a particular country, and you
have chosen your advocate, then the next
three steps to checkmate are: relentlessly
seeking and analysing the facts; devising
and implementing a consistent strategy; and
making sure the team runs smoothly.

To make this article more interesting for
you, I asked IP litigators from nine
jurisdictions the following question: “In your
experience, what is the single most important
thing for your clients to focus on to maximise
their chances of winning a major IP case?”
The answers reinforce the suggested
approach and provide some interesting
additional insights.

Where and when to litigate

If you have the choice, then clearly you
should litigate where you will obtain the
greatest strategic advantage. Where is that?
Well, it depends on your situation. The takehome
message here is that the better you
understand the options available in various
jurisdictions, then the better you can make
the most of them.

Here are some examples of factors to
consider in designing your strategy � as you
can see, they must be combined into a
single, coherent strategy based on your
particular circumstances.

Local procedural rules may act in your
favour. For example, for years IP owners had
been commencing proceedings in the courts
of the Netherlands because of the courts’
willingness to grant cross-border injunctions
across Europe (this practice is now in serious
doubt, although it has not been specifically
ruled invalid under the present Brussels
regime by the European Court of Justice).

Similarly, if you are seeking to enforce a
patent, you may wish to take advantage of
the split systems in China or Germany which
(usually) require separate courts to hear
cases relating to infringement and validity.
Such a system removes invalidity of the IP
right as a defence in the infringement
proceedings. So you can usually obtain a
fast result on infringement, and subsequent
remedies, such as injunctions. Of course,
the defendant is still able to challenge
validity and, if successful, have a finding of
infringement become useless at a later date.
This does not detract from many of the
strategic advantages of having a fast
infringement result, however.

You may want to make the biggest
impact where the greatest commercial effect
will be evident (either to seek an injunction
against an infringer or to get the attention of
the IP right owner). Clearly, this is dictated by
standard commercial factors such as the
market size in various countries.

If you are a relatively small player, you
may first wish to seek the most cost effective
litigation result. Consequently, you may elect
to follow the administrative tribunal route in
China, which will also return an enforceable
decision in three to six months.

On the subject of cost, the concept of
litigation efficiency (LE) helps in the
comparison of relative costs of litigation
between jurisdictions. LE is the market size
divided by the average cost of running a full IP
case in that jurisdiction. A larger LE means
that you buy more market dollars for every
dollar you spend on litigation. Note that the LE
in a particular jurisdiction will be different for
different types of IP litigation and should be
compared on this basis. Due to its relatively
large size and relatively low cost, France has
an attractively high LE. Consequently, it may
be most cost effective to commence
proceedings here for a relatively inexpensive
litigation in a relatively large market. Japan
(because of the enormous size of its market)
and Germany (due to relatively low cost) also
have high LEs.

If your strategy dictates that speed is of
the essence, you may elect fast-track
litigation in the Netherlands (10 months) or
the United Kingdom (10 to 15 months).
Alternatively, if your case is quite technical,
you may choose to go with one of the
specialist IP courts which are now available
in an increasing number of jurisdictions. For
example, Germany, the Netherlands, the
United Kingdom, China and Japan (the United
States Court of Appeals for the Federal
Circuit is also specialised in IP matters).

Selecting outside counsel

Selecting outside counsel is really a topic for
another day. But here are a couple of
important points to consider. Make sure that
the outside legal team will work well with you
and your internal people (more on this later).
If there are any doubts about this, then fix it
immediately. Otherwise, you will dramatically
compromise your case.

The person who will lead the
presentation of the case in court (the
advocate) must have a proven track record.
Ask for that proof. A list of cases argued,
both won and lost, is a good start. In some
countries, there are advocates who are
separate from law firms and do nothing else
(eg, barristers in the United Kingdom and
Australia). Barristers are instructed by
external legal counsel � make sure you have
a direct line of sight to them and that you
are confident in them.

Get the facts right, right?

Relentlessly pursue the facts, understand
them better than anyone and be prepared to
explain them simply in a consistent theme to
the judge or jury. This includes unremittingly
seeking evidence first from your own
organisation and, later, from your opponent;
and identifying and retaining the finest
experts, and working closely with them to
prepare the best evidence. As Jim Hurst
from the Chicago office of Winston & Strawn
says, winning requires “exhaustive
investigation, analysis, and preparation”.

