Nextpoint Company Blog

Avoiding Damage From Patent Trolls

“ A recent study completed at Boston University School of Law concluded that the cost of defending against patent trolls in 2011 totaled $29 billion in the U.S. According to the participants of the Article One’s Napa Summit, a single NPE (N.B. this is a euphemism for patent trolls) lawsuit can cost a company an average of $1.1 million.”

6 Ways To Work More Effectively in the U.S. Patent System,”
Elizabeth Hampton, Corporate Counsel

Having worked on a number of matters involving patent litigation, it’s clear that defense counsel has an opportunity to significantly reduce cost in managing these suits. Unfortunately, the financial incentive is not there to do so, but there is a clear opportunity to defend intellectual property more efficiently.

The Article One Partners report noted above documented their findings and generated six takeaways to increase efficiency. Unfortunately, there’s a fundamental problem that inhibits efficient defense in intellectual property cases.

Reduce Defense Costs Through Collaboration











It begins with the first takeaway to “reduce the costs of litigation defense through collaboration.” Makes sense right?  But it’s not quite so easy. Law firms have a terrifically hard time collaborating with co-counsel, even in situations where there is no potential for an adversarial outcome.

In their DNA, law firms are built specifically to contest the demands of outside law firms. Lawyers are trained to do everything in their power to deny requests from other firms. ESI, evidence, documents, email, spreadsheets whatever you want to call it — law firms are designed NOT to share data.

One by-product of this is technology that inhibits collaboration. The normal process we see in joint defense groups is to finally get around to deploying a shared platform from which to do discovery or prepare for trial far after the commencement of the litigation – doing it wrong the first time, and then spending a lot of money to get it right. That means clients pay double.

There’s no need to wait. Get it right from the start. Start out with an architecture that encourages co-defense to share data, not prevent it.  And start with a platform to get through trial – not just a point solution. The time savings for attorneys and staff when multiplied across defendants will far outstrip the costs. And when the cost is running $29 billion annually – there is plenty of room for improvement.

Rakesh Madhava is CEO of Nextpoint, which he founded in 2001. Rakesh has more than 17 years of experience in legal technology and trial support with specific experience in white collar criminal defense, breach of contract, intellectual property, shareholder suits, tortious interference suits and product liability. During his career, Rakesh has been retained by a number of Fortune 500 companies including Exxon, Verizon, Morgan Stanley and Astellas Pharmaceutical as well as many of the top law firms in the nation. Notable cases Rakesh has personally supported include U.S. v. Ryan, U.S. v. Razmilovic, et al. (Symbol Technologies), Coleman (Ron Perelman) v. Morgan Stanley, and the Tobacco Fee Arbitrations.

Rakesh Madhava

Meet the guy who takes credit for the amazing work done at Nextpoint in bringing cloud computing technology that streamlines regulatory, compliance and litigation processes. Connect with Rakesh on Google Plus.

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