LAW OF COMPUTER TECHNOLOGY FALL 2015 © 2015 MICHAEL I. SHAMOS Lawsuits Michael I. Shamos, Ph.D.,...

LAW OF COMPUTER TECHNOLOGY FALL 2015 © 2015 MICHAEL I. SHAMOS

Lawsuits

Michael I. Shamos, Ph.D., J.D.Institute for Software ResearchSchool of Computer ScienceCarnegie Mellon University


Motivation for Technology Lawsuits

• Win money• Stifle competition (legally)• “You bet your company”• Cause financial hardship• Scare your enemies• Acquire a reputation for litigiousness• Prove a point• Defend a bad business decision• Achieve “justice”


Should a Lawsuit Be Filed?

• Costs are extremely high• A patent lawsuit rarely costs less than $2 million, often

$10 million• The plaintiff can always drop a case; the defendant

cannot• What countersuit may be filed?• What effect will this have on investors, stock price,

financial statements?• If we win, can we collect?

Phases of a Lawsuit• Pre-filing

– Demands, negotiation, preparation– Who should be sued?– Where (in which court) should the case be filed?– What relief should we ask for?

• The lawsuit itself– Long, complex, expensive activity

• See docket in Apple v. Samsung

– Settlement negotiations• Post-trial activity

– Motions, request for new trial– Settlement negotiations– Appeals

http://euro.ecom.cmu.edu/program/law/08-732/Lawsuits/AppleSamsungDocket.pdf


The Civil Litigation Process

1 2 3 4 5Pleadings | Discovery | Motions | Trial | Post-Trial

1. Set out the legal problem in writing. File with court, serve parties

2. Learn the underlying facts of the case, hire experts

3. Simplify the issues by asking the court to rule on various claims, restrict testimony, etc.

4. Present facts and opinion testimony to the “trier of fact” (judge or jury)

5. Ask the court to reconsider or modify the verdict. Appeal to a higher court, if necessary.


Federal Rules of Civil Procedure

• Rules enacted by Congress specifying how federal civil lawsuits are conducted

• Rule 1: The rules “shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.”

• Construing rules is so important there is a whole series of cases devoted to it, reported in Federal Rules Decisions, abbreviated F.R.D.


Discovery

• Determining facts and opinions relevant to the lawsuit

• Purpose– Promote settlement– Eliminate surprise at trial – Narrow the issues for trial


Scope of Discovery

“Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. … Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

F.R.C.P Rule 26(a)

http://euro.ecom.cmu.edu/program/law/08-732/Lawsuits/Rule26.pdf


Discovery Tools• Interrogatories

– Written questions to parties; written responses under oath, e.g. “State the names of all programmers who worked on coding the intrusion detection system.”

• Requests for Admission– Statements of fact or opinion to be admitted or denied

in writing under oath, e.g. “Admit or deny that you operate a server farm in Kansas.”

• Requests for production– “Produce for inspection and copying the source code

to the encryption module.”


Discovery Tools

• Depositions– Oral questions under oath, outside of court, but transcribed by a court

reporter. Usually videotaped for later use in court– Lawyers for all parties present. One lawyer “takes” the deposition,

i.e., asks the questions– Witness (the “deponent”) may have his own lawyer who “defends” the

deposition, raises objections– Witness may be commanded to bring documents and things to the

deposition, e.g. “All documents in your possession relating or referring to the software at issue in this case.” (“subpoena duces tecum” = “you shall bring with you under punishment”)

– Objections are stated and recorded– Witness reviews the transcript later for correctness AND may change

answers


Purpose of Depositions

• Learn facts and opinions• Learn what witnesses have to say• Explore their depth of commitment to a statement• Pin witnesses down to a position or statement that

they will not be able to change later at trial• Study their demeanor

– Will it be easy to shake or discredit them at trial?

• Some deposition statements are binding on the party whose witness is being deposed


Abuse of Discovery

• Discovery requests must be complied with unless a court orders otherwise

• Discovery is sometimes used (improperly) to cause a burden and expense

• The requestor hopes that the recipient will not comply, giving an excuse to have the case dismissed

• This rarely works• Here is a burdensome request for production


Initial Disclosure – Electronic Discovery

• “a party must, without awaiting a discovery request, provide to other parties: …(B) a copy of, or a description by category and location of, all documents, electronically stored information, and tangible things that are in the possession, custody, or control of the party and that the disclosing party may use to support its claims or defenses” F.R.C.P. Rule 26(a)(1)(B)

• “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” F.R.C.P. Rule 26(b)(2)(B)


Sanctions for Failure to Comply

• WEAK: Mosaid Technologies v. Samsung– “negligent destruction” of emails– Jury invited to decide if the missing emails were

“unfavorable”• MEDIUM: United States v. Philip Morris

– “reckless disregard” for deleting email in contravention of company policy. $2.75M fine and no testimony allowed from violators

• STRONG: Metropolitan Opera v. Union Local 100– purposeful destruction of emails/repeated lying about

discovery– judgment entered against the defendant


Major Ideas

• Litigation is long, expensive and complex• Its outcome is uncertain• Everyone is better off (except the lawyers) if the

parties settle• Litigation is regulated by procedural rules that must be

followed• Sound litigation strategy is essential


QA&

• Complaint– Formal court filing naming a defendant & requesting relief

• Service– Formal notification (summons) to the parties that they have been sued and must answer

or face consequences

• Answer– Formal court filing responding to the complaint, adding any claims the defendants have

• Affirmative defenses– Assuming the pleadings are true, we’re not liable because …

• Motion to dismiss– Ask the court to terminate the case before it starts


2-4 months



• The longest and most expensive part of a lawsuit– Learning facts necessary to try the case

• Written requests• Oral testimony• Subpoenas to non-parties• Bitter disputes over production of documents


6-18 months


• Once the facts are known, the scope of the dispute can be narrowed

• If no factual dispute, “summary judgment” by the court

• Parties move to eliminate or restrict claims or defenses, limit evidence, e.g.– “The ISP safe harbor defense is precluded because the defendant is

not an ISP”

– Judgment of non-infringement on Patent 5,793,028 because the required element of a “public identification code uniquely identifying the transaction or computer” is not present in defendant’s system


3-6 months

• Usually the shortest part of a lawsuit

• Presentation to judge or jury of the facts needed to establish a claim or defense

• Opening statements

• Testimony of witnesses– Direct examination, cross-examination, re-direct– Objections

• Closing arguments

• Instructions to the jury

• Verdict


1-30 days



• Motions to set aside or modify the verdict• Motions for reconsideration• Appeals

– First appeal as of right– Subsequent appeals usually by petition

• Retrial• Enforcement of judgment• Each party usually pays its own attorneys fees in the U.S.

Important exceptions: copyright and some patent cases


6-36 months

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