The IP Litigator

The Other Dimension:
Managing Public Communications in IP Litigation

by Richard S. Levick

Each new intellectual property case that winds up on the front pages of major newspapers, or even on Prime Time television, provides fresh and powerful evidence that communications strategies are increasingly critical components of case management. If not the outcome of a case, public perception in the aftermath of litigation now has lasting effects on the client’s brand and its business objectives, to an extent unimaginable even a decade ago.

Once it was the occasional case, like Napster, that necessitated media and communications strategies equal in importance to the litigation strategy itself. Such cases are now steadily increasing as the mere mention of the names Blackberry and e-Bay suggests. If, as we suspect, many lawyers still minimize the communications dimension – perhaps because a case won’t be decided by a jury so there’s no jury pool to influence, or because IP lawsuits devolve on technical points that most audiences presumably don’t understand or care about – they are disserving and, in fact, endangering their clients.

Such myopia completely overlooks the public’s vital stake in IP litigation of all sorts. The importation of generic drugs that infringe or threaten pharmaceutical companies certainly affects mass audiences at a very personal level. So does the prospect of losing Blackberry service, not to mention the loss of jobs that may turn on a judge’s decision in an IP case.

Even when they do not have a direct stake, audiences may instinctively side with a plaintiff if the plaintiff is an individual or small business suing a Fortune 500 company for infringement; if, in other words, the litigation pits David against Goliath.

And, if a case is of only indirect public concern, or if its soporific technicalities reduce public interest, stock analysts may still be closely following its development. Plaintiffs’ attorneys or other special interests may see vulnerabilities and new opportunities to go on the offense. Public officials may decide to take action related to the litigation.

It is indeed simply foolhardy not to make as professional assessment as possible of every serious lawsuit from a standpoint of public perception and brand preservation. The assessment may lead to a conclusion that exposure in the Court of Public Opinion is minimal, but the assessment should at least be made.

Our purpose here is to discuss the public dimension – that “other” dimension – of IP litigation from two perspectives.

First, what are the elements of that crucial communications assessment, and how can it be institutionalized as a component of case management?

Second, how are these assessment and implementation activities specifically relevant to different categories of intellectual property litigation?         

I. A Framework for Assessment

To institutionalize activity, formalize it. Especially with something like media relations, the tendency – particularly among many lawyers who don’t take the public communications challenge seriously enough in the first place – is to wing it, or to grapple with a media problem or challenge last-minute. Putting something down on paper well ahead of need makes it both real and exigent, thus integrating media as a discrete part of case management at the earliest stages. 

Below we offer a template that should be tailored to the needs of each litigant, and that can serve as a tool by which to ensure that the initial communications assessment is indeed made. We should caution in advance, though, that there is also danger in creating such a template. In fact, it can accomplish the opposite of what it is intended for if – as so often happens with formal “plans” of one sort or another – its mere existence offers the specious assurance that things are being handled and a solution exists simply because something has been written down.

A good rule of thumb is to therefore spend under an hour on the template. Quickly run through the answers to determine if there is exposure. If so, then call in professional media assistance.

As such, the template must never be an end in itself, but rather a basis for determining next steps. It must generate specific action points for executives, lawyers, and communications advisors. Otherwise it’s useless.

a. Assess

Under “Assess,” there are four critical considerations that comprise the assessment stage proper. On the one hand, the intelligence-gathering process encompasses all objective facts needed to frame the communications strategy going forward. On the other hand, with any communications strategy, the initial assessment must go beyond the fact patterns likely to play out in court in order to identify the audiences, along with diverse subjective and emotional dynamics that may affect the campaign outside of court.     

Nothing is more crucial than to determine the audience – additionally crucial in light of the tendency we’ve surmised for IP litigants to assume that with, say, a complex patent lawsuit, there is no actual audience other than judicial fact-finders and decision-makers. A formal assessment process allows for the kind of disciplined thinking that will correct this potentially fatal misconception early on. It forces case managers and their communications advisors to identify the analysts or the special interests or the public officials who may be critical observers of the litigation – and not just “analysts” or “public officials” as a genus, but specific individuals within such categories.

Once we begin to assess the subjective and emotional factors that can affect perception, we take a giant stride toward understanding the case in its full economic or even political consequences. The assessment should put to final rest the myopic assumption that an IP case is wholly bound by technical detail, of interest only to those who understand such detail. Subjective factors may include the aforementioned sympathy for an underdog, or they may be driven by the personalities of high-profile individuals, inside and outside the company, who can sway response to a corporate position for better or for worse.

