Editor: Steve, please describe your role in your firm and that of your practice group.
Bauer: I’m a trial lawyer specializing in patent litigation. Our patent practice is split between our Boston and New York offices. Joe Capraro and I opened the Proskauer office in Boston in 2004 with the intention of it being only a part of the patent group. However, we now have more than 100 lawyers in Boston, spread among corporate, patent, labor and employment and other practice areas. Our patent group is somewhat unique in that it is not largely litigation driven. Unlike most large firms, we have a robust patent prosecution practice as well. Joe, who serves as the Boston office head, advises on strategic intellectual property portfolio development, technology licensing and IP due diligence in corporate transactions.
Editor: What in your background led you to become involved in the complexities of patent law?
Bauer: I have a bachelor’s and master’s degree in electrical engineering and computer science from MIT. When I learned how engineers get bogged down in individual projects for extended periods of time, patent law seemed like a lot more fun, because it keeps me at the forefront of lots of different technologies, not just electronics.
Editor: Describe some of the firm’s recent IP successes.
Bauer: In December, we represented a company called MobileMedia Ideas LLC (MMI) in an iPhone-related patent jury trial against Apple. The jury was out only four hours before they found Apple had infringed the three patents that were at the heart of the lawsuit. We also represented American Honda in a case won in Detroit involving automobile piston assemblies. We won a summary judgment of noninfringement for Endeca, a Boston-based technology company that has since been acquired by Oracle. All of these victories took place just last year.
Editor: You are to be congratulated on the Proskauer team’s MMI victory over Apple. Tell us more about that case.
Bauer: I was lead trial counsel, supported by many partners and associates in our New York, Boston and LA offices. It was a seven-day trial in Delaware before a jury of eight people. It involved three patents that were invented and patented by Nokia and Sony back in the mid-1990s. One patent related to the idea of a camera tightly integrated with a telephone; the second patent related to the ability to ignore a second call that is coming in by simply pushing a button; and the third patent related to merging and swapping two calls by pushing a single button.
These patents were improvements on what was available at the time in the 1990s, when, if you remember back then, the first cell phones required one to memorize a whole series of button pushes and menus to accomplish the same tasks. As the lead trial lawyer, I did the opening and closing arguments and cross-examined the experts. One of my partners, Tim Mungovan, and our Delaware counsel, Jack Blumenfeld, focused on the fact witnesses and questioned them.
Editor: To what extent was the victory in that case a demonstration of how licensing by organizations such as MMI incentivizes technology innovation and development?
Bauer: MMI is a company that now owns the Sony and Nokia patents at issue in this case. Large companies routinely create patent holding companies for various reasons, whether it’s for enforcement, tax savings or just efficiency. It’s just the way the patent world works nowadays.
Editor: How did it happen that such a complex case was decided by a jury?
Bauer: You’re right to question why such a technically complex case should go to a jury. The United States has had patent jury trials since the adoption of the U.S. Constitution. A big challenge was figuring out a way to simplify the arguments so that the jury would understand them.
We kept the jurors’ attention by bringing the technology right up to them. We projected a cell phone up on a screen. One of my associates would place a call, and the jury could watch the phone operate and be answered in real time. This was the real thing, not just a canned videotape. We felt that it was important for the jury to have a sense of personal participation in something that was actually happening and not just see some graphics some person did behind the scenes.
Editor: So basically you were trying a case that involved patents that improved very old technology.
Bauer: Yes, this was relatively old technology in that the patents were filed in the 1990s. For example, with respect to call waiting, it used to be that when a second call came in, the phone just kept beeping in your ear. You had no easy way to make the beeping go away. Remember those old phones – at that time, you had to turn the phone upside down to make letters, where the “3” would become an “E” or a “6” could become a “g.” Younger people don’t remember those things.
Editor: So you attribute a lot of your success to the ability to use effective displays at the trial?
