As published in the Chicago Lawyer

By Andrew Malec, Ph.D, Partner and Managing Director

As we approach year-end, our litigation support practice has seen an increasing
docket of intellectual property (“IP”) infringement matters. This
is not a surprise to us since companies are becoming more sophisticated
in understanding the value of their IP, as well as protecting and monetizing
it. We have also noticed that we are being retained on litigation assignments
earlier on in the case and being asked to perform pre-litigation
consulting services for counsel with more frequency. We anticipate both
of these trends to continue in the upcoming New Year.

IP infringement matters continue to increase. David Cupar, Chair of the
Intellectual Property Department, at McDonald Hopkins, LLC states, “In
2015, we expect to see an uptick in IP litigation, especially as it relates to
patents, trademarks, and trade secrets.” Sound economic analysis is needed
in IP litigation since the assets themselves (i.e., patents, trademarks,
trade secrets, copyrights, etc.) are, by their very nature, complex. For
example, economic damage quantification on patent infringement matters
requires an understanding of the demand for the infringed product,
acceptable non-infringing substitutes, and the ability of the patent holder
to produce and market the product. In a trademark infringement matter
with a diminution in value claim, the economic expert needs to conduct
economic analysis to determine the strength of the mark and the impact
of the diminution in value; perhaps corrective advertising is needed to
remedy the situation. As such, sound and logical economic analysis is required
along with well-thought out economic damage quantification that
can be clearly and concisely conveyed to the trier of fact.

We also notice that we are getting brought in on litigation support assignments
earlier in the litigation process. This is advantageous because we
can assist counsel with litigation strategy, discovery, and damage theory
which often leads to a well-thought out litigation strategy that works in
tandem with economic damage quantification. Cupar noted, “It is important
that litigation costs are commensurate with the economic damage
outcome. Retaining an expert early on in the process gives the litigator
options on potential damages theories, as well as measuring opposing
counsel’s damages theory.” Of course, there is a balancing act of case
management and anticipated economic damages. Nevertheless, it is not
helpful when needed documents or information cannot be requested because
discovery has ended, which can “hand-cuff” the economic damages
expert and litigator unnecessarily. It goes without saying that winning
liability with an award of zero economic damages is generally not a good
outcome for your client. Consequently, it only makes sense to understand
the magnitude of anticipated economic damages before the case is filed.

Wrapping up, as we look forward to another year, we anticipate an increase
in IP engagements, as well as continuing to be retained early in the
litigation process so as to assist counsel with litigation strategy and the
resulting commensurate economic damages.

Andrew M. Malec, Ph.D., is a Partner and Managing Director at O’Keefe.
Dr. Malec is a recognized expert in providing economic analysis and litigation
advisory services to litigators in complex, commercial litigation matters,
including but not limited to, intellectual property infringement, securities litigation,
and shareholder disputes. Dr. Malec also has significant experience
in providing valuation opinions including, but not limited to, derivative securities,
enterprise value, equity, intangible asset/intellectual property valuation,
and debt opinions for corporate planning, financial reporting, taxation,
transaction, litigation, and strategic planning purposes. Dr. Malec can be
reached at amalec@okeefellc.com.