Sullivan & Cromwell LLP
What made you choose a career in patent law?
It was more that the career chose me. As a young lawyer I did a fair amount of competition law. I defended a challenge to the Philips-Sony CD licensing programme in the 1980s and my career in patent law took off from there as I learned about CD patents and applicable law. At about the same time, intellectual property became increasingly important to our clients which were seeking good lawyers with exceptional trial skills and not just technologists. Since then, I have had exceptional clients which have entrusted us with their most critical and interesting IP and patent matters in this incredibly interesting and dynamic field.
What are the main challenges you face in leading your firm’s IP practice?
My job is made easier by a cadre of talented colleagues. I think the biggest challenges are striking the right balance among multiple professional responsibilities – for example:
- making sure our clients’ matters are getting the undivided and appropriate attention they deserve to the best of our abilities;
- balancing appropriate staffing for multiple matters;
- educating and giving the right experiences to younger lawyers consistent with the objectives of a case; and
- making sure we have a continued pipeline of the types of matter we have been fortunate to work on.
How are client demands changing and what impact has that had on the way you manage your practice?
Over time, there has rightfully been an increased focus on costs. A patent litigation is a concrete business problem for clients, not a theoretical legal question that may be interesting to counsel. Matters must be resolved not just successfully, but also economically, and that translates into always looking for cost-effective resolutions and making judgments about where to devote resources in cases. Not every potential deposition is worth the cost; not every stone can be uncovered. A good litigator must use their judgment about where to devote client’s precious resources. I also find that my clients are increasingly partnering with us on the best way to defend or prosecute a case.
What part of your work do you find the most rewarding and why?
I love teaching younger lawyers who are interested in improving; watching ‘the light go on’ for a dedicated younger colleague is rewarding. I also love the challenges of trial – for example, thinking about:
- how the case is going to be persuasive, appealing and important to the trier of fact;
- how to react to changes minute-by-minute in the courtroom; and
- your adversary’s theory.
Trial is live theatre in the best sense of the concept and I love directing the play. Although, ultimately nothing compares with winning for your client – for example, the recent $960 million award obtained for our client BlackBerry is among the most rewarding moments of my career because of what it meant to the people at BlackBerry.
From a litigator’s perspective, what are the major differences between the Supreme Court, the ITC, the US Court of Appeals for the Federal Court (CAFC) and the district courts?
There is a common thread to many of the points: be prepared to address what your adversary is going to do before they do it and know your audience. However, in each of these examples the audience is different. Your case in the Supreme Court must appeal to non patent judges and you must make sure your proposed outcome or the rule you want the court to adopt addresses every foreseeable application of the principle you are advocating. In the CAFC, you have knowledgeable patent judges who will often dive more into the weeds of technology and patent law and you must demonstrate why established precedent compels the result you seek, or no longer is a good or just principle. In both forums, you must hit the highlights in a short period, portraying your issues at a high level that is appealing and address both the questions an appellate judge is likely to have (whether verbalised or not) and what you believe your adversary will present.
- In the ITC, it is important to:
- know the staff and your administrative law judge;
- keep in mind the agency’s purpose; and
- address the multiple issues applicable only in the ITC, which may ultimately lead to a decision for your client on whether an exclusion order will be granted.
Jury trials, of course, are different. A legally sufficient, compelling, coherent and credible story must be put in front of the trier of fact. There must be a focus not just on why it is important for your client to win, but also on why it is important to the jurors for your client to win. There can be less focus on precedent, policy and the multiple circumstances that may be implicated by the principle you are advocating, while more attention on why it is fair, just, right and important to the jury for your client to win this dispute given all of the evidence.
What skill set does a top-class litigator possess?
You must recognise that your job is not only to be right, but also to convince someone else that you are right. Using common sense to reach your audience and construct a case theory or story that appeals to your audience is a critical skill. A skilled advocate uses the law, witnesses and exhibits to tell a compelling and cohesive story that appeals to the audience. To do so, you must delve into the make up of the decision maker and decide what will appeal to them. What will the trier of fact find believable and appealing? What is likely to have happened based on who they are? As well as common sense, a good trial lawyer must be able to read people.
Is it fair to describe the United States as being less patent-friendly than it used to be?
It is a less fair characterisation than it used to be. The US system fiercely protected intellectual property 20 years ago and it is no doubt true that a backlash regarding bad or soft patents led to the United States being less patent-friendly in recent times. But over the last three years or so, the system has adjusted and I believe that the United States is one of the best places, if not the best place, to assert IP rights – for example:
- it has become easier to win enhanced damages (as a result of a case we argued in the Supreme Court);
- the rules and results of inter partes review are more patentee-friendly than three years ago (albeit still problematic);
- early challenges to patentability are significantly less likely to succeed as a result of new CAFC decisions; and
- trends in jury verdicts are showing higher damage awards.
