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IP Litigators: Worth Their Weight in Gold?
Brenda Sandburg

..."It's a hot area because there's such a shortage [of lawyers]," says San Francisco Bay area recruiter Gary Davis.

The shortage isn't a new phenomenon. Patent litigation has been hot for years, and lawyers like William Lee of Wilmer Cutler Pickering Hale and Dorr, Morgan Chu of Irell & Manella and Matthew Powers of Weil, Gotshal & Manges became bona fide litigation superstars before "Internet" was a household word.

But several factors are working against firms trying to build a big patent litigation practice. Law schools pump out only a handful of graduates each year with the technical backgrounds necessary for patent law. Even with that background, it takes years to acquire the basic skills needed to run a patent case. And there's fierce competition among firms for the few with that talent.

"You can't practice IP for five years and say, 'I've got it,'" says M. Patricia Thayer, co-chair of Heller Ehrman's 80-lawyer IP litigation practice. "It is a profoundly difficult subject area that requires knowledge of esoteric areas of law and technology and the ability to try a case a nd talk to a judge."

Considering some of the amounts at stake in several recent patent cases, firms may want to consider sending lawyers back for a science degree. Among the top patent verdicts of 2006 were Hynix Semiconductor Inc.'s $306.9 million award in a case against Rambus Inc. (Daniel Furniss of Townsend and Townsend and Crew was lead counsel for Hynix, and Gregory Stone of Munger Tolles was lead for Rambus; the award was subsequently reduced to $130 million by the judge); z4 Technologies, Inc.'s $133 million victory in its battle against Microsoft Corp. and Autodesk, Inc. (Ernie Brooks of Brooks Kushman represented z4, and John Gartman of Fish & Richardson represented Microsoft and Autodesk); and Tivo Inc.'s $74 million award in a fight with Echostar Communications Corp. (Irell & Manella's Chu represented Tivo, and Morrison & Foerster's Harold McElhinney represented Echostar).

"There's no end in sight," Stern says, "We're in a technological era of remarkable invention and market consolidation. Given the confluence of these factors, I can't see how IP in copyright, trademark and patents will diminish."

In 2001 Medinol Ltd., an Israeli company that manufactures coronary stents, sued Boston Scientific Corp., claiming theft of its stent technology. The company hired Cravath, Swaine & Moore -- not your typical IP player -- to handle the case. By September 2005, Boston Scientific had paid Medinol $750 million to settle the case, and a loyal Cravath client was born. (Partner Rory Millson led the case for Cravath.) Cravath has since handled another major Medinol patent suit against Guidant Corp., as well as several other litigation matters. Cravath has found one of the advantages of patent litigation: It can throw off a good deal of additional IP work. Companies invest a lot of time in educating outside counsel about their technology, so if they are successful in one case they are likely to get hired for future patent cases. Such familiarity with the company's technology "is one of the considerations for which firm we select," says Tom Burt, Microsoft's deputy general counsel for litigation.

The fact that Cravath appeared in the middle of a patent case also signals that elite Wall Street firms are tuning in to IP. That's a far cry from a decade ago when such cases were almost exclusively the province of boutiques and a few forward-thinking general practice firms like Morrison & Foerster and Heller. Cravath continues to score. Partners Evan Chesler, Richard Stark and David Greenwald are leading a case for Bristol-Myers Squibb Co. and Sanofi-Aventis against Apotex Inc. over its generic version of the heart drug Plavix, which had sales of nearly $6 billion in 2005.

But firms with little experience in patent and other IP matters should be careful. As The American Lawyer's sibling publication IP Law & Business reported last June, some of New York's leading dealmakers -- including Shearman & Sterling and Davis Polk & Wardwell -- have had trouble hiring and keeping patent litigation laterals. They aren't alone. Morgan, Lewis & Bockius had trouble keeping litigators after it acquired the 35-lawyer New York patent boutique Hopgood Calimafde Judlowe & Mondolino in 2001. At least 30 members of the group left the firm in 2005, in part because the Hopgood group was placed in the litigation practice rather than the IP practice, and turf wars developed. Partner Craig Opperman says Morgan "has learned whatever lessons there were to learn" from the Hopgood group's departure. The firm has since tweaked its firmwide management for IP lawyers. Last year Morgan Lewis bolstered its IP ranks somewhat with the acquisition of 10 lawyers from Do rsey & Whitney after Dorsey closed its San Francisco office. The group, primarily patent prosecutors, had previously been with the patent boutique Flehr Hohbach Test Albritton & Herbert, which merged with Dorsey in 2002.