Marketplace perception, irrespective of the results obtained in court, is decisively affected by the assessment and handling of these subjective factors. Just ask the music industry if such factors were important in its campaign against Napster, or if there were compelling case-related contingencies that, perforce, guided strategy utterly apart from the merits of the industry’s legal position.     

Emotional factors can play internally as well as externally. How might the demeanor of a CEO affect outcome in the Court of Public Opinion? How are employees likely to react to a multi-million dollar judgment for or against the company? Emotionalism almost always spells vulnerability unless the emotions can be corralled to advance the company’s interest. For a large company sued for infringement, emotions will generally run against it, and the strategy must include ways to protect against those emotions.

IP litigation involves people, not just facts. Long-term outcomes depend on how those people feel as well as think.

b. Control

The elements listed under “Control” represent the germinal communications strategy itself, the essential direction that the campaign should take based on the assessments of fact, emotion, and audience. Once the internal and external stakes are defined, and once the key audiences are identified, the basic “messages” can be developed. These themes will guide all communications going forward. They are predicated on the overall fact patterns but are re-crafted as those fact patterns change and are tailored in each instance for each audience identified.

For analysts and shareholders, the messages may speak to the effect of the litigation on stock or other equity value. An abiding concern of these audiences is closure. Typically, their concern is not with winning or losing, or even with the size of an adverse judgment. The more frequent concern is that the case be handled as expeditiously as possible. These audiences want to know what is being done to settle or win soonest so they can get a clear and uninterrupted prognosis of the economic indicators ahead.

Internal audiences may need messages about job security. “Business as usual” is the frequent theme here. Consumers may need to hear about the effects of a lawsuit on product or service availability and cost, as was the case in the Blackberry litigation. Some situations, like the Napster dispute, present unique consumer message challenges.

Selection of spokespersons to deliver these messages speaks directly to the subjective and emotional factors defined during the assessment. Not just the expertise of the spokespersons, but the credibility and their likeability are key factors. For analysts and shareholders, the CFO may be the right person. Lawyers are often effective messengers, but the danger is that they are often perceived as “mouthpieces.”

In situations where the litigation will directly affect the future of the company, CEOs are naturally the leading candidates for spokesperson as they are authoritative and credible, and their involvement underscores the earnest commitment of the company to each vital audience. Obviously, though, CEOs are the wrong candidates in situations where their involvement will elevate a matter that should be perceived as much less important.

c. Treat

As they’re developed, messages can be delivered both reactively and proactively. The input of the legal team is essential here as proactive public communications could increase exposure. The decision to go proactive or reactive is also based on how the fact patterns of the case evolve on a day-to-day basis, and what final public position the company chooses to take.

That public position typically entails one of three alternatives.

First is prevention. Nowhere is the input of dedicated communications professionals more important than in situations where potentially devastating negative information is about to be released. One treatment route is to work behind the scenes with reporters and editors to dissuade or minimize coverage, sometimes by calling into question the credibility of the source, sometimes by offering the reporters a different and better angle, or even an altogether different and better story.

Timing is crucial to prevention. For example, to minimize bad news about a case – bad news that, as the fact patterns develop, must inevitably be disclosed – the best practice for nearly all audiences is to release the news all at once. The alternative, which is a death by a thousand cuts, can create perceptions of corporate vulnerability that far outlast the disposition of a patent or the size of a penalty awarded in court. If, for example, there will certainly be derivative litigation or if, as a result of a judgment, the company will definitely be reducing its technical or clerical work force, it may be judicious to disclose at once rather than allow those problems to catalyze a whole new cycle of stories six months or a year in the future.

Alternatively, if the bad news may or may not be inevitably disclosed – if, in other words, there are negatives for the company that are not part of the public record – a slower, more reactive approach to prevention could be in order. The point in such instances is to react to one negative point of inquiry without raising other undesirable issues or compromising facts that the media won’t likely chance upon on its own.

“Aggression” is typically the position assumed by the plaintiffs. Yet it is also an option for the defense, especially in IP cases. In IP, the defense can, for example, clearly define what “trolling” means for those who don’t know (e.g., the general press) while establishing a negative profile of the opposition as, in essence, an IP pirate. At the disposal of the defense are “black bag” investigators who dig up compromising facts and relationships, for example, past cases settled quickly but strongly suggesting that the opposition is indeed an inveterate troll. Once that information is in hand, it is often best that third parties disseminate it to the media, or set up blogs and web sites, to hammer home the message even as the company itself maintains a safe distance.