There are new ways, based on new case law, of addressing damages for non US infringing sales and the ITC remains a forum to seriously consider. The head of the USPTO is doing a terrific job of balancing multiple constituencies and protecting significant inventions and the head of the antitrust division has taken an admirable and thoughtful position on the application of competition law to IP rights. So, there are a myriad of favourable developments.
In terms of SEPs, injunctions are no longer out of the question and a recent body of case law suggests an unwilling licensee may have forfeited any right to a licence on FRAND terms. Balanced against recent developments in other jurisdictions, such as Europe, I would argue that the United States is trending in a favourable way for patentees while other jurisdictions are trending away from patentees.
In sum, the ‘bad rap’ for the United States in terms of protecting patent rights has not really caught up with where we are today.
You have done a lot of international work, what do you see as the major differences between the key jurisdictions?
In many respects (eg, what constitutes fair and reasonable negotiation protocols for licensees and licensors with respect to SEPs), multiple jurisdictions are coalescing. There is a lot of common ground in Europe, China, Korea, Japan and the United States Perhaps the greatest differences that remain, however, include:
- a far higher level of damages for infringement in the United States than elsewhere;
- a greater likelihood of injunctions outside the United States (although I would argue not as great a difference as was historically true);
- the relative costs of litigation; and
- the nature of discovery and time to resolution.
Some – wrongly in my view – necessarily conclude that these criteria are either good or bad in all circumstances. However, each venue has its own approach for the specific dispute at issue and a single source of advice – such as we provide – to address multiple venue options is an important service to clients. Of course, in the right case, the right choice is not proceeding in one venue but in several.
FRAND issues are becoming more important in the United States and elsewhere, how do you see things developing over the coming years?
The challenge we face today with FRAND is achieving the right balance, particularly considering the incorrect view that implementers and innovators have no common interests because they do. Innovators need implementers to use, develop and market new technologies; and implementers need innovators to help invent new products and services which implementers can sell.
As with many aspects of patent law, we need a greater level of certainty. What is a methodology for calculating a fair and reasonable rate? Top down? Licensing comparables? What is non discriminatory? Can a national court set a worldwide FRAND rate? Are injunctions available against a non willing licensee? Where do border seizures fit in?
These and other questions are still being answered. Perhaps I am an optimist, but I believe greater certainty on these issues will lead to less inefficient friction in the system, less litigation and, hopefully, less hold out (my experience supports Assistant Attorney General Delrahim’s view that hold out is a much wider systemic problem than hold up).
With the coming of 5G and a much higher number and wider array of potential licensors and licensees, I think it would be terrific if we could look to international collaborations under the auspices of standard development organisations to discuss a rational approach to 5G licensing. Competition law prohibitions would likely need to be relaxed and some participants would need to find a renewed sense of good faith, but without a rational approach, all (except perhaps lawyers) will lose.
5G implementation would be a good vehicle to move FRAND issues to international dispute centres, hopefully with participants committed to a fair solution and not just one-off imposed resolutions. I must believe that in future we will get there because it is the best of only a few rational approaches.
If you were to make one prediction about the future of US patent law and practice, what would it be?
I think the United States will continue to move in a favourable way for patentees, and we will face less uncertainty on important issues. The United States will continue to recognise the importance of innovation to our economy and the need to better balance the rights of implementers and innovators. That trend will encompass many components, including:
- Between the courts and Congress, we will better define what constitutes a patentable invention under Section 101 of the Patent Act.
- Under Director Iancu’s leadership, we will continue to modernise the USPTO and the director will continue to better arm patent examiners with clearer guidance so, among other things, examination time is decreased and questionable inventions are more consistently denied patents.
- With CAFC guidance, we will have greater certainty about the appropriate measure of and ways to calculate infringement damages.
All in all, the future will bring us to a place that recognises the need to protect intellectual property as well as the need to deter abuses associated with intellectual property – a course I believe we have just begun navigating.
Garrard R Beeney
Partner [email protected]
Garrard R Beeney, co-head of Sullivan & Cromwell’s IP and technology group, is regularly recognised as a leading lawyer for his trial work and counsel to clients on global IP and licensing transactions and litigation matters. He has handled patent and IP matters before the US Supreme Court, the International Trade Commission (ITC), USPTO and federal district and appellate courts, and regularly advises on non-US litigation, particularly in the European community.
Click here to see his IAM Patent 1000 2019 profile.