In this third and final part of my current series on East Texas patent litigation, I will discuss essentials for victory in Texas intellectual property (IP) trials, again, based on my exclusive interview with noted blogger and Texas lawyer Michael C. Smith. Contrary to popular impression, the U.S. District Court for the Eastern District of Texas is not a backwoods court but a sophisticated trier of patent cases. Credibility, collegiality, advocacy, time limits, and predictability are essential characteristics of the venue. Local rules and standing orders must be observed. That all sounds easy, right? But read further for the essentials as applied in victory.
First, a recap. In Part 1, we discussed whether the “speed trap” image of East Texas is unfair, and we went beyond the popular image of the Court to consider the realities that corporate defendants usually prevail, and even when plaintiffs win, the damages are usually smaller than they might have wished.
In Part 2, we showed how to win patent cases in East Texas, starting with respect for the Court, and proceeding to addressing the jury at trial. Respect and courtesy are the hallmarks for success. Diversity of the trial team can be a big help, so long as it is real, just like every other aspect of the lawyer’s dealings with the Court.
Now, let’s get down to the business of winning patent cases in East Texas, focusing, as in Friday Night Lights, on the basics.
Essentials for East Texas
I asked Michael C. Smith what lawyers need to know about litigating in the Eastern District.
“There is very little in your case that the judge has not seen many times before, including every issue of patent law,” Smith replied. “That is different from other places, where judges’ dockets haven’t given them the opportunity to do deep dives into patent law.”
Smith also emphasized the Court and the bar are very collegial with one another. Judges and lawyers get along. “It’s expected,” said Smith.
Smith recalled the wisdom of Franklin Jones, a lawyer from Marshall, who said that “a trial is a race for credibility.” As an example, he related a story of a lawyer who wanted to file a motion that Smith thought would lose. The lawyer asked, “So what?”
“Why present a loser?” Smith responded. “We want to be the ones that the Court can trust when we say what the law is and what the outcome of an issue should be.”
Local judges expect local counsel to make sure that local standards are observed. If the Court sees unsportsmanlike conduct, it may think local counsel isn’t doing his or her job—or it may assume they’ve been “sidelined” and hold it against the trial team.
But that doesn’t mean the judges have a problem with lawyers raising legitimate issues. “Some lawyers don’t want to fight. They’re too eager to avoid taking an issue to the Court. If it’s a genuine dispute over an issue that matters, judges think that’s their job to decide. I never have a problem presenting a dispute that matters.”
Time Limits Help
Michael C. Smith has “never had a case in the Eastern District that didn’t have a timer on it.” And he likes it that way. “The side that uses less time usually wins,” he says.
In one case, the Court allowed 15 hours per side. “That’s actually a lot.” Smith’s team used less than 9 hours and won. “The other side used almost the whole time, and just floundered,” recalled Smith.
He remembers early in his career being surprised that a case that took two years to prepare was presented to a jury in three or four days. “We were just shoveling it in,” he remembers thinking. But the experience left an impression.
After the first case Smith tried alone, he remembered thinking that most of the things he’d worried about preparing ended up not mattering. “It all came down to three things that mattered to the jury.”
Since then, he just asks himself, “How are we going to use this at trial? If we aren’t going to use it, why are we fighting for it in discovery? If it won’t help the other side, why are we fighting to avoid producing it?”
“Old bulls who have tried a lot of cases know this stuff,” he observed. “Patent lawyers often don’t have the same experience, so they have a harder time knowing what’s important in discovery, and they also have trouble cutting it down for trial.”
Big Companies Defend in East Texas
I asked Michael C. Smith why house counsel for big companies attend the Eastern District Bench Bar Conference.
Smith said big defendants with house counsel know they’ll be sued in the Eastern District.
“And many big companies know not to be afraid.” He opined that the Eastern District offers a “high degree of predictability,” and even the trial outcomes regularly tilt towards defendants these days.
“If you have a good case and the other side doesn’t, nine times out of ten you’ll win. Just like anyplace else,” said Smith. That has manifested itself in a massive drop in the number of motions to transfer. The patent pilot program in most courts means you’ll get to trial relatively expeditiously anyway, and you will get an experienced judge in the patent pool.
So why not stay and defend in East Texas?
Venue and Reform
I asked Michael C. Smith about venue reform.
As of December 1, 2016 (well before the Supreme Court granted certiorari in TC Heartland on the issue of venue), Smith expected substantial resistance to patent reform. He thought that after the 2016 election, it had become a lower priority. After the first 100 days, he thought Congress might take it up, but given the drop in filings in the Eastern District—mostly by so-called “patent trolls”—there might be less appetite for venue reform than a year ago.
I asked Smith why, within the Eastern District, are so many patent cases filed in Marshall and Tyler.
Smith explained that cases are filed on a divisional basis. The judges in the Marshall and Texarkana Divisions, who jointly handle the Tyler patent docket as well, have opted to hear patent cases, and other divisions are swamped with criminal cases that can delay trial settings. Thus most cases are filed in those three divisions. “That may change when the three judicial vacancies are filled,” he noted, “but for the past fifteen years the docket has migrated between those three divisions.”
Local Rules and Standing Orders
Local rules, local patent rules, and judge-specific procedures, discovery orders and standing orders, are all posted on the Eastern District website, and are among the first things attorneys need to become familiar with.
On that note, Michael C. Smith excused himself for a conference call with the Court. “The other party didn’t read the Judge’s standing rules.”
A previous version of this three-part series was published as one article, R. Beem, An Interview with Michael C. Smith on Patent Litigation in East Texas by the State Bar of Texas, Intellectual Property Law Section, in its Tipsheet, Vol 11, No. 4 (Jan. 24, 2017).