Lott & Fischer is an intellectual property law firm in Coral Gables, Florida. The firm concentrates its practice exclusively in intellectual property law, including U.S. and international patent, trademark, copyright, unfair competition, Internet, and entertainment law and related litigation.

Resources > Articles > How to "Win" in Mediation of Intellectual Property Cases

By Leslie J. Lott

The concept of "winning" in mediation sounds like a contradiction in terms. The concept of winning or losing is an adversarial concept, an "all or nothing" idea. Whereas, mediation is a settlement negotiation, not a contest. The theory behind mediation is that there can be a "win/win" situation, with both parties getting, if not everything they wanted, at least what they needed to have - and both ending up with at lease a relatively satisfactory result. So, how do we even begin to think in terms of "winning" a mediation.

To paraphrase our esteemed president, it depends on your definition of the word "win".

*Ultimately, winning in litigation is obtaining the best possible result for your client - while doing the least possible harm to your client - under all of the surrounding circumstances you are facing in connection with the particular dispute.

By the way...You were also promised a discussion of ethics considerations... If you keep that in mind...That the objective in litigation, the way to win in litigation is to get the best possible result for your client under the circumstances- you will go a long way toward resolving any ethical dilemmas

Basically, the only other thing you have to remember is not to lie, cheat or steal or tolerate that conduct by others.

If you view the objective of litigation as obtaining the best possible result for your client, then you will also view mediation not as an end or objective itself but as a means to the objective. *

Mediation is only one of many tools that we have to try to get the best end result. In many cases, it may not be the best tool. There are situations, for example, active counterfeiting, in which mediation will not do any good at all, and may actually cause harm, by giving the bad guys more information than you want them to have or the opportunity to destroy or conceal evidence.

There are other situations in which mediation is not necessary, because counsel, or even the parties themselves can simply work out a resolution without the input of a neutral to preside over the settlement discussions.

But in most intellectual property cases, mediation is a highly effective mechanism to resolve disputes early on, before the parties become too intrenched or bitter, before there has been a tremendous expenditure in attorneys' fees and before significant damage is done in the marketplace.

But, if winning is getting the best possible result, and mediation is the tool to use to get there, how do you make certain that you "win" or get the best possible result in mediation?

* The answer is really very simple, as with every other aspect of litigation, the way to win is through preparation... being certain that you, your case and your client are fully prepared to get the most out of the mediation

That is really what we are going to talk about - the preparation for mediation, what factors do you take into account, and how do you approach the difficulties that appear in every dispute situation

Who/what/where/when/why?

Who are the players ?

What is mediation and what can result from mediation?

Where are parties in relation to each other?

When will mediation be optimal?

Why are we here?

This is going to be the New York Times presentation on mediation, the who, what, where, when, why... and not necessarily in that order

* Who are the players?

You need to understand the various personalities and how they fit together, who are the parties, both the clients and the individuals who are actually responsible for decision making in the context of litigation and who has decision making authority when it comes to settlement. What is the attitude and the background of counsel? And the mediator, what characteristics are you looking for in a mediator

* There are actually several whats...What is mediation? What happens in a mediation? What kinds of situations are you likely to encounter? And what kinds of results can you expect or work toward?

You also need to know what is your client's objective. If winning is getting the best possible result for the client, what is the best result as far as your client is concerned? You need to evaluate what are the client's business objectives; to realistically evaluate the likely cost of litigation; and the likely result and the potential downside to the client...You need to have that unpleasant discussion with the client about the "doomsday scenario".

* I am fudging a bit on the "where" ...I am not talking about geography, although geography can certainly be an element of the analysis...I am really talking about where the parties are in relation to one another...What are their respective positions in the marketplace, what are their respective positions in terms of in terms of size and resources, in terms of understanding of the process, sophistication in understanding the law and the degree of sophistication in understanding litigation and the costs, the time required and the dedication of resources to the litigation.

* the "when" is at what point in the litigation will mediation likely be most fruitful. The bottom line is that you want to schedule the mediation late enough that you have enough information to be able to evaluate the case and that the parties are beginning to get a feel for the cost and resources necessary for litigation - and early enough that the parties and their lawyers are still speaking with one another and not so much money has been spent that the parties feel they might as well go forward and protect their investment.

* finally, why are we here...Why are we having this discussion...Why do we even care aabout mediation at all.

Let's start there, why are we even talking about mediation?

Why are we here?

