IP Litigation: What Is It Good For?

Distasteful, But Often Necessary
A Show of Force

As obvious as this distaste for lawsuits may be to anyone who has ever been deposed, it nonetheless is often critical for businesses, and particularly technology firms, not only to be prepared to go (metaphorically) to war in the battlefield of the courtroom, but to actually take that step.

Just as the Allied leadership had to win the hearts and minds of an isolationist populace at the start of World War II with the classic propaganda film series, Why We Fight (see, http://en.wikipedia.org/wiki/Why_We_Fight), e-commerce attorneys must educate their legal fee and litigation-averse clients and CEOs on why incurring the often unrecoverable costs of threatening to sue someone, much less actually taking that person to court, may be as wise an investment as a new router or hiring of a top marketer.

Fighting for IP

Foremost, of course, a business based on intellectual property must protect its intangible assets against legal and real-world threats. Some non-legal defense will come in the marketplace, by offering better pricing or service.

But in e-commerce, as sellers increasingly rely on the same vendors and back-end providers, often little distinguishes one firm from another besides the intellectual property assets used in marketing ' not only the trademarks used for a particular campaign, but also the trade secrets and Web tools used to drive traffic to a Web site.

Cease-and-Desist Letters:
Make Them Count

Once a dispute has begun, therefore, whose IP will prevail and whose will vanish into the electronic ash heap of history, must be decided by legal arguments, rather than by the customers.

For example, a routine task for e-commerce counsel today is sending a cease-and-desist letter when another firm has improperly appropriated one firm's property, whether by hiring a former employee who is bound by confidentiality or non-competition covenants, by blatantly stealing material from a Web site, or by attracting hits through metatags or buying ad words that use a competitor's trademarks. While a firm can itself send a complaint e-mail, a demand letter from a local attorney, who is regularly in court and can demand that the target answer charges (and force it to pay for an attorney to help it do so), is a much more compelling way of rebutting a potential competitor's challenge ' especially when the relevant arguments will not likely be familiar to the average businessperson, even a tech entrepreneur.

The technical (and constantly shifting) sands of copyright and trademark jurisprudence often stymie even experienced business counsel, so a firm wishing to fire the proverbial shot across a rival's bow should at least be certain it knows how to load its gun ' by hiring IP-litigation counsel capable of doing so, because the ammunition will be almost purely legal. Even more so, the IP firm's attorney must know the intricacies of an IP practice, and the importance of steps that do not arise in more “traditional” litigation (such as, for example, I am told by my IP colleagues, a “Markman hearing” for claim construction in patent cases, during which a judge will look at evidence from the plaintiffs and the defendants concerning the alleged improperly used keywords that supposedly infringe on a patent holder's rights).

Mundane, But Meaty: Contracts

Another mundane area where going to court may be necessary involves enforcing a tech firm's contracts, whatever they may be. In a virtual economy, where almost all relationships among firms are created by agreements, companies cannot afford to ignore violations of those agreements that could cost profits, market share or reputation.

An IP firm that develops a reputation of not defending itself when challenged online will quickly find itself challenged regularly, whether economically ' slow or non-payment of invoices, for example ' or in matters affecting the brand (such as in the case of the infringement litigation).

While sending a demand letter for compliance with a contract need not necessarily require counsel, asking counsel to draft and send such correspondence does add some level of credibility ' and the risk that the next communication will cause the recipient to have to incur the costs of retaining counsel and all the other aggravations of litigation mentioned earlier in this article.

Preparing for Former Employees

Another common need for litigation assistance occurs when key employees leave. Tech firms almost always require employees to sign protective agreements when they are hired, prohibiting competition and solicitation of the employer's business. They also routinely insist on confidentiality agreements to protect their core knowledge. In the ordinary course of business, therefore, many firms may have to “remind” former employees of those obligations when they leave ' with the forcefulness of the reminder depending on whether the former employee remains in the same business or geographic area. While a tech entrepreneur can send his or her own letters threatening sanctions for violations of such agreements, the former employee ' and her or his new employer ' will likely pay more attention when the letters arrive via certified mail from counsel.

