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Arbitrating the Patent Case Part XVIII: Presenting Testimony at the Hearing


We have previously had a look at many aspects of arbitrating patent cases, beginning with the type of cases likely to be arbitrated, arbitration clauses, and the arbitration process up to the hearing.  We then began looking at the hearing itself, beginning with sequestration issues that can arise, opening statements, and case organization.  We went on to presenting documents on the hearing, including the positives — and pitfalls — of electronic document presentation as well as some observations on how most arbitrators actually use documents during the hearing and decision-making process.

We will now take a look at presenting testimony at the hearing.

TranscriptsFirst, an observation on having a transcript of testimony.  Most arbitrators I know would prefer to have a transcript if possible.  Most arbitrators, like most lawyers, are quite gifted note takers, having had decades of practice.  But notes often are not a perfect substitute for a verbatim transcript on closely contested issues.  The transcript gives everyone a way to be very precise about what the testimony was.

But most arbitrators are also committed to trying to keep costs down if at all possible, so it is unlikely that an arbitrator will ever insist or even suggest it is necessary that the parties bear the additional costs of a transcript.

So when is a transcript worth the cost?  Here is one way to think about it.

Many patent arbitrations are very document heavy so that the real evidence is in the documents.  In most patent cases, much of the key evidence is found in the patents, prosecution history, technical information about the involved products, financial documents, and the like.  While explanations and discussion of these documents and the issues raised by them in testimony is important and may even be critical, a verbatim transcript of what was said may not be necessary or worth the price.  The details are in the documents.  A transcript could  be overkill.

Occasionally, however, a case can turn on the testimony itself, particularly where the documentary evidence is lacking and personal accounts are critical.  If your case is likely to turn on that kind of information, then a transcript is likely worth the price.  This is particularly so if there is a great deal at stake that helps justify the added expense.

Presenting the testimony.  Let’s turn now to presenting witness testimony at the hearing.  Of course, as in any hearing the testimony will be under oath and subject to cross examination.  Because of the relative informality of the proceedings, it will be tempting to lead the witness to save time.  Avoid the temptation.  It simply is not as persuasive to ask the witness to agree to what the lawyer states as it is to elicit real testimony.  The arbitrator already has a pretty good idea what the lawyer would like the witness to say.  The real question is what the witness actually knows, not what he or she will agree to.

Because the rules of evidence in arbitration are relaxed, it may be tempting to take advantage of that and elicit hearsay and other testimony that would never be allowed during a court proceeding.  But be careful. Don’t confuse the ability to get evidence “into the record” with the persuasiveness of the evidence.  While most arbitrators will allow hearsay and the like because the arbitration rules allow it, the evidence is always taken subject to later reflection and study of the persuasive effect of the evidence.  Rank, unreliable hearsay is rarely persuasive and likely won’t advance your cause. Indeed, that a party may be willing to stake its case, at least in part, on such evidence may be detrimental to the integrity of the case as a whole.

Expert reports as direct testimony.  One technique that has gained some sponsorship over the years is the use of the expert’s report as the direct testimony of the expert. This has some advantages.  There is, for example, no question whether the expert’s testimony is straying from the opinions stated in the report because the report is the testimony.  Presumably it also saves time to use the report as testimony, because the arbitrators will have read the report in advance.

While originally enthusiastic about this approach, I am no longer a fan of it.  Part of what we are doing with testimony – and why we don’t just decide everything on written submissions – is gauging the expertise and trustworthiness of the expert.  Only observing testimony allows one to do that.  Perhaps most importantly, having the expert summarize what in the opinion is most important helps the focus the inquiry and pinpoints the most important aspects of the opinion and ultimately the issues in dispute.  Testimony that is given with the understanding that the arbitrators will have the report, but also with emphasis given to the most important points, is the best way to proceed, in my judgment.

Written witness statements.  I have a similar view on  presenting direct testimony of lay witnesses in written witness statements that are then subject to cross examination.  One simply cannot gauge the knowledge or veracity of a witness without listening to the witness’s testimony.  Indeed, we all know the statements are typically written by the lawyers, so it is as though we are simply asked to reread the facts section of the brief again.  In fact, it strikes me as a little unfair to meet the witnesses only on paper when they are telling their side of things, and first meeting them as speaking human beings only on cross examination.  Cross examination tends not to bring out the best in most people.

Next upPost hearing briefing and closing arguments.


Arbitrating the Patent Case Part XV: Opening Statements


Earlier articles in this series explored various aspects of arbitrating patent cases, beginning with the type of cases likely to be arbitrated, arbitration clauses, and the arbitration process up to the hearing.  We then began looking at the hearing itself, beginning with sequestration issues that can arise and suggested an approach to avoid problems with sequestration.

We now arrive at the beginning of the substance of the hearing:  opening statements.  Should you make an opening statement?  If so, of what sort?

Should you open?  