Courts order mediation

Growth in mediation across country

Mediation works

As you know, a great many of courts across the country are beginning to order parties to mediation. That is probably more than adequate reason to justify our interest. But completely apart from mandated mediation, I would like to submit to you that we as lawyers are not doing everything we can for our clients unless we employ every tool at our disposal on the client's behalf. Mediation is one of those tools and it ought to be seriously considered and evaluated right along with every other aspect of litigation strategy and every other option for successfully concluding the client's dispute.

Let's back up a bit and look at why we are hearing so much about mediation and other forms of alternative dispute resolution or "ADR" of late.

The movement toward alternative dispute resolution appears to have arisen from clients, especially large companies who realized that litigation was very expensive , hugely disruptive, slow (which, especially in intellectual property cases can have disastrous effects on a client's business and marketing, from launching new products which may infringe, or which may be accused of infringing, to putting resources into existing products which the company may not be able to protect) and on top of everything else, uncertain with a lengthy and expensive appellate process which can be utilized repeatedly in the same case.

They wanted a better, cheaper, faster way of resolving disputes and getting on with their businesses. This gave rise to organizations such as the american arbitration association and and the center for public resources , and to the movement back in teh 60’s and 70’s of putting arbitration clauses in virtually every contract.

Within the last 10 years or so, courts have increasingly adopted mediation as a better alternative to the court supervised settlement conference - and more and more courts are doing so

In fact, I attended a presentation this past spring by Bill Slate, the president of the American Arbitration Association, and he gave us some very interesting figures from his organization. The American Arbitration Association is the largest provider of dispute resolution services in the U.S. And therefore, a fairly legitimate barometer of trends.

In 1994, the American Arbitration Association administered some 50,000 arbitrations and mediations

1995 59,000

1996 69,000

1997 over 78,000

If the current trend holds for 1998, there will be close to 85,000 this year

In one 15 month period the international caseload doubled

To place the numbers in perspective, in the context of federal courts, 78,000 cases administered by aaa last year represents 25,000 more cases than the total number filed last year in all 13 federal circuit courts of appeals and it is 1/3 of all new civil cases filed in all 94 federal district courts last year

The use of Alternative Dispute Resolution in intellectual property cases in particular has skyrocketed,

Why this dramatic growth in ADR ? I do not believe it is due to court mandates, because mandated ADR would not necessarily be handled by aaa. Nor do I believe it is due to any pledge or commitment to participate in ADR that is entered into by the litigants. Anecdotal evidence suggests that companies that sign pledges to participate in ADR do not feel obligated to do so unless they independently determine that it would be in their best interests, and in many cases, the individuals on the front line, responsible for resolving disputes or for supervising litigation, are not aware that their companies have signed a pledge.

I believe that the use of ADR is growing because it works

I attended a presentation by the dean of my own law school the University of Florida - a couple of weeks ago - and he said findings have indicated that providing courses on ADR has no measurable impact on the number of cases mediated, and that having lawyers sign an oath that they will seek to mediate cases has no measurable impact on the number of cases mediated. The thing that increases the use of mediation is doing it. The largest single factor in increasing mediation is having participated in mediation....Apparently once lawyers engage in mediation - they are sold.

Mediation works.

To make it work for you, you need to analyze first, obviously the law and facts of your case, and secondly, the players involved. * So, who are the players?

Who are the players?

Client

Adverse party

Opposing counsel

Mediator

The people involved in the mediation will be yourself, your client, the adverse party, opposing counsel, and the mediator.

Client

Sophisticated/knowledgeable?

Familiar with litigation

Attentive

Time/resources to assist?

Confidence in counsel

Familiar with facts/merits

Attitude toward mediation

* Who is your client? Are you working with in-house cousel * or with a savy business person who is experienced and knowledgeable about litigation in general and about mediation inparticular. If so, this is someone who can actively participate with you in strategy sessions and in providing critical information, with a minimum of your time spent in explaining what may and may not happen and what his or her options are.

* Is your client attentive? Do you have someone who is actually paying attention to what is going on with the litigation and responding to you. * Or are you in the situation where your client's resources are just spread so thin that there really is no one available to you who is actually on top of the situation. In some cases, you will get a client who is not actively involved in the litigation because they are in denial or want you to just make it go away.

If you find yourself in that situation, mediation can be a good way to get your own client's attention. Usually, a party representative with actual settlement authority is required to attend the mediation. And at the mediation, the other side will present its case. So if there is no other way to get through to your client as to what is really at stake, the fact that the other side actually has a case, or to discuss with your client what result the client really wants to get out of the process, setting a mediation conference will ususally relquire that the client focus on the issues, * and in going through these issues and with the mediation itself, it will give your client a chance to see you in action and will help you build your rapport with the client and build the client's confidence in you. * Going through the process of preparing for and participating in a mediation, can also familiarize your client with the facts and issues in the litigation.