The paper trail

Gathering documents and evidence is a
critical part of the forensic exercise. This is
particularly important in jurisdictions which
do not have court-ordered discovery (or
disclosure). Marina Couste and Florent
Guilbot from the Paris office of Howrey LLP
explain that conserving and gathering
documents prior to litigation is the most
critical thing to focus on in France. Stan
Abrams from the Beijing office of Lehman,
Lee & Xu said the same thing about Chinese
IP litigation. While it is now possible to
obtain court-ordered preservation and
collection of evidence in China, it is still
relatively difficult compared to other
jurisdictions, and in Stan’s words, proper
documentation will “make or break” an IP
case in China.

A solid foundation

As the facts come together, you need to
confirm that you are on solid footing. So, the
exhaustive analysis must include a thorough
investigation of infringement and validity
issues as early as possible. The analysis
should be continually reworked as more facts
come to light. Paul Steinhauser and Otto
Swens from Steinhauser Hoogenraad in the
Netherlands recommend a thorough validity
analysis before taking any (legal) action
against the adversary and in all situations,
regardless of whether the client is the owner
of the IP right or the alleged infringer. They
suggest that validity searching should not
only cover the industry in which the client is
active, but also related industries.

Expert testimony will make or break
your case

In some jurisdictions, the parties are
permitted to submit evidence from suitable
experts in support of their case. Such
experts are usually extensively crossexamined
so the choice of expert is critical.
Most readers will have seen cases won or
lost by expert testimony and clearly their
importance should not be underestimated.
Simon Cohen and Nigel Stoate from the
London office of Taylor Wessing commented
that careful selection of an expert will
undoubtedly change the course and outcome
of the litigation. This sentiment is echoed by
Paula Bremner from Hitchman Sprigings in
Canada who also strongly recommends
retaining experts as early as possible so that
they can assist in developing the strategy.
However, in some jurisdictions, such as
Australia, there can be severe strategic
disadvantages to opening communications
with experts, so be wary about direct
involvement by experts in strategy.

A consistent strategy

Once you have a good handle on the facts
(actually, you probably will not fully
understand them until after the trial), then it
is time to rework your strategy into a single,
consistent theme. As Koichi Tsujii from
Nakamura & Partners in Tokyo says: “One
must set up a consistent and convincing
strategy, and file briefs and exhibits in line
[with it] from the beginning to the end.” Jim
Hurst’s comments add further colour to this:
“The best ideas often come late at night and
only after tearing apart the patent and the
prior art on literally a line-by-line basis. The
best litigators then build that case-breaking
idea into a simple and understandable theme
for the entire case …”

Knowing the facts is one thing, being able
to cogently explain them is entirely another.
As Scott Blackman from the Washington DC
office of Winston & Strawn suggests, you
must know the fact issues so well that you
can comprehensively explain them to the
judge (and/or jury) in terms that make sense
to them and educate them as necessary.

As mentioned above, a critical
component of this is your choice of
advocate. The best advocates readily
synthesize many complex facts and legal
issues and weave them into a simple story.
If you are lining up for a major IP case, then
why not put your top two or three choice
advocates to the test? Give them a
complicated document � be it a technical
document for a patent case, or a marketing
or other document for a brand, trademark or
copyright case � and 24 hours to digest it.
Watch them explain it to someone from your
organisation who does not have the relevant
subject matter background. How well did
they get the information across?

It’s a team effort

As we all know, IP litigation is expensive, not
only in legal fees, but also in terms of drain
on resources. Consequently, handsome
rewards await those who ensure that the
team of people from within and outside the
organisation is operating effectively.

Christoph de Coster from the Munich
office of Taylor Wessing says that building an
effective team is crucial for success in
Germany. Christoph gives the example of
patent litigation, which in Germany is
handled by a team of lawyers specialised in
patent litigation, who take care of procedural
matters, and patent attorneys (from a
separate firm) who prepare the technical
aspects of argument for the court. Ideally,
the lawyer(s) and patent attorney(s) will have
an excellent working relationship and be
used to working together on the overall
strategy for the case.

Robert Cooper from the Melbourne office
of Mallesons Stephen Jaques agrees that
creating and maintaining an effective team is
critical. Robert emphasises the importance
of excellent communication between client
and litigators to deal effectively with critical
strategic decisions as they arise.

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