Protected Name Registration

Today's news also suggests another developing area for spending on litigation. Recently, virtual reality site Second Life (owned by Linden Labs) announced plans to expand the opportunities for brand owners to protect their content in the Second Life environment (see, https://support.secondlife.com/ics/support/default.asp?deptID=4417). Facebook's announcement in June of such a procedure led to a rush to register names at that site. Registering protected names on Twitter has also led to a few claims against imposters through traditional infringement litigation (see, http://online.wsj.com/article/SB124269417597532869.html).

Vigilance, Vigilance, Vigilance

But the legal ability to defeat competing claimants at different sites obscures the bigger evolving issue online: The fight to protect a name can never stop. There will always be a new “greatest thing” online. Just as Facebook has supplanted one-time leader MySpace, there will always be a new Twitter (or other cutting-edge technology) ready to win over users, and provide a new place where a business must protect its intellectual property.

While it will almost certainly remain critical to have valid trademark registrations in place, domestically and abroad (because of the international reach of the Web), it will be equally important to employ them regularly in each new online venue, to prevent the growth of upstarts who do not respect intellectual-property rights. If a standard cease-and-desist letter does not change an infringer's behavior ' and often a standard such letter does not, if sent by an attorney in a distant state who cannot take any immediate action against the infringer ' then more forceful action becomes the only step available, for which a very local trial attorney is needed.

In short, as long as online sites continue to grow, there will always be a need to protect a tech firm's assets in the new online venues, in ways that we cannot even imagine today. Paraphrasing a longstanding maxim attributed to many (from Thomas Jefferson to abolitionist and civil-rights advocate Wendell Phillips to Andrew Jackson to Irish lawyer and social-justice crusader John Philpot Curran), in somewhat more serious contexts: “The price of IP protection is eternal vigilance” ' a full-employment manifesto for IP litigators.

Accept That Tech Firms Are Different

Accepting the need for litigation is not enough; a firm must still acknowledge that claims affecting a tech business will play out somewhat differently than more traditional claims can be expected to, which is all the more reason to have an experienced IP litigator on your side.

For example, while a judge may be forced to learn about many different businesses over the course of a career in order to decide cases, that doesn't necessarily make him or her competent to decide a cutting-edge tech case based on what counsel presents ' especially if counsel themselves are not sufficiently versed in the science or engineering underlying the dispute. The situation is worse when a jury is involved.

Paradoxically, a lifetime of work that may have led to creation of a tech business with a market-dominating patented niche may depend on how a liberal-arts graduate can summarize it in a five-minute presentation. In such conditions, choices are made about how to present cases to reduce the risk of a disastrous result that are very different from those that might be made in a discussion in a lab, or in an online expert discussion group.

All or Nothing!

For this reason, IP litigation is more likely to have an “all-or-nothing” risk than other business disputes. A firm defending the technological underpinnings of its business model must approach it with the perspective that a loss could shut the firm down or, more likely, cause it to pay crippling licensing fees to the winner if it wishes to remain in business. Knowing that risk forces counsel to consider its presentation and settlement strategy differently than in a typical business case. The long saga of the RIM/Blackberry litigation well illustrates this concern (see, www.washingtonpost.com/wp-dyn/content/article/2006/03/03/AR2006030301489.html).

Speed Is Essential

Another dynamic important to tech litigation is speed. While the temporary restraining order is certainly not unique to IP litigation, it can help force a hearing on the most cutting-edge issues into an earlier stage of the proceedings ' and avoid the cost of full proceedings, in dollars and, perhaps more important in an ever-changing marketplace, time. Often, neither side wants to face the possibility of a terminal decision, drawn out over years due to crowded dockets, and the accompanying harmful effects on stock prices as investors fear uncertainty. That being the case, a well-advised firm will try for a quick win through an artful motion practice early in the case, in the hope that it will force a prompt resolution, to avoid the costs of a full hearing ' independently of what the actual substantive result should have been, and long before there would have been a trial and decision.