Finally, contrition, while not a strategy of first resort, should be considered early if it means quick and permanent resolution, or if it will ward off the media pit bulls. A position of partial or qualified contrition may lessen unwanted media attention without harm to the legal case itself. The process could be simple and reactive with formal apologies and regrets worded in such a way as to preclude additional legal exposure.

But contrition can also be proactive when, for instance, a public service campaign reinforces corporate good citizenship. A public health initiative by a pharmaceutical company embroiled in a generic drug battle could, in fact, eventually attract positive press coverage long after the reason for its existence has been forgotten.

d. A Case in Point

There are, to be sure, abundant moving parts in litigation communications and it can therefore be useful to clarify our paradigm by example. The following case study is based on an actual recent matter in which a large company won a major victory against stiff odds. We’ve disguised identities with fictitious names and modified fact patterns.

AllPurpose Air Conditioners has just won a favorable ruling from a U.S. appellate body. At issue was the infringement of its patent in a country where infringement of foreign intellectual property has long been a chronic problem, and where the press is tightly controlled by the government. The appellate body remanded the case back to a lower court, which is expected to rule that all importations of infringing air conditioners are subject to immediate seizure by U.S. authorities. The day after the ruling, however, a front-page story in the country’s main newspaper reported that the appellate body in the United States repudiated AllPurpose by refusing to affirm the lower court’s decision on the merits of the case. Other newspapers in the country pick up and run a similar version of the story, which then appears on newswires and multiple critical web sites as well.

Following our template, the AllPurpose team, including the CEO, inside and outside counsel, and a communications advisor meet to “assess,” plan for “control,” and anticipate “treatment.”

Assess –

The objective facts are (1) the company’s position is legally unassailable and the fact patterns are in its favor; (2) the media, including a significant number of bloggers, either do not understand the appeals process in the U.S. or are intentionally misrepresenting it; and (3) upwards of $100 million in direct sales in the foreign country, as well as $500 million in products exported back to the U.S, are at risk. The stakes could be even higher if, based on the erroneous media account, further infringement is encouraged and AllPurpose gets undersold domestically.

The key audiences are in both countries. Overseas, they include the newspapers and online venues, the government which controls them, and the infringing manufacturers who have been incited by the erroneous coverage. Stateside, they include stock analysts who will render evaluations based – not on whether the company made its case in the U.S. – but on whether the favorable ruling will have the desired economic effects in the problematic foreign market.

The subjective considerations are all about foreign government officials saving face. They cannot admit to intentional misrepresentation or, alternatively, be made to appear stupid. Any communications plan going forward must take their delicate position into careful consideration.

Control –

Based on this assessment, the control strategy must be formulated in such a way as to produce the same results irrespective of whether or not the media misrepresentation was intentional. One way or another, there must be enough pressure to force a correction of the story. At the same time, the process must be politic enough to allow the foreign government and its newspaper to respond in a way that holds all parties blameless.  

In this situation, AllPurpose’s messages must explain why the appeals process in the U.S. often leads to confusion; why, in other words, the media mistake was quite understandable. They must briefly – very briefly – explain the U.S. judicial and regulatory process. And, they must elucidate why it is in the mutual interests of both sides to include this explanation in a corrected news story. Moreover, the messages should be disseminated in such a way so that the corrected version gets more attention than the original and replaces it in both global and local media as well as on the web.  

Treat –

The actions must be proactive. They must be tailored to the style and tone of the foreign culture. The position must be one of “prevention” rather than “aggression” or “contrition.” The latter is obviously not appropriate, while an aggressive campaign of the sort that might be waged against, say, a patent troll would only ratchet up this problem rather than solve it.

AllPurpose took three steps. A packet of information was hand-delivered to officials in the foreign country. Hand-delivery guaranteed receipt and implicitly underscored the gravity of the situation. At the same time, the information included a helpful and friendly fact sheet advisory. A cover letter stated that the government must itself have been surprised by the misrepresentation that appeared in the press. The letter also inquired through what channels a request for a correction could best be made.

