This is News?
May 17, 2007 | Filed Under Litigation, Law Firm Trends
There’s a lot out there on the web, and not all of it is as it seems.
Take, for example, this “article” which appears to report on issues that major medical device company is facing over a prominent division.
What looks at first blush like news is actually an invitation to contact a plaintiffs’ attorney if you look at the link at the bottom of the page. Other signs include the fact that the “About” page has no identified editors or staff (but a fetching picture of a very earthy group in the wild), and the site’s FAQs are all about class actions.
It’s probably advisable to Google your company from time to time and see what you get. All the news that fits may not be news at all.
Open Source, Open Season?
May 14, 2007 | Filed Under Litigation, Technology
Fortune reports that Microsoft is taking a hard look at various free and open-source software (FOSS) and is planning a strategy to assert patent claims. Many large companies use such software in various applications across the enterprise.
Microsoft General Counsel Brad Smith and licensing chief Horacio Gutierrez sat down with Fortune recently to map out their strategy for getting FOSS users to pay royalties. Revealing the precise figure for the first time, they state that FOSS infringes on no fewer than 235 Microsoft patents.
Mr. Smith has been aggressive in building up Microsoft’s patent portfolio. When he became general counsel in 2002, the company filed 1,411 patent claims; in 2004 it submitted 3,780.
There were three options for the Microsoft GC regarding potential infringement:
First, it could do nothing, effectively donating them to the development community. Obviously that “wasn’t very attractive in terms of our shareholders,” Smith says.
Alternatively, it could start suing other companies to stop them from using its patents. That was a nonstarter too, Smith says: “It was going to get in the way of everything we were trying to accomplish in terms of [improving] our connections with other companies, the promotion of interoperability, the desires of customers.”
So Microsoft took the third choice, which was to begin licensing its patents to other companies in exchange for either royalties or access to their patents (a “cross-licensing” deal). In December 2003, Microsoft’s new licensing unit opened for business, and soon the company had signed cross-licensing pacts with such tech firms as Sun, Toshiba, SAP and Siemens.
Microsoft has not said whether it will pursue litigation over alleged FOSS patent infringement. If it does, expect the IP practice areas of major firms to get very busy.
Crisis and Response
March 21, 2007 | Filed Under Litigation, Crisis Planning
There are two interesting items for corporate counsel who are sometimes pressed into service as PR advisor (or worse, spokesperson).
The first is from the Center for Media and Democracy, which details a short history (with a definite slant) of corporate responses to citizen group attacks, and how some of them may have backfired when the company responded with legal action. As the authors note:
Some companies decide they want to get even, PR backlash and lawyers’ costs be damned. CEOs call in their lawyers, who may see the courts as a way to punish — or even silence — critics. Angry PR advisers might also advocate legal threats and actions. Yet, history shows that legal actions against critics often only scucceed in turning a low-level issue into a full-blown public image crisis.
On a related topic, the Legal Times has an article about how outside counsel should handle the public during a trial. Michael Levy and Richard Levick offer sage advice to lawyers who may be comfortable in the courtroom, but may turn into a fish out of water when on the courthouse steps with a microphone shoved their way. They delve a bit deeper, covering two key issues:
First, what are the risks and benefits of public outreach during litigation? It is a question that allows for a broader picture of how and why communications campaigns are developed and the fundamental choices that have to be made in each case.
Second, how can companies and their lawyers work with communications professionals without exposing highly confidential and sensitive client information to discovery? It is a specific concern that relates directly to the larger, evolving role of the public relations adviser.
With all the access to media that people have, and all the outlets that never existed before (like blogs!), companies need to take a much more long-term view of their PR strategy. As tempting as it may be to try to commence legal action against a wayward citizens group, or stonewall the press during high-profile litigation, in most cases adopting a more even-keeled response (with a trained human face out front) is about the best you can do.
It’s getting harder and harder to have the last word.
33 and a Third
March 12, 2007 | Filed Under Litigation, Law Firm Trends
The Wall Street Journal (via the Baltimore Sun) has an interesting look at contingency fees at large corporate law firms.
The featured firm is Faegre & Benson, who represented fishermen in the Exxon Valdez oil spill case. Last year, a federal appeals court upheld a verdict for the plaintiffs that included $2.5 billion in punitive damages. Fees for Faegre and other firms could approach $900 million. The WSJ Law Blog covered the case late last year.
As the paper reports:
Traditionally, the nation’s top corporate law firms have shunned contingency-fee work — often cases that target big corporations for punitive damages — for fear of alienating their core clients. But driven by pressure to boost profits, more such firms are crossing over to what some lawyers call the “dark side.”
There is also plaintiffs work in more pedestrian cases involving antitrust or patent claims.
“Expenses are increasing for firms, while at the same time their clients increasingly seek discounts” on lawyers’ hourly rates, says legal consultant Ward Bower of Altman Weil Inc. “The opportunity for upside at many firms is limited, and these plaintiffs cases provide enormous upside opportunity.”
In my mind, there is a big difference in representing business plaintiffs in commercial disputes, versus representing individual plaintiffs in mass tort (or economic damage) cases. The fact that a corporate firm would be seeking punitive damages (and forced to argue for them on appeal) could rub many GCs the wrong way.
Good luck to Faegre divvying up the spoils; no word on whether this case has affected its energy practice.
One comment provides some context:
Most of the firm’s partners don’t expect a big windfall from the case, Faegre partner John Hinderaker says. “I’m hoping to remodel my kitchen. That is the level of expectation I have.”
Contracting Shrinkage
February 5, 2007 | Filed Under Litigation, Technology
Does EULA stand for Everyone’s Upset at Legalese Always?
Cory Doctorow knows what EULA means and turns an insightful eye to the shrink-wrap variety of these consumer “agreements” in Information Week. He wonders if litigation is looming over some of the more excessive examples of such adhesion contracts masquerading as software licenses:
We seem to have sunk to a kind of playground system of forming contracts. Tag, you agree! Lawyers will tell you that you can form a binding agreement just by following a link, stepping into a store, buying a product, or receiving an email. By standing there, shaking your head, and shouting “NO NO NO I DO NOT AGREE,” you agree to let the other guy come over to your house, clean out your fridge, wear your underwear and make some long-distance calls.
(I think this is an example of the objective theory of contracts my professor made me aware of through a Socratic bludgeoning with Lucy v. Zehmer).
Then Mr. Doctorow gives an example of the license that accompanies Microsoft’s new Windows Vista OS:
For example, Vista, Microsoft’s new operating system, comes in a rainbow of flavors varying in price from $99 to $399, but all of them come with the same crummy terms of service, which state that “you may not work around any technical limitations in the software,” and that Windows Defender, the bundled anti-malware program, can delete any program from your hard drive that Microsoft doesn’t like, even if it breaks your computer.
And finally speculation on what business might be forced to do if it took all EULAs seriously:
If you wanted to really be careful about this stuff, you’d prohibit every employee at your office from clicking on any link, installing any program, creating accounts, or signing for parcels. You wouldn’t even let employees make a run to Best Buy for some CD blanks — have you seen the fine print on their credit-card slips? After all, these people are entering into “agreements” on behalf of their employer — agreements to allow spyware onto your network, to not “work around any technical limitations in their software,” and they’re agreeing to let malicious software delete arbitrary files from their systems.
Law is at its worst when it does what it can rather than what it should.
Clearly there should be some shrinkage when it comes to over-reaching EULAs and other consumer contracts. C’mon, people, everyone in the pool.
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