It is not unusual to waive openings at the arbitration hearing.  After all, you are trying to be efficient and make good use of time.   In a patent arbitration, the parties have almost certainly filed detailed pre-hearing briefs.   You may have already done a Markman hearing and gotten a claim construction decision.  So why would you spend the time and energy preparing and presenting an opening?  Why not just get on with the evidence?

Skipping the opening may be appropriate in some arbitrations, but I would suggest that you be very careful in foregoing this chance in a patent arbitration.  Like anyone else, arbitrators appreciate someone who can clarify the dispute and define exactly what issues they are being asked to decide.  An opening gives the advocate a chance to do that.  First impressions count with everyone, and this is time that can be used to make a good one.

Because arbitrators are professional decision makers, trained and skilled in carefully analyzing facts and law and reaching the right decision, first impressions may not be as important.  But why waste an opportunity to make it clear that you have mastered the facts and law and can efficiently outline what you will be proving?

And, of course, there is no better way to prepare for the hearing than figuring out just how you will explain your case in a succinct way.  It forces you to deal with all the key issues and facts in the case.

What kind of opening?   In constructing your opening, you will want to keep in mind your audience and purpose.  In a patent case, your arbitrator will normally be a lawyer very familiar with patent law and patent issues.  This means you can explain the case with a fair amount of sophistication.  You don’t need to explain what a patent is, how it is like a legal description that provides the boundaries of the intellectual property much like the boundaries of real property and all the things you would normally tell a jury or judge new to patent matters.

Instead, think like an arbitrator. What would you want to know about the case that you are being asked to decide?  Thinking that way will likely lead you to (1) explain what exactly needs to be decided, (2) identify the key evidence you will present so that those decisions should be in your client’s favor, and (3) explain why those decision are fair.  Let me elaborate on this a little.

Issues to be decided

Although the briefs will certainly lay them out, how you describe the real issues for decision is critical.  The emphasis that you can give the key issues in person is different than you can do in your brief.  That’s why we have hearings instead of just deciding everything based on written submissions.  When you are done with your opening, the arbitrator or panel should have a very good idea of what issues you are expecting will be decided.  They probably will have them numbered in their notes.

The key evidence

You will also want to emphasize the key evidence that will support a decision in your favor.  All evidence at the hearing tends to come in as if it is all equally important, one question and answer at a time.  But, of course, some evidence is the key to a decision once the preliminaries are established while the rest is just background.  You want to allow the decision maker to easily fit what is being presented at the hearing into the framework you have presented.  Thus, you want arbitrators to be able to say to themselves, “Yes, I remember, this is the evidence that I was told at the beginning would be one of the keys to deciding the case.”

If there is key evidence you know your opponent will raise, you will likely want to begin to deal with it.  If they are going to say your client’s patent is obvious over two prior art references, you’ll want to explain what is missing or that your expert will explain why no one skilled in the art would combine them except with the benefit of hindsight, or whatever your position will be.  You will want to make it clear you have not only identified the evidence that will allow you to win, but have thoughtfully considered the opposing points of view and will deal with them.

A fair result

You don’t want to ignore the justice of the result you are asking for. Arbitrators are not robots applying some sort of legal algorithm to reach a mandated result.  To be sure, the law must be carefully considered and fact-finding must be carefully done.  But arbitrators, like anyone else, want to arrive at a fair result.  To be sure, that result is informed — and often dictated in large part — by the law and careful analysis of facts.  In the end, however, every decision maker is hoping to arrive at a just result.  Give them the information and perspective that will help them do that.

Keep it brief

This is not to suggest that your opening will do all these things in great detail and last for hours.   In most cases, you would like to open in about half an hour or less if you can.  Shorter and memorable is better.

Thus, a framework should be just that: something to give the arbitrators a place to “hang” the evidence you are presenting.  You will not describe in detail each important document and each important piece of evidence.  You don’t have time. But you can emphasize, for example, that Exhibit 27 is the letter sent on May 13, 2013 by respondent’s chief engineer to claimant admits that the respondent’s device does in fact include the element of claim 2 of the patent now under consideration, despite what they say today.  Or whatever it may be.

Generally, infringement disputes get down to one or two elements that likely cut across a number of claims.  Organize your explanation in a way that makes it easy to follow.  If you are defending, you will want to, for example, explain the “dataflow”  (mentioned in a hypothetical in our last article) limitation in independent claims 1, 5 and 13 of the software patent at issue rather than have a listing of claims and an explanation of the various missing elements of each.  Your framework should be efficient.

I can’t tell you here what the fairness and justice attributes of your case will be, but you must have some.  No one brings a case or decides to defend it without some underlying sense that the opponent has done or is asking for is unfair.  It may be as simple as breaking a promise to pay license payments.   Or it may be much more complex, arising out of the parties’ relationship or other matters.  It all will depend on your case.  You don’t need to dwell on fairness, but don’t ignore it.  Decisions on close issues can often turn on simple fairness.

Of course, in a patent matter, fairness is all viewed through the lens of the specific application of patent rights and principles, all of which will be well understood by your decision maker, the arbitrator.

Next up.  The hearing continues.