Adverse party

Attitude

Legitimate business dispute

Hostile/distrustful

Attentiveness

Familiar with case

Case in hands of lawyers

Ulterior motive

Business advantage

Contingency

You need to analyze all of the same considerations in connection with the adverse party, to the extent you are able to do so. * If it is possible, it is helpful to know what is his or their attitude. Is the case viewed as a legitimate business dispute, or is there ill will or hostility on the part of the adverse party. Is the other party for some reason taking the case personally?

* Is the other party actively involved in the case, or does it appear to be in the hands of the lawyers. This is important not only in formulating you own approach to the mediation, but also in the selection of a mediator. If, for example, you have reason to believe that the lawyer is not fully advising the client, you may want a mediator who is more forceful and decisive and who will be frank with the adverse party about issues his lawyer may or may not be making clear to him.

* Finally, is there maybe some ulterior motive or hidden agenda that you are able to find out about that may affect your decisions. Let me give you some examples of what I mean by hidden agendas.

Example I

There was a case in which the plaintiff was an indivudual and the defendant was a very large multinational company. The plaintiff's participation in the mediation was half-hearted at best. When the mediator spoke with the plaintiff , the plaintiff set out exactly what he claimed he wanted to accomplish, and the mediator proposed an option to him that would have met the objectives he expressed. He had no response, and he did not want to propose that option to the defendant.

The mediation did not result in a settlement, or really in any progress of the case and it turned out that the plaintiff's counsel was handling the case on a contingency basis, was in a jurisdiction in which there had recently been several large jury verdicts in business tort cases, and was just simply going to get this big company in front of a jury and roll the dice. This was not a business dispute, it was a crap shoot.

Example II

Another example of a hidden agenda was a case in which the two parties had been business competitors for years. Every time one of them came out with a new product or a new trademark the other copied it, or at least got as close to it as they thought they possibly could. Every time one of them opened in a new city, the other opened in the same city. There had been a number of lawsuits over the years, with varying results and finally, to pour gasoline on an already incendiary situation, they were both extremely religious, only one was a born again charismatic christian and the other was a very devout orthodox jew. So this was not just a business dispute - with all due respect to anyone's religion - this was a holy war

In my experience situations like these are fairly rare, but they do happen. And elements of this sort have a huge effect on how you conduct a mediation and what you can expect to accomplish.

Where?

Existing business relationships

Different trade areas

Different geographic areas

Different channels of trade

Nature of dispute

Good faith error

Deliberate misconduct

This is also the point at which you need to consider where the parties are vis a vis one another.

* Existing business relationships

The parties may have an existing business relationship, licensor/licensee, or distributor, customer, or even friendly competitors, that your client wants to preserve or to enhance.

This will affect how aggressively your client wants you to pursue the litigation. Mediation, by its nature, tends to help to preserve these relationships and can even enhance or create relationships.

* Different trade areas

If the parties operate in different trade areas, this may be a basis for resolution, or may mean that the dispute is more amenable to resolution. This is true whether you are talking about

– Different geographic areas

or

– Different channels of trade

* Nature of dispute

It is important to know the nature of the dispute and how the other side views the dispute. It may be a good faith error, it may be a good faith ongoing belief that there is no conflict,

– Good faith error

or it may be a case of

– Deliberate misconduct

This will determine how the parties are approaching the situation.

More likely, one party may consider it a good faith dispute and the other may consider it deliberate misconduct. In this case one of the things you want to accomplish in the mediation is to make certain the other party understands how your client views the situation and why. They may not agree with you, but almost always, you can at least get across your side of the story, and that will affect the other party's thinking and at least make him understand that the court just may see it your way rather than his way.

Opposing counsel

• Reasonable view of case

• Knowledge of substantive law

• Objective

– "scorched earth"

– Reasonable result

Know your opposing counsel. * Is this someone who has a reasonable view of the strengths and weaknesses of the case, both his case and your case, or is this someone who is living in a fantasy world of his own making?

* Is he or she knowledgeable of the substantive law, or do you need to use the mediation (and maybe the mediator) to educate the other lawyer about substantive legal issues?

* Is this someone who is reasonable in the objectives he or she wants for the client? In other words is this someone who wants to burn everything to the ground and then salt the farm land or is this someone whose objectives are reasonable enough that you think there realistically might be some middle ground?