Confidentiality

A related concern for any tech dispute is confidentiality. Because litigation dockets are public, part of a tech firm's decision whether to sue or not often must be based on whether a protective order is likely to be granted to keep the information revealed in the pleadings confidential and, more broadly, how much the opponent will get to see. This is a particular concern in e-commerce, where the critical information may not be otherwise legally protected by patent law, but rather by laws pertaining to trade secrets that are the core of marketing strategies, or simply the identities of vendors or customers.

In theory, a protective order keeps part of the official court records confidential, to protect the owner of the information. If proving the tech firm's case will inevitably reveal some information, and the particular judge or court is known to be reluctant to grant such protection, then it may be worth considering how badly the litigation result is needed, and whether it is worth the risk of inadvertent disclosure ' or blatant violation of the order by the another party.

Even without using the “protected” information, enough may be revealed for a litigation opponent or business competitor knowledgeable in the field to gain an advantage, such as by reverse engineering, that it would not have had without the disclosure in the litigation.

Going the Distance in a Fight

As in any litigated matter, tech or not, the participants must also be prepared to cross the proverbial point of no return ' and to know where that point is. Once a lawsuit has been filed, lines have been crossed, in the industry with competitors and on the balance sheet, which cannot be erased. Even if the case is withdrawn, the willingness to go to war will affect the company's reputation, and the fact of the filing will almost certainly be in the public record. Litigation is serious business, and no one involved in the decision to fire first against the enemy should forget that fact. This reality is well expressed by the clich', “If you're going to kill the king, you had better kill the king” ' failed or half-hearted efforts, at litigation as well as assassination, inevitably lead to unpleasant retribution.

Trying to Contain Costs

Of course, any businessperson reading this article must also contemplate the certain and immediate out-of-pocket cost of protecting his or her company's assets, particularly the legal fees. In business ' and especially in our current cash-stressed times ' no decision can be made independently of what it will cost, what current cash flow is, and what other payment demands the company faces. A firm may recognize the importance of funding litigation to try to shut down a competitor that is confusing customers, but not have the cash to do so if that would mean missing a bank or payroll payment, or not having needed inventory, especially because many law firms competent to handle this work won't extend credit, but instead demand a retainer before acting. Even if the case is withdrawn, the costs of filing the lawsuit are forever gone: Law firms and courts don't give refunds when a party says, “Sorry, I didn't mean it.”

Use Business Insurance To the Maximum

In some cases, however, there may be an unexpected source of cash for protecting IP ' from the company's standard commercial general-liability (“CGL”) insurance policy. Many types of business insurance include coverage for defense of certain types of IP torts, e.g., a claim against the company that it infringes the IP of another firm. While it may take some negotiation ' and even a threat of coverage litigation ' to get the carrier to pay, if it does agree, there will be carrier funds to pay defense costs. A coverage review with a broker or counsel experienced in providing IP-related coverage can assist on this point. (Unfortunately, insurance will not cover cases brought by an insured, even if they are critical for its business, as in the examples described earlier in this article.)

Prepare By Conducting an Audit

The last point nicely segues to my final recommendation concerning IP litigation: an IP audit. For a firm that depends on its intellectual property, an IP attorney's review of what the company has and whether it is adequately protected serves several purposes beyond merely allowing the firm's insurance broker to assess whether the firm has adequate and sufficient coverage to defend claims against its type of business and properties.

First, just as no one would leave valuable tangible property outside and unlocked, exposed to thieves, any steps necessary to protect the intangibles can be taken before the need to do so in the crucible of litigation, when some of the procedural benefits of IP registration may already have been lost. In addition, having a good inventory of a firm's IP will make it easier, and less expensive, for counsel to defend or prosecute a case involving those assets.