Bauer: The goal is to get the jury to understand the technology and patents. Just doing plain PowerPoints or just talking to a jury doesn’t help. You need to demonstrate the operation of the phones in real time so that a jury can see the phone and use their common sense, because jurors know what makes sense and what doesn’t. At the end of the day, that’s the key. A lot of very good experts testified throughout the course of the trial. The members of the jury needed to reach their own conclusions as to whether those experts were making sense.
Editor: To what do you attribute the favorable jury decision?
Bauer: It’s a jigsaw puzzle, and the jury doesn’t know what it’s going to look like before it’s finished. Everything we did was take a bunch of puzzle pieces and help the jury put them together, with the goal being to build a big and convincing puzzle. You focus the jury on each piece of evidence, one piece at a time, and then bring back all of those pieces during the closing and help the jury put them all together. As trial counsel, you help them do this.
Editor: Do you think the outcome would have been different if the patents had been obtained after passage of the America Invents Act?
Bauer: I don’t think so. The patents in the case originated in Japan and Finland, and the America Invents Act largely takes U.S. law and harmonizes it with the rest of the world. Asian and European companies back then were already operating under European and Asian rules, so I don’t think it would have changed much at all.
Editor: Based on your experience, how would you rank this case in terms of the challenges facing a trial lawyer representing a party in terms of convincing the jury?
Bauer: I think this ranks as a difficult trial: difficult because the technology was old; difficult because we had three patents in the case and the technology for each of the three was different; difficult because the inventors were largely Japanese and European who didn’t speak English as their first language; and difficult because Apple has a brand that is as stellar as any brand can possibly be, and many people just believe that Apple can do no wrong.
Editor: So people would come in probably feeling that because of Apple’s reputation, Apple should probably win.
Bauer: Apple began the trial with a series of slides that were intended to remind the jury how innovative Apple has been for the last 15 to 20 years. It seemed to us that Apple’s goal was to have the jury believe that it does nothing but innovate and invent, and that it’s the greatest developer of new technology this country has ever seen.
Editor: And your challenge was to overcome that impression.
Bauer: Our challenge was to bring the jury back to the 1990s and remind them that back then, before there was an iPhone, other people were also innovative in the industry. Patents last 20 years, and if someone uses the protected invention at any time during that period, that’s still patent infringement. We said that Apple might be a Ferrari, but when Ferrari wants heated seats, they don’t go out and reinvent heated seats – they find someone else’s heated seats that work just fine, and they pay for it.
Editor: Might there also have been a tendency on the part of a jury to think of an organization like MMI as simply a kind of patent troll?
Bauer: We think that Apple was trying to cast MMI as a patent troll. But we showed the jury that big companies put patents into patent holding companies all the time, and there’s nothing wrong with that. Heck, Apple does it, too.
Editor: You mentioned that the other steps lie ahead.
Bauer: There will be a separate trial for damages. There are still a number of other patents in dispute. Apple has filed a motion asking the judge to throw out the jury verdict, and that is still in the briefing process. There may be appeals along the way, so it’s far from being over.
Editor: Patent litigation can be costly, and although patent awards are on the rise, many consider jury awards to be highly volatile. In light of this trend, what are some steps that companies can take to proactively mitigate patent risk and reduce patent litigation expense?
Bauer: There are many good patents and many innocent infringers who just want to pay fair value if they are using someone’s technology. But there are also many bad patents and lots of folks looking for ways to game the system to get paid more than their patents might be worth. Trials are probably the most expensive and least efficient way to resolve these disputes. The best ways to mitigate risk, I think, are to have your own patent portfolio – either to use to fight back or to trade – and to have trial counsel with whom you have a relationship of trust, who wants to help the client get to the right result, even if it means settling along the way. A case that goes to trial is unfortunate, because it is expensive, the result is uncertain, and the only one who wins is the trial lawyer. The threat of a trial is important, and having trial counsel who is not afraid of trial is key in that. Going to trial should be a last resort.