Mediator

• Only party you may select

– Critical to outcome

• Credibility

• Substantive knowledge

• Temperament

* The mediator is, of course, the only one of the participants you can select, and, in my experience the mediator is critical to the outcome of the mediation.

* Depending upon your analysis of the other "who" factors, your mediator needs to have credibility, *substantive knowledge, and the temperament most likely to be able to assist you in meeting whatever objective you have set for the mediation.

By credibility, I mean the trust of all of the other parties involved. Depending upon the other players, you may need someone with seniority. If the other parties are more senior in their businesses or firms, it may be that a mediator who is too youthful would not be taken seriously enough. On the other hand if the parties are younger and more energetic or feisty, they may respect only a young, energetic litigator type. Will the parties be impressed by a retired judge? by a name or reputation? or a specific background or profile that is similar to their own? Whatever you take into account, the objective is to have a mediator who is respected by both sides or the mediator will not be effective?

Substantive knowledge is a bit of a loaded gun. There are cases in which your own case is weak substantively, where you may not want a mediator who will pick up on that too quickly. All other things being equal, however, generally, it is far preferable to have a mediator who is familiar with the substantive law. And this is particularly important in an area like intellectual property which is a specialized area that many attorneys and even judges are unfamilar with.

Example III -

In the patent context, my partner and I handled a patent infringement case once in which we represented the accused infringer. Before we even answered the complaint, we got our hands on a German patent which predated the U.S. patent we in suit, and which - line for line- disclosed exactly the same invention.

Under patent law, invalidating prior art can come from anywhere in the world. The plaintiff simply had no case. But plaintiff's counsel did not know that. The plaintiff's lawyer kept arguing that patents have effect only in the country of issue and the German patent had no effect on his U.S. patent. It was only the lawyer's lack of knowledge of patent law that kept the case going, and it was impossible for us, his adversaries, to convince him otherwise.

In a case like this, it is critical that the mediator you choose has a great deal of credibility, and also is familiar with the substantive law of intellectual property. You need someone who can explain the black letter law to the other lawyer and do so authoritatively.

The other reason it is helpful to have someone who is familiar with the field, is that they know how to resolve disputes. They know what the variables are. They know how intellectual property disputes have been resolved in the past. Concepts like an assignment and license back or registration as opposed to use of a trademark are familar to them. I have seen situations where, even where counsel are knowledgeable, a creative and experienced intellectual property lawyer has broken one impasse after another just by throwing out suggestions that had worked in the past in connection with negotiations for her own clients.

You also need to take into account the mediator's temperament. Some mediators are far more proactive than others. Some tend to be more judgmental and blunt, some more conciliatory. Not all are willing to stick with you for as long as it takes to reach a resolution. If it starts to get late, they either pack up and go home, or they just stop helping in the process. It is very important that you know who you are dealing with. Whether you have worked with them before, or gotten recommendations from other lawyers, or interviewed the mediator yourself, or some combination of those factors, you need to know who you your mediator is.

What?

• What is mediation

• Three likely scenarios

• What can result from mediation

Now to the "whats" of mediation.

* First of all, what is mediation?

* What are the likely scenarios you are going to encounter in mediation?

* and, most importantly, what should you reasonably expect to result from mediation?

What is mediation?

• Facilitated negotiation

• Tool, not objective

What is mediation?

* The simple definition is that mediation is facilitated negotiation. It is a settlement conference presided over by a neutral third party who usually has some training as a mediator, and who is there to assist the parties to reach an agreement.

For those of you who have not participated in a mediation, the usual format is a meeting in a conference room between the mediator, counsel and party representatives who have actual settlement authority. Counsel usually present a statement of their respective cases, sometimes quite formally with graphics and videotapes and exhibits, but ususally just a simple statement that more or less objectively lays out the facts and law and what they see as the end result. When I mediate cases, I generally ask counsel to conclude with the present status of settlement discussions and/or what they see as the likely settlement possibilities.

At this point it is very unusual for the parties to feel comfortable going forward together and discussing settlement. Usually, the parties separate at this point into different rooms, with the mediator moving back and forth between them working with each side individually to bring them closer together. Far more often than not, by doing this, it is possible to bring the parties to an agreement in principle, so that at the conclusion, everyone can get together again in the conference room to hammer out the details.

Just like any other negotiation, if you do not know what you want you are very unlikely to get it. * At the risk of repeating myself - keep in mind that the mediation is just simply the vehicle you use to get to where you want to go.