Particularly for businesspeople not familiar with the technical aspects of maintaining an IP portfolio, an audit is a good time to clean up the records, and to make a considered analysis of whether any opportunities exist to monetize them through licensing or other strategies.

A good IP-asset list may also help in financing as well, particularly if any IP was acquired in a transaction that will allow it to appear on the balance sheet. (See, “Dressing Your e-Business Up for Success,” in the June 2008 edition of e-Commerce Law & Strategy, at www.lawjournalnewsletters.com/issues/ljn_ecommerce/25_2/news/150577-1.html.)

Develop IP Team Litigation Spirit

While litigation will never be anything but painful for any firm, the wise and far-sighted tech executive should view his or her IP litigation team with a new perspective, he or she shifts focus to the important role litigation can play in protecting the company's key IP assets. In today's lawsuit-happy world, the litigator will be transformed from a “necessary evil” in bad times to an ally in growing and building the business. Instead of thinking that litigation is good for “absolutely nothing,” the e-commerce executive and her attorney can instead hum together a different classic 1970s tune from the band War as they battle together against infringers: “Why can't we be friends?” ' because in the world of e-commerce, there are always more than enough enemies.

Military strategist Carl von Clausewitz once famously observed in his classic “On War” that: “War is the continuation of politics by other means.” In the same vein, many sophisticated and experienced business lawyers simply view litigation as another form of negotiation to reach a client's strategic goals ' albeit a very expensive one.

In contrast, litigation really is good for absolutely nothing, in the view of most executives who must pay the lawyers. Certainly, no one who “does” deals, or counsels businesses, likes to be hauled into court. Everything involved with litigation is expensive, from the attorneys who must be on call for hours on end awaiting trials and hearings, to the all-consuming preparation involved before each appearance. Moreover, litigation is tremendously disruptive, because it changes a firm's focus. Instead of emphasizing the tasks of getting and keeping new business, litigation diverts attention to second-guessing what has already occurred and planning to avoid liability.

Even worse, it changes how a firm interacts with its potential customers ' each one is viewed not as a profit opportunity, but as a potential plaintiff. Once a firm is in “litigation mode,” the traditional “person-to-person” interaction that created and built a sales relationship is banished and forgotten. Instead, all interaction takes place between attorneys, reducing, if not eliminating, the chances that two reasonable businesspersons could find a rational, “least-cost” settlement to their dispute. Practical solutions that two persons “in the business” might spot immediately may never even be on the table when all talks are conducted by counsel, who may know all the relevant law, but little about the actual business.

Distasteful, But Often Necessary
A Show of Force

As obvious as this distaste for lawsuits may be to anyone who has ever been deposed, it nonetheless is often critical for businesses, and particularly technology firms, not only to be prepared to go (metaphorically) to war in the battlefield of the courtroom, but to actually take that step.

Just as the Allied leadership had to win the hearts and minds of an isolationist populace at the start of World War II with the classic propaganda film series, Why We Fight (see, http://en.wikipedia.org/wiki/Why_We_Fight), e-commerce attorneys must educate their legal fee and litigation-averse clients and CEOs on why incurring the often unrecoverable costs of threatening to sue someone, much less actually taking that person to court, may be as wise an investment as a new router or hiring of a top marketer.

Fighting for IP

Foremost, of course, a business based on intellectual property must protect its intangible assets against legal and real-world threats. Some non-legal defense will come in the marketplace, by offering better pricing or service.

But in e-commerce, as sellers increasingly rely on the same vendors and back-end providers, often little distinguishes one firm from another besides the intellectual property assets used in marketing ' not only the trademarks used for a particular campaign, but also the trade secrets and Web tools used to drive traffic to a Web site.