"There is a real challenge finding the right people and getting them to move," says Morgan Lewis patent litigation partner Craig Opperman. Opperman, who had been at Cooley Godward before becoming general counsel of OpenTV Corp., joined Morgan Lewis in 2004. The following year the firm recruited Daniel Johnson from Fenwick & West and David Bohrer from Dechert.

Keeping a patent litigator happy is not necessarily an easy task. Leora Ben-Ami, a rainmaker who jumped from Clifford Chance to Kaye Scholer in 2003, says she "wanted to go to a firm that understood what patent litigation was all about. A lot of general practice firms consider it to be like any litigation." Ben-Ami's jump coincided with a period when partners were fleeing Clifford Chance's U.S. offices, but her point about being understood is one echoed by several patent litigators.

"I can't overemphasize the importance of atmosphere for people who come here," says David Francescani, managing partner of IP firm Fish & Richardson's New York office.

Ben-Ami is typical of patent litigators. She has an undergraduate biochemistry degree and started a Ph.D. in the subject before a switch to law school. The science background was a natural fit for patent work, which often requires the ability to understand and explain complex technology. Ben-Ami has carved out a strong practice, representing pharmaceutical and biotech companies like Genentech, Inc., and Pfizer Inc. She's currently defending Hoffmann-La Roche Inc. against an infringement suit brought by Amgen Inc. over Amgen's erythropoietin anemia drug. (In 2003 Ben-Ami was among The American Lawyer's 45 Under 45.)

Kaye Scholer made an impression, Ben-Ami says, because it understood the need to have a number of lawyers with technology expertise, and it invested in technical advisers to assist them on cases. "It's important when you have big cases -- it's not about one or two partners or associates -- that there's a number of people that can hit the ground running," says Ben-Ami. "Kaye Scholer had the infrastructure and mind-set to deal with these cases."

Building such an infrastructure requires top-notch science grads. But just try finding them. "It is hard to find world-class lawyers with tech degrees," says Harold McElhinny, the head of Morrison & Foerster's IP litigation group. Mark Flanagan, a partner at Wilmer, says his firm has found it difficult to find lawyers with tech degrees since they are gravitating toward IP-centric shops whose ranks are filled with scientists.

Recruiter Anna Tsirulik, of Major, Lindsey & Africa, says firms are to blame for not having enough lawyers with computer, biology and other tech degrees. The problem, she says, is that firms continue to recruit from the same exclusive group of law schools. Law is usually a second career for those with science degrees, she says, and they often go to night school or to a school such as Benjamin N. Cardozo School of Law or Hofstra University School of Law, both of which have a tuition that's lower than that of an Ivy League school like Yale or Harvard.

But firms can rely on lawyers and staff outside their trial team to navigate the technology in a given case. Patent prosecutors, for instance, can help out. Unfortunately for a number of general practice firms, patent prosecution has been eliminated. (Prosecution work is not as profitable as litigation and can be done more cheaply by boutiques.) That was a mistake, some patent lawyers say. "I'm convinced it's absolutely critical for the best firms to have basic scientific and engineering expertise in-house," says MoFo's McElhinny. "Among other things, they help litigators make persuasive and winning arguments," provide strategic options in a case and help bring in clients.

Latham & Watkins has never had a patent prosecution group, but two-and-a-half years ago began a campaign to recruit young lawyers with tech degrees. It held IP seminars at the top 12 law schools it recruits from, and last year it brought in 25 new associates with technology backgrounds. Latham also hired a nonlawyer IP technology analyst to help its IP attorneys with pending litigation, such as Symantec Corp.'s patent infringement/trade secrets case against Microsoft. "I wish I had a bunch more of him," says Robert Steinberg, chair of Latham's 230-lawyer IP litigation department. Steinberg wouldn't divulge the tech guy's name -- he has a Ph.D. from the California Institute of Technology -- saying with a chuckle that he feared competitors would try to steal him away. Steinberg expects that the technologist will eventually run his own department at Latham.