What are most likely scenarios?

• Optimal situation

- counsel evenly matched/knowledgable

- sophisticated clients/ someone actually in charge

- legitimate business dispute

• Worst case scenario

- vast disparity in equities

- ulterior motive

• Imbalance

- counsel

- client

- intent

Like every lawsuit, every mediation is different and each has its own personality. Each has its own set of facts, its own cast of characters and its own sets of variables. However, even giving a lot of leeway for the specifics of a given situation, there are three likely likely scenarios that, in one form or another, you will see repeated over and over.

* The first is the optimal situation this is the best case scenario for the successful mediation of a trademark case.

Counsel are more or less evenly matched. They are both fairly knowledgable of substantive trademark law and familiar with trademark practice...They both know what they are doing. They are civil with one another and professional in their conduct.

* The clients are fairly sophisticated. There is someone actually in charge, and the person in charge is paying attention to the dispute. The client or the client representative is experienced enough to be able to contribute productively, and has enough seniority or authority to be able to make decisions.

* The dispute is a legitimate business dispute. It is an honest disagreement between two businesses, not an intentional counterfeiting situation or a blatant attempt to usurp the goodwill of another.

In cases such as the optimal scenario, counsel are capable of evaluating with their clients the upside and downside of litigation. They look at the best case and worst case that might result from litigation. They evaluate the risks, and costs of litigation not only in dollars and resources, but also the need to make documents available for discovery, the possible disclosure of trade secrets or other business information, the necessity of making key employees available for depositions or other litigation-related duties, and the realistic expectations for what might ultimately result from litigation. Even if the analyses differ, the parties and their counsel are likely to agree on the range of possible outcomes and the likely court determination of legal issues.

Also, when counsel and clients are knowledgable of trademark and business issues, they are also familiar with the various vehicles that can be used to resolve disputes. For example, seeing if something can be done to get the trademarks a little further apart - like agreeing to specific typeface, colors or logo, or the addition of distinctive words or letters, or getting the goods or services a little farther apart.

There was a case in which one party provided services which were family oriented and popularly priced and the other party provided only the high-end luxury range of services. The parties might agree to separate geographic markets, in which one party agrees use the mark only on exported goods and the other party is using the mark only in the United States. Other solutions might include the many different options available with an assignment and a license back or with other transfers or ongoing agreements.

Depending upon the nature of your own practice, this is probably the most common scenario. And it most often results in a negotiated settlement agreement.

* The worst case scenario for purposes of evaluating the prospects for mediation is the situation in which there is a vast disparity in the equities of the case.

For example, the situation in which the defendant is a counterfeiter or a cybersquatter. He knew what he was doing, he did it intentionally, and there is unlikely to be a way to resolve it with him.

Another example would be a vast disparity between the parties, such as when a fairly unsophisticated individual of limited means is involved in a lawsuit with a huge company. The big company may view the suit as an annoyance and not really paying much attention to it. Or the decision makers within the company may be convinced that they are only involved in the lawsuit because they are so well known that they are a target either for misappropriation of their intellectual property or for frivolous lawsuits in which the little guy is only looking for a windfall. The individual gets his feelings hurt and is humiliated when the big guys won't listen to him and address what he sees as a legitimate grievance. In this kind of situation, the parties are so totally different in their approaches, and have so little regard for each other, that settlement is very difficult and for the situation to work out requires a great deal of finesse and sensitivity on the part of counsel.

Finally, there may be a huge disparity in what the parties want to obtain from the case. There are situations in which one or even both of the parties must take the position that they have to win at any cost.

For example, when one of the parties has absolutely no place to go in terms of room to negotiate. When the mark at issue is the corporate name and the most critical asset of the company, there is not a lot of leeway. If the dispute is over COCA-COLA, you had better be prepared to back down or dig in for a long siege.

There is nowhere to go in mediation when one of the parties has engaged in conduct that is absolutely unacceptable, or where one of the parties requires a legal determination to serve as precedent for future situations.

And we have already discussed the situation where there is an ulterior motive or a hidden agenda, which might torpedo the chances of negotiating a settlement through mediation.

* These situations are the exception rather than the rule. The most frequent scenario is the one in which the two sides are not total polar opposites, but rather there is an imbalance in the situation. This is the case in which the decisions made by counsel are the most critical to the success of the mediation because this is the case where your decisions are going to have a chance of righting the imbalance, and bringing the situation back toward the optimal scenario.