Cease-and-Desist Letters:
Make Them Count

Once a dispute has begun, therefore, whose IP will prevail and whose will vanish into the electronic ash heap of history, must be decided by legal arguments, rather than by the customers.

For example, a routine task for e-commerce counsel today is sending a cease-and-desist letter when another firm has improperly appropriated one firm's property, whether by hiring a former employee who is bound by confidentiality or non-competition covenants, by blatantly stealing material from a Web site, or by attracting hits through metatags or buying ad words that use a competitor's trademarks. While a firm can itself send a complaint e-mail, a demand letter from a local attorney, who is regularly in court and can demand that the target answer charges (and force it to pay for an attorney to help it do so), is a much more compelling way of rebutting a potential competitor's challenge ' especially when the relevant arguments will not likely be familiar to the average businessperson, even a tech entrepreneur.

The technical (and constantly shifting) sands of copyright and trademark jurisprudence often stymie even experienced business counsel, so a firm wishing to fire the proverbial shot across a rival's bow should at least be certain it knows how to load its gun ' by hiring IP-litigation counsel capable of doing so, because the ammunition will be almost purely legal. Even more so, the IP firm's attorney must know the intricacies of an IP practice, and the importance of steps that do not arise in more “traditional” litigation (such as, for example, I am told by my IP colleagues, a “Markman hearing” for claim construction in patent cases, during which a judge will look at evidence from the plaintiffs and the defendants concerning the alleged improperly used keywords that supposedly infringe on a patent holder's rights).

Mundane, But Meaty: Contracts

Another mundane area where going to court may be necessary involves enforcing a tech firm's contracts, whatever they may be. In a virtual economy, where almost all relationships among firms are created by agreements, companies cannot afford to ignore violations of those agreements that could cost profits, market share or reputation.

An IP firm that develops a reputation of not defending itself when challenged online will quickly find itself challenged regularly, whether economically ' slow or non-payment of invoices, for example ' or in matters affecting the brand (such as in the case of the infringement litigation).

While sending a demand letter for compliance with a contract need not necessarily require counsel, asking counsel to draft and send such correspondence does add some level of credibility ' and the risk that the next communication will cause the recipient to have to incur the costs of retaining counsel and all the other aggravations of litigation mentioned earlier in this article.

Preparing for Former Employees

Another common need for litigation assistance occurs when key employees leave. Tech firms almost always require employees to sign protective agreements when they are hired, prohibiting competition and solicitation of the employer's business. They also routinely insist on confidentiality agreements to protect their core knowledge. In the ordinary course of business, therefore, many firms may have to “remind” former employees of those obligations when they leave ' with the forcefulness of the reminder depending on whether the former employee remains in the same business or geographic area. While a tech entrepreneur can send his or her own letters threatening sanctions for violations of such agreements, the former employee ' and her or his new employer ' will likely pay more attention when the letters arrive via certified mail from counsel.

Protected Name Registration

Today's news also suggests another developing area for spending on litigation. Recently, virtual reality site Second Life (owned by Linden Labs) announced plans to expand the opportunities for brand owners to protect their content in the Second Life environment (see, https://support.secondlife.com/ics/support/default.asp?deptID=4417). Facebook's announcement in June of such a procedure led to a rush to register names at that site. Registering protected names on Twitter has also led to a few claims against imposters through traditional infringement litigation (see, http://online.wsj.com/article/SB124269417597532869.html).

Vigilance, Vigilance, Vigilance

But the legal ability to defeat competing claimants at different sites obscures the bigger evolving issue online: The fight to protect a name can never stop. There will always be a new “greatest thing” online. Just as Facebook has supplanted one-time leader MySpace, there will always be a new Twitter (or other cutting-edge technology) ready to win over users, and provide a new place where a business must protect its intellectual property.