Other firms have been using nonlawyer tech specialists for years. MoFo, for example, has about 15 on staff, Kaye Scholer has about 10 and Fish & Richardson's New York office has five.

Firms may be able to find experienced people to help fill in the gaps with technology. But it's not so easy to find a patent lawyer with trial know-how. A trial background can trigger a frenzy when talent comes on the market.

In February 2003, veteran patent litigator Stephen Korniczky and his fellow partners in San Diego were looking for a new firm after the collapse of Brobeck, Phleger & Harrison. Forty firms came calling. Several took turns pitching Brobeck associates in the firm's six conference rooms. Others showed up without an appointment, strolling through the halls hoping to catch attorneys at their desks. Brobeck partners meanwhile had a whirlwind of meetings off-site. One Silicon Valley firm flew Korniczky and his colleagues to San Francisco, where they were wooed at a luxurious restaurant overlooking the city skyline. "It was an incredibly surreal experience," says Korniczky. The group went to Paul, Hastings, Janofsky & Walker, and he is now chair of its gl obal IP litigation practice.

James Elacqua, who headed Brobeck's IP group in Silicon Valley, was approached by 27 firms in the months before Brobeck dissolved. He and his team jumped to Dewey Ballantine, and then last year he and 13 other lawyers defected to Dechert. Elacqua says he was won over by the firm's strong management team and mix of financial services, technology and pharmaceutical clients. The move to Dechert spurred even more interest in Elacqua. The day he started work, four recruiters called, as well as an in-house lawyer, asking if he'd consider leaving.

It's rare for such a big group to be available, so it's understandable that the Brobeck teams were like catnip to law firms. Paul Hastings was able to steadily grow its IP group after it acquired 35 lawyers from Brobeck's San Diego IP team. Korniczky says the firm looks for partners who are team builders and can help the firm go after clients in a specific industry. It hired five patent litigation partners last year, each of whom brought five or six associates with them: Joseph O'Malley, Jr., and Bruce Wexler from Fitzpatrick, Cella, Harper & Scinto; Robert Masters from Sughrue Mion; and Lawrence Gotts and Michael Bednarek from Pillsbury Winthrop Shaw Pittman. O'Malley and Wexler represent life sciences and pharmaceutical companies, a client base Paul Hastings is seeking to expand and strengthen the firm's IP presence in New York. Masters, Gotts, and Bednarek add depth to the Washington, D.C., office and provide additional clients in Japan and China.

With all of the competition for laterals, a few firms are trying to find ways to grow their practices organically. Wilmer is primarily building its force with associates coming up through the ranks. The firm has 150 lawyers with technical degrees and 75 litigators who spend more than three-quarters of their time doing patent litigation. Lee, the firm's co-managing partner, says Wilmer now mostly hires patent lawyers out of school or from clerkship positions. "We're pretty stingy on making lateral partner offers," he says. "We have a lot of terrific young people coming through the pipeline, so we try not to crowd the playing field." One of its few lateral hires was Mark Flanagan, who jumped from Wilson Sonsini Goodrich & Rosati last year to help Wilmer build its Silicon Valley office, which opened in 2005. A former federal prosecutor, Flanagan had his own firm before joining Wilson and plenty of trial experience.

The trick will be keeping all of those associates. Elacqua, for example, says senior associates can lateral or spin off their own small shops. He's says this has been particularly true in Texas, a plaintiffs-friendly venue where they can tackle contingency cases for patent enforcement shops. He says he lost one of his associates, Dean Munyon, to Austin's Meyertons, Hood, Kivlin, Kowert & Goetzel. "Every time this happens, it leaves a hole," Elacqua says. "You need expertise at every level."

Pitcock at Kasowitz is finding that out himself. Along with veteran patent litigator Lawrence Goodwin, he is trying to build the practice group, which now includes one special counsel and two associates. In addition to the JDS work, they represent software company Modern Creative Services, Inc., in a trade secrets case against Dell Inc., and optical equipment maker Harmonic Inc. in a patent matter. They are also representing two of Kasowitz's existing clients, Adelphia Communications Corp. in litigation relating to its bankruptcy proceedings, and Celanese Ltd. in an infringement suit against Millennium Petrochemicals, Inc. Their experience shows it's not too late to join the crowd clamoring for IP cases. "We're looking to hire," Pitcock says. "We need more people to do the work." So does everybody else.

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