* The imbalance may exist on the part of counsel, for example, if the attorney lacks substantive knowledge of intellectual property law, he or she is not to be able to go through a realistic analysis of the case and what to expect from the case. As a result, your opposing counsel and the party may have very unrealistic views.

Worse, if counsel is really uncomfortable in the area, the most likely reaction is to be too insecure or defensive to be able discuss options or openly, for fear something critical will be given away. As a result, you are not able to really explore the options that may be available to the parties.

There may be a misunderstanding of the law that makes settlement a serious problem.

* There is also the situation where the party is uncooperative.

The party may have unrealistic expectations of what they are likely to get out of the litigation. Many times individuals hear about large awards and assume that their own case will justify the same type of award.

The client may have an unrealistic view of litigation, with no concept of how long it is likely to take, how expensive it is likely to be, etc.

* Finally, the intent factor does not have to be all or nothing either. Between blatant wrongful intent, and total innocence there is a large gray area, such as the defendant who was aware of the plaintiff's mark, but honestly thought it did not infringe, or thought the plaintiff would not mind or would not object, based on some past conduct or rational basis.

Of course, the plaintiff will never believe that infringement in unintentional, especially in a case where the defendant knew about the plaintiff's mark or surely must have known about the plaintiff's mark...until the plaintiff hears the defendant's side of the story and sees the defendant as a actual human who may well have misread the situation.

Anyway, these are the variables you are working with in setting up the mediation. These are some of the imbalances you are going to be faced with and some of the ways you can try to correct, or compensate for the imbalances.

* Now for our final "What", what are some of the possible results of mediation?

It is important to talk about this for several reasons. First of all, we think of a mediation as being successful if it results in a signed settlement agreement, or an agreement in principle, and we think of mediation as a failure if it does not. In fact, in the Southern District of Florida our local rules provide for a report to the court about whether the mediation was successful or whether it resulted in an impasse. Those are the only two options and they sound a lot like winning and losing, or success or failure.

In fact, there are a number of different advantages that can be derived from mediation.

What result?

• Negotiated settlement

• Simplify issues for determination

• Expedited/cooperative discovery schedule

• Dispute resolution agreement

– Arbitration

– Submission to expert neutral

– Other procedure

* Obviously, mediation may result in a negotiated settlement that meets the business objectives of your client. Clearly, this would be considered "winning".

But, how can you "win" a mediation in one of the situations such as the ones we discussed earlier, that is not really susceptible to a negotiated settlement..it is just simply ultimately going to have to be determied by the court?

* You make progress toward the ultimate court determination. With the help of the mediator, you simplify the issues for determination by the court. It is very possible to agree that the affirmative defenses really aren't going to make much difference, that the "tacking on use" issue is not very strong and that, at the end of the day, the only thing that will matter is "likelihood of confusion", and agree to limit your proofs to that issue.

* If discovery is an issue, or in danger of becoming an issue, agree upon the voluntary exchange of documents, proffer witness testimony, and agree upon a discovery schedule and the voluntary production of witnesses for deposition. This may sound utopian, but it has been done, and in the cases in which it is done successfully, it has saved the parties tremendous amounts of time and money.

* Another option, especially if there are undetermined fact issues which are critical to the dispute, is to agree upon an alternative form of dispute resolution which is tailor made for the parties and for the specific situation. The parties might agree for example, to submission to arbitration of certan issues, under a specific time frame. Or certain issues may be submitted to an expert neutral for determination, with the parties agreeing to abide by the decision. There are many, many different options. And if you keep the client's objectives in mind, you can tailor the options to fit the situation.

Example V

ARBITRATION CASE HISTORY

Let me share with you an experience I had with an extremely successful arbitration that I am aware of. Counsel analyzed the situation on behalf of their clients and, happily concurred that arbitration was in the best interest of each of their clients because the dispute involved a trademark of a new product that was about to be launched. The plaintiff considered the proposed new mark to be infringing. The defendant needed an answer one way or another and needed it quickly so that it could go forward with the product. In other words, in this case it was more important for both parties to have an answer, than even what the answer was.

In this case, counsel decided what the priorities were, what issues needed to be determined, and what the time frames would be. They set out a pre-trial and trial schedule and stuck with it. They selected a panel of three arbitrators who were expert in trademark law, and gave the arbitrators 10 days after the close of the trial to provide a written final judgment, providing answers to the questions they had agreed upon and guidance for the future conduct of the parties.

It worked beautifully, counsel were knoweldgeable in trademark law, they knew the issues, they knew what questions to ask, and they were able to cooperate with each other to save their respective clients time and money.

