Law Tech: The Importance of Web 2.0 Fundamentals.

The term "Web 2.0" refers, in general, to the use of social media such as blogs, podcasts, video, and networks to enhance creativity, communications, secure information sharing, collaboration and functionality of the web. In regard to this post, the term is also used with specific reference to the use of such media by lawyers to communicate with other lawyers, their clients and the general public.These days it seems that most law firms/lawyers have some form of presence on the internet. There are some common themes to many of the firm sites which I'll describe as 'generic' including a photo of the firm's location usually a building or landscape portrait and a lot of short paragraphs filled with platitudes professing the specialties and expertise of the lawyers of the firm (including perhaps a reference to a Martindale-Hubbell rating and/or claim of "Super Lawyer") followed by contact information.

However, in the past several years, there has been a fairly steady move away from the 'generic' website with the advent of new internet applications which allow for more interactive forms of communication or Web 2.0. The use of blogs or 'lawblogs' by lawyers has grown significantly with companies such as LexBlog.com showing lawyers how they can supplement or literally replace their 'generic' sites with a blog combining the use of tools such as RSS ("Really Simple Syndication") feeds to share topical information and networking sites such as LinkedIn.com and Twitter.com. The growth of companies such as Google and its many application 'offshoots' such as Blogger.com