While it will almost certainly remain critical to have valid trademark registrations in place, domestically and abroad (because of the international reach of the Web), it will be equally important to employ them regularly in each new online venue, to prevent the growth of upstarts who do not respect intellectual-property rights. If a standard cease-and-desist letter does not change an infringer's behavior ' and often a standard such letter does not, if sent by an attorney in a distant state who cannot take any immediate action against the infringer ' then more forceful action becomes the only step available, for which a very local trial attorney is needed.

In short, as long as online sites continue to grow, there will always be a need to protect a tech firm's assets in the new online venues, in ways that we cannot even imagine today. Paraphrasing a longstanding maxim attributed to many (from Thomas Jefferson to abolitionist and civil-rights advocate Wendell Phillips to Andrew Jackson to Irish lawyer and social-justice crusader John Philpot Curran), in somewhat more serious contexts: “The price of IP protection is eternal vigilance” ' a full-employment manifesto for IP litigators.

Accept That Tech Firms Are Different

Accepting the need for litigation is not enough; a firm must still acknowledge that claims affecting a tech business will play out somewhat differently than more traditional claims can be expected to, which is all the more reason to have an experienced IP litigator on your side.

For example, while a judge may be forced to learn about many different businesses over the course of a career in order to decide cases, that doesn't necessarily make him or her competent to decide a cutting-edge tech case based on what counsel presents ' especially if counsel themselves are not sufficiently versed in the science or engineering underlying the dispute. The situation is worse when a jury is involved.

Paradoxically, a lifetime of work that may have led to creation of a tech business with a market-dominating patented niche may depend on how a liberal-arts graduate can summarize it in a five-minute presentation. In such conditions, choices are made about how to present cases to reduce the risk of a disastrous result that are very different from those that might be made in a discussion in a lab, or in an online expert discussion group.

All or Nothing!

For this reason, IP litigation is more likely to have an “all-or-nothing” risk than other business disputes. A firm defending the technological underpinnings of its business model must approach it with the perspective that a loss could shut the firm down or, more likely, cause it to pay crippling licensing fees to the winner if it wishes to remain in business. Knowing that risk forces counsel to consider its presentation and settlement strategy differently than in a typical business case. The long saga of the RIM/Blackberry litigation well illustrates this concern (see, www.washingtonpost.com/wp-dyn/content/article/2006/03/03/AR2006030301489.html).

Speed Is Essential

Another dynamic important to tech litigation is speed. While the temporary restraining order is certainly not unique to IP litigation, it can help force a hearing on the most cutting-edge issues into an earlier stage of the proceedings ' and avoid the cost of full proceedings, in dollars and, perhaps more important in an ever-changing marketplace, time. Often, neither side wants to face the possibility of a terminal decision, drawn out over years due to crowded dockets, and the accompanying harmful effects on stock prices as investors fear uncertainty. That being the case, a well-advised firm will try for a quick win through an artful motion practice early in the case, in the hope that it will force a prompt resolution, to avoid the costs of a full hearing ' independently of what the actual substantive result should have been, and long before there would have been a trial and decision.

Confidentiality

A related concern for any tech dispute is confidentiality. Because litigation dockets are public, part of a tech firm's decision whether to sue or not often must be based on whether a protective order is likely to be granted to keep the information revealed in the pleadings confidential and, more broadly, how much the opponent will get to see. This is a particular concern in e-commerce, where the critical information may not be otherwise legally protected by patent law, but rather by laws pertaining to trade secrets that are the core of marketing strategies, or simply the identities of vendors or customers.

In theory, a protective order keeps part of the official court records confidential, to protect the owner of the information. If proving the tech firm's case will inevitably reveal some information, and the particular judge or court is known to be reluctant to grant such protection, then it may be worth considering how badly the litigation result is needed, and whether it is worth the risk of inadvertent disclosure ' or blatant violation of the order by the another party.

Even without using the “protected” information, enough may be revealed for a litigation opponent or business competitor knowledgeable in the field to gain an advantage, such as by reverse engineering, that it would not have had without the disclosure in the litigation.