It is a little like being able to set time deadlines on a Federal District Judge:

discovery conflict - telephone resolution

motion practice - if you tell your judge you must have a resolution within 5 days, you have your answer within 5 days

trial is specially set and you are guaranteed of getting your decision within 10 days of trial

It is possible, it has been done and it was a tremendous advantage to both clients to have the decision and to have it quickly.

The point is be creative. Have in mind your best case scenario - your first choice of what you want to get out of the mediation. But be sure you have your secondarym and tertiary objectives firmly in mind also. If you cannot get your first choice, a negotiated settlement agreement, what can you get out of the mediation. Can you get some discovery you need? Can you get certain facts stipulated? If there are certain participants who are a particular problem for some reason, can you use the opportunity to educate that person, or to bring that person around, with the help of the mediator.

[ Slide 15 ]

When?

• Pre-trial

• Pleading stage

• After documentary discovery

• After deposition discovery

• After preliminary injunction ruling

• Pre trial stage

• During trial or pending appeal

Another of the keys to the effective use of any form of alternative dispute resolution is timing. Mediation, in particular, can be used effectively at any stage of a dispute. The important thing is to select the right time for the specific situation.

* Pre-litigation -

Settlement discussions prior to filing a complaint generally consist of negotiation, and possibly an exchange of cease and desist letters and responses. It is somewhat unusual to employ mediation at this stage, but there is certainly no reason why you shouldn't, and if a mediator might be helpful this is the best time to resolve the dispute.

* Pleading stage

-Sometimes it is not really possible to start discussing how to resolve a dispute until the legal issues are clearly defined. This done initially in a complaint. Once a complaint is served the issues are defined and the defendant now knows that the plaintiff is serious about the dispute and is going to pursue it.

Keep in mind that the complaint can serve that function to an extent even if it is not filed. There are situations in which we send a draft complaint to the defendant for the purposes of saying "This is what we are talking about." "This is what we are going to file if we do not hear from you."

Needless to say, you don't do this if there is a danger that the defendant will file a declaratory judgment action, especially in a foreign jurisdiction. In that case you say "This is the complaint we filed today, we will give you ten days before we serve it".

In any event, after filing a lawsuit, the issues between the parties are better defined, there is a serious dispute that now must be addressed one way or another, and sometimes the dispute is then more amenable to resolution.

** You also need to consider whether there are certain facts you have to obtain before the parties can meaningfully address resolution. For example, a case in which the first user of the trademark has not been determined, or a case that will turn on whether or not a mark has been abandoned. You have to have those facts to be able to evaluate the likely outcome of the litigation.

One other thing, we spoke about what can result from mediation. I have heard of a mediation in which, in the course of the mediation, the parties realized that they really needed the evidence of a key witness to determine who was going to have the upper hand and how the case should be ultimately resolved.

They adjourned the mediation, deposed the witness, and then came back and resolved the case.

* After preliminary injunction ruling-

Another time that you should consider mediation is after the entry or defeat of a motion for temporary restraining order or for preliminary injunction - at this point, the issues have considerably narrowed, the facts should be fairly clear and both parties have suffered some of the "pain" of litigation. Each party has seen the strengths of the other party's case and you have gotten an indication from the court as to where the court sees the equities. At this point, the parties may be more ready to talk.

* Pre-Trial

Actually the same holds true after any substantive determination by the judge - this is once again a good stage to examine the possibility of settlement, particularly if the determination has been favorable to your client.

* During trial and pending appeal

During trial, after a final decision, and before appeal, during the appeal process - again, these are excellent opportunities to discuss resolution. The trial court has made a decision, and the likelihood of success on appeal may be fairly apparent. A resolution at this point will bring an end to a process that could be ongoing for a considerable period of time, with a limited likelihood of success.

We tend to think of mediation as something to be done instead of trial. But that is not really true. Mediation is a type of settlement conference and any time settlement negotiations are appropriate, mediation is an appropriate vehicle to consider.

One final note on timing. I know that many of you practice in jurisdictions in which a court will send you to mediation and will give you either a date by which you must have participated in the mediation, or a date on which you have to report back to the court.

There are several things you can do to get the situation back under your control, so that you are directing your case, your own way, in the best interests of your client. First of all, you can go back to the court and request relief from the order on the basis that there is discovery you need first, or there is further information that is required in order to make the mediation more effective. And, since the objective of the court is to to have a productive mediation, not a meaningless mediation, chances are, if you can state a sound basis for the request, it will be granted.