Simultaneously, AllPurpose posted a blog highlighting what actually happened in the appellate process (with no reference to the misrepresentation overseas). Of course, there are millions of blogs floating in cyberspace, so the company took two supportive actions to maximize impact. First, it sent out a press releasing announcing the blog and restating the actual legal facts.

Second, it optimized the blog, generating enough visitors to eclipse the original incorrect story on Internet search engines. Web readers included reporters throughout the U.S. so that the blog generated additional accurate coverage, online and off, with each new posting.

There was thus enough aggressiveness by AllPurpose to underscore its resolve that the true story be told. At the same time, there were no direct attacks. Within days, the foreign government removed the incorrect information it had supported on global websites. In turn, all the wire services and most of the online news resources corrected their originals. The AllPurpose press release came to be recognized by Internet search engines as the official version of events. If the inaccurate story reached millions, AllPurpose’s version has reached tens of millions.

II. The Lines of Battle

It’s important to realize that the case management model presented here is fungible in the sense that the complex terms of art, and the endless technicalities that comprise IP practice, are not necessarily part of this initial process. The model is intentionally more general, applicable to other types of cases besides IP.

Indeed, a fundamental mistake that industry experts make is to formulate communications plans by jumping headlong into the details. That is not what communications is about. Our AllPurpose example has no reference to air conditioner parts or to the specifics of the original patent. To win an IP battle in the Court of Public Opinion, litigants must define the one or two things that their target audiences care most about in terms of their own lives, leveraging publicself-interest on their own behalf.

There is no matter so recondite that it cannot be broken down into absolutely comprehensive language. Formulate a case interpretation that any high school graduate can understand. To protect the brand in the marketplace, simplicity is an inevitable and indispensable virtue. Look for third parties whose support will have impact on public opinion apart from the details of the case itself. The fact that a lawsuit is legally complex or scientifically technical does not preclude the same kind of good guy/bad guy typecasting that we find in oil spills or product recalls or white collar cases

Napster taught us that, when the public wants something, they will support whoever provides it (especially for free). Napster also taught us that, to counter that trend, public sympathies could be roused on behalf – not necessarily of the music industry itself – but of sympathetic artists who would also be economically damaged by widespread copying.

No matter what the fact pattern, look for ways to personalize the issue. None of it has much to do with the specifics of “prior art.” Concepts like that may win or lose lawsuits, but, as we have emphasized, communications for IP litigants has as much and sometimes more to do with what happens after the case is closed.      

That said, our case management model has direct application to most every segment of IP litigation in today’s marketplace. A review of these evolving battlefields can better elucidate our communications model as well as provide hints and updates on the specific communications challenges presented in each area of IP practice. 

In particular: 

a. Piracy

Globally, of course, the central focus is China while online piracy is still a communications challenge in the U.S. As a further refinement of our communications model, the example of the music industry and Napster is additionally instructive.

That industry effectively changed message in midstream. At the onset of the Napster fracas, the careful message was that the target was Napster and other “formal business models” based on infringement. The message carefully excluded consumers from the dragnet. As we all know, that message changed dramatically as lawsuits were eventually filed against consumers nationwide – proof that a communications model is not stationary, that it can do an about-face as economic and legal factors warrant, and that a sudden reversal, if handled well, will not necessarily betray obvious inconsistency from one point in time to another.

Overseas, communications as well as legal professionals are constantly monitoring the increased willingness of Chinese officials to enforce protections. It is important that the communications game plan play to that changing environment with industry-wide messaging that encourages fuller cooperation. Here, assessment, control, and treatment should likely favor the carrot over the stick.

b. Patents

Not surprisingly, the Blackberry litigation was a watershed. On the one hand, no case better illustrates how a dry and complex patent case can roil public sentiment, again, because there were such obvious areas of public concern. On the other hand, the case powerfully shows how a communications strategy in an IP matter affects future earnings at least as much as current liabilities.

From our perspective, RIM did a commendable job – although it was a perilously close question for an extended period of time – easing public concerns and encouraging consumers to continue to buy Blackberrys. The audience was narrower as well inasmuch as the messaging went beyond buyers, and beyond Blackberry itself, to encourage investors in ongoing RIM technology.

c. Trade secrets

The potential here for potent communications planning is all the greater as trade secrets cover such a wide context. For example, trade secrets provoke public concern over employment policies that pertain to non-technical intellectual property: training manuals, financial information, client lists, etc. There is often no recondite science in these cases because there are no patent claims. Again, the company brand is at risk whatever the outcome of a case, if, say, an employer wins in court but is widely perceived as prone to sharp hiring and firing practices.

d. Pharmaceutical

The unusual challenge here is that the business interests of companies may be perceived as directly in opposition to public safety. Even alleged polluters do not face quite such a challenge insofar as it is widely assumed (and often correctly) that the means to, say, discharge environmentally harmless wastes may be costly in the short term, but will not savage the corporate bottom line and, in the long run, may actually enhance it.

