"Patent Certainty," Idaho Business & Law (Spring 2010)
Click Here for PDFA new set of rules adopted by Idaho’s U.S. District Court that lays out procedures for patent infringement cases should help Idaho businesses when it comes to intellectual property battles by bringing more certainty to the process. The new “local patent rules,” modeled largely on rules adopted in the northern California judicial district that encompasses Silicon Valley, were adopted in December by a local rules committee convened by U.S. District Court Magistrate Mikel Williams.
The effort to draft the rules was prompted in part by an article published in 2007 by local attorney John Zarian in The Advocate, the Idaho State Bar’s monthly publication. Zarian, now an attorney at Zarian, Midgley & Johnson, had moved to Idaho in 2005 after practicing law for 16 years in California, and he saw the need for a more patent-friendly legal environment. After the article was published, Williams told Zarian that Idaho’s federal judges had also discussed the need for changes.
In 2007, Idaho ranked as the state with the highest number of patents filed per capita, but the number of patent cases filed in the District of Idaho had been declining since 2004. Cases had increased to 6.5 per year between 1997 and 2004 before dropping to four cases total filed between 2005 and 2007.
At the same time, patent cases were growing nationally, including in neighboring states like Utah and Nevada. Other jurisdictions like the Eastern District of Texas experienced an increase in filings after adopting local rules for cases. The problem for Idaho companies and inventors is that it’s costlier to hire counsel in other jurisdictions, more burdensome to deal with a case across the country and riskier to deal with an unfamiliar jury pool that may be biased to a local employer.
“It’s not that Idaho companies aren’t being sued or aren’t suing,” Zarian said. “They just aren’t suing or being sued here.”
Zarian, who served on Williams’ committee, helped draft new rules with the help of other local attorneys. The rules set up more exact time limits for certain court filings as well as procedures for determining patent claims and defining allegations of infringement. They also require that both sides wrangle over the terms and validity of a patent before moving on to the more intensive process of discovery, which can be time-consuming and very costly. Having that first phase opens up a huge window of opportunity to settle a case.
That’s important because most patent infringement cases result in a settlement, so having that earlier phase to resolve the debate over patent terms can potentially save significant time and money, said Frank Dykas of Dykas, Shaver & Nipper, one of the other attorneys that served on the committee.
“Usually that’s what’s necessary to get a case into a position where it can be settled, assuming you have counsel that are rational, competent and know what they’re doing,” Dykas said. “The result is it moves litigation along faster and resolves cases quicker. It should expedite and bring some of the costs down. These cases are horribly expensive.”
Dykas said the rules have also been tailored specifically to Idaho, making adjustments from the northern California rules that were geared towards Silicon Valley companies that are accustomed to hiring expensive law firms that might devote teams of 10 lawyers to cases.
For example, some of the deadlines have been extended to accommodate Idaho law firms that might need more time to prepare. The rules also allow for judges to modify procedures if the circumstances demand it, such as if there’s a dispute over inventorship that needs to be resolved.
Zarian said that in his research for the 2007 article he was only able to identify seven out of 94 judicial districts that had adopted comprehensive local patent rules, though he has heard anecdotally that a number of courts are now looking at doing so.
The greatest benefit for Idaho companies is that they can now feel assured that if they have to go to court over a patent issue they would be able to remain on their home turf and know approximately how long a case will take and exactly how it will be litigated, he said.
“My hope would be that local companies and businesses would start to think of the District of Idaho as a viable patent-friendly alternative in which they can seek to have their patent disputes resolved,” he said. “They don’t have to wait to be sued somewhere else. There’s a federal court here with state-of-the-art rules in place, a predictable well developed set of rules, that gives them another option.”
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Simon Shifrin is a reporter for the Idaho Business Review where he writes about law and government issues.
(Article reprinted with permission from the Idaho Business Review)