Secondly, as we just discussed, you go forward with the mediation on the date given, but with the secondary objective of getting as much out of the mediation as you can now, but then adjourning the mediation rather than terminating it so that you leave the door open to come back at such time as it may be more productive for you.

Obviously, in both cases, whether a motion to the court to continue the mediation and maybe order discovery in the interim, or an adjournment with the option to reconvene the mediation conference, this can be done either unilaterally or on stipulation of counsel. Clearly, if counsel are cooperative, the situation is better, but it is not necessary.

When will mediation be optimal?

There is no one right answer. It depends upon the specific case and upon the client's objective. If winning is getting the best possible result for the client, you have to know what is the best result as far as the client is concerned?

In order to win at mediation - you absolutely must evaluate with your client what would be the best result in the given situation.

What is the client’s objective?

• Win at all costs

• Business advantage/retaliation

• Get back to business

• Injunction

• Money damages

• Damage control

* Win at all costs

We discussed some of the situations in which your client will have absolutely no choice but to say we have to win the lawsuit no matter what it costs or how long it takes. These are situations such as the house mark or the key trademark case, or cases of counterfeiting where there is really no middle ground and the client's very identity and sometimes existence is at stake.

* Business advantage/retaliation

There are cases in which the client is after some business advantage or wants to retaliate for some business injury caused by the defendant. This may be a valid objective. There are cases in which the defendant's business conduct has been so egregious and ongoing and usually increasingly bold and blatant that the plaintiff finally has to say "Look, we just have to bloody this guy's nose a little to get him off our backs".

* Get back to business

Frequently the defendant, and sometimes even a plaintiff, will want you to just make this situation go away so they can get back to business. You have to remember, your client's business is not lawsuits, that is our business. Your client's business is running his business, and when he is concentrating on our business, he is not doing that. This is always the case.

But, particularly in intellectual property cases, it may be necessary for the client to have a speedy resolution so that the company can get back to its business. For example, if the lawsuit is a challenge to a new product the client wants to introduce, the timing may be critical to the release of the product in the marketplace.

* Injunction

The client's primary objective may be an injunction, to stop the infringing conduct as quickly as possible.

* Money damages

It may be very important to your client to obtain money damages.

* Damage control

Or sometimes, the primary objective is damage control. For example, in a case where your client has been caught red-handed in an infringement situation, the best thing you can possibly do for them is not fight it, but to extricate them from the situation with as little cost and as little bad publicity as possible.

How?

• Be prepared

• Know your objective

• Be flexible

• Take charge of process

• Get it in writing

So, that is it, that is the who, what, when, where, why of mediation. But we left out one important interrogatory - How?

* Be prepared

First, be prepared. Do you homework, take all these factors into consideration, the parties involved, the nature of the dispute, the timing, who you want as your mediator, and really evaluate where you are.

* Know your objective

Secondly, know your objective. Know exactly what you want to get out of the mediation, and figure out the best way to do that. And the objective will be at least two-fold. Exactly what does your client need from an agreement resolving the dispute and what do you need from the mediation in the event there is not a final settlement or a settlement at this time and the litigation is going forward.

* Be flexible

Third, be flexible. Do not view mediation as a rigid set of rules, take control of the timing, be creative in what you get out of it and what you accomplish. Don't assume it is an all or nothing proposition and don't assume that it has to adhere to a cookie cutter format. It is one of your tools to use in litigation. Use it as a tool to craft what you ultimately want to accomplish.

* Take charge of process

And finally, along those same lines, take charge of the process. You decide when, you decide where, and who your mediator will be. Each of these decisions is important and each will affect the outcome.

In the actual conduct of the mediation itself. Be civil. Go in having decided with your client what you want to achieve. Where money is involved, make the first offer. Many people are reluctant to to this in the mistaken belief that they are "bidding against themselves". But actually the person who makes the first offer is ususally the one who is establishing the parameters of the negotiation and setting the base from which the parties negotiate from then on.

* Get it in writing

Finally, if you do reach agreement on settlement terms, DO NOT LEAVE THE MEDIATION until you have the agreement in writing and signed by both parties. Do not hesitate for one minute to handwrite it on a legal pad, but get the parties to sign off on it.

In a negotiated settlement the parties almost always each given up something that they really didn't want to give up. Otherwise, there would't have been a lawsuit in the first place. If you do not have a written, signed agreement, there is a high likelihood of buyer's remorse, and given the universal lawyer's proclivity to fine tune every agreement, you can be almost guaranteed that the other lawyer will come back and try to sweeten the deal and write in terms that will give his client additional advantage.