With Big Pharma, however, there is no perceived easy way to protect intellectual property and still make an AIDS drug or an Avian Flu drug universally available. TRIPS-driven settlements like the one reached by Merck in Brazil for AIDS medication are thus all the more crucial as they are opportunities to recast the debate in such a way that the corporations look like problem-solvers, not obstacles to humanitarian progress.

In general, identifying and tailoring messages for specific audiences is possibly more important for Pharma than other industries, at least in the IP arena. On the one hand, the general public must receive a message that, even with people in developing nations whom the average American will never meet, the corporation is unequivocally committed to saving human life.

On the other hand, investors and analysts must see that sound business practices are in place. They must be reassured that compromises with foreign governments do not altogether obviate the very idea of a patent, exposing the corporation to global infringement. They must also be reassured that projected bottom-line losses in developing nations will be amply compensated by accelerated gains in developed nations.   

An additional communications challenge for many industries, which is nowhere more acute than for pharmaceuticals, is to separate the battlefields. Product liability cases like Vioxx pour over into mainstream opinion, negatively affecting perceptions of unrelated issues like generic drugs and Third World exigencies. In communications, volume can be salutary and dispositive. In other words, the more often and more prominently the company discusses a successful outcome on the generic drug issue, the better chance it stands to separate that discussion from others.

e. Life Sciences

Here is another pointed example of how, from a communications standpoint, a debate over a patent can mushroom into discussion of contentious moral issues, particularly when the starting point for the media might be a question like, “Can you patent something that is alive?” For biotech companies, subjective factors during the assessment phase should therefore speak directly to our primal socio-cultural beliefs, no less so than in a debate over abortion or assisted suicide.

One communications initiative in this area profited from a shrewd tactic relevant to patent-holders of every stripe. ATCC, the world’s largest bio-resource center, was at risk as multiple companies were reselling its microorganisms around the world without its permission and without necessarily adhering to its high standards. The company threatened legal action against infringers, but added an incentive as well, publicizing companies that signed up for ATCC’s revised licensing regimen. Again, the carrot is often mightier than the stick.

f. Copyrights and trademarks

Among IP areas, copyrights often attract the keenest media interest simply because top media personalities are frequently involved. For mass audiences, the David and Goliath scenario also plays out here even more than in most business patent disputes, because the plaintiff might often be a starving artist with an alleged copyright on the original design of Mickey Mouse.

The “control” and “treat” phases of such cases therefore need to be particularly sensitive to subjective factors. Being “disliked” as a Goliath is potentially a big marketplace problem for a company that, say, sells programming to children. In dealing with plaintiffs, companies can adopt a carefully aggressive strategy that portrays the claimant as a crank. The “David” role can be turned on its head in the same way that personal injury plaintiffs are often scorned by the public as nuisances, and greedy ones at that.   

Trademarks are also media lodestones simply because the marks in dispute are often so recognizable, as when a Frenchman sued Wal-Mart over rights to the yellow smiley face. For a journalist, that’s a hard story to resist.

To be sure, we have only touched on the multifaceted influencers at work in IP litigation. Our sample is presumably broad enough, though, to convey how flexible case management models based on assessment, strategy, and implementation can be adopted to myriad contingencies in litigation – and beyond the litigation. At the very least, such planning and pursuit serve longer-term client interests by underscoring the human as well as substantive communications that determine final business outcomes.    

Richard S. Levick, Esq. is the President of Levick Strategic Communications (http://www.levick.com), named the Crisis Communications Agency of the Year by the Holmes Report. His firm has managed media strategies for many of the world’s highest-profile matters. He and his firm have published acclaimed books, including Stop the Presses:The Litigation PR Desk Reference.  

Reprinted with Permission of The IP Litigator [Date] [Vol # Issue #]. Published by Aspen Publishers, 1185 Avenue of the Americas, New York, NY 10036. To order a subscription, please call (800) 638-8437.