Going the Distance in a Fight

As in any litigated matter, tech or not, the participants must also be prepared to cross the proverbial point of no return ' and to know where that point is. Once a lawsuit has been filed, lines have been crossed, in the industry with competitors and on the balance sheet, which cannot be erased. Even if the case is withdrawn, the willingness to go to war will affect the company's reputation, and the fact of the filing will almost certainly be in the public record. Litigation is serious business, and no one involved in the decision to fire first against the enemy should forget that fact. This reality is well expressed by the clich', “If you're going to kill the king, you had better kill the king” ' failed or half-hearted efforts, at litigation as well as assassination, inevitably lead to unpleasant retribution.

Trying to Contain Costs

Of course, any businessperson reading this article must also contemplate the certain and immediate out-of-pocket cost of protecting his or her company's assets, particularly the legal fees. In business ' and especially in our current cash-stressed times ' no decision can be made independently of what it will cost, what current cash flow is, and what other payment demands the company faces. A firm may recognize the importance of funding litigation to try to shut down a competitor that is confusing customers, but not have the cash to do so if that would mean missing a bank or payroll payment, or not having needed inventory, especially because many law firms competent to handle this work won't extend credit, but instead demand a retainer before acting. Even if the case is withdrawn, the costs of filing the lawsuit are forever gone: Law firms and courts don't give refunds when a party says, “Sorry, I didn't mean it.”

Use Business Insurance To the Maximum

In some cases, however, there may be an unexpected source of cash for protecting IP ' from the company's standard commercial general-liability (“CGL”) insurance policy. Many types of business insurance include coverage for defense of certain types of IP torts, e.g., a claim against the company that it infringes the IP of another firm. While it may take some negotiation ' and even a threat of coverage litigation ' to get the carrier to pay, if it does agree, there will be carrier funds to pay defense costs. A coverage review with a broker or counsel experienced in providing IP-related coverage can assist on this point. (Unfortunately, insurance will not cover cases brought by an insured, even if they are critical for its business, as in the examples described earlier in this article.)

Prepare By Conducting an Audit

The last point nicely segues to my final recommendation concerning IP litigation: an IP audit. For a firm that depends on its intellectual property, an IP attorney's review of what the company has and whether it is adequately protected serves several purposes beyond merely allowing the firm's insurance broker to assess whether the firm has adequate and sufficient coverage to defend claims against its type of business and properties.

First, just as no one would leave valuable tangible property outside and unlocked, exposed to thieves, any steps necessary to protect the intangibles can be taken before the need to do so in the crucible of litigation, when some of the procedural benefits of IP registration may already have been lost. In addition, having a good inventory of a firm's IP will make it easier, and less expensive, for counsel to defend or prosecute a case involving those assets.

Particularly for businesspeople not familiar with the technical aspects of maintaining an IP portfolio, an audit is a good time to clean up the records, and to make a considered analysis of whether any opportunities exist to monetize them through licensing or other strategies.

A good IP-asset list may also help in financing as well, particularly if any IP was acquired in a transaction that will allow it to appear on the balance sheet. (See, “Dressing Your e-Business Up for Success,” in the June 2008 edition of e-Commerce Law & Strategy, at www.lawjournalnewsletters.com/issues/ljn_ecommerce/25_2/news/150577-1.html.)

Develop IP Team Litigation Spirit

While litigation will never be anything but painful for any firm, the wise and far-sighted tech executive should view his or her IP litigation team with a new perspective, he or she shifts focus to the important role litigation can play in protecting the company's key IP assets. In today's lawsuit-happy world, the litigator will be transformed from a “necessary evil” in bad times to an ally in growing and building the business. Instead of thinking that litigation is good for “absolutely nothing,” the e-commerce executive and her attorney can instead hum together a different classic 1970s tune from the band War as they battle together against infringers: “Why can't we be friends?” ' because in the world of e-commerce, there are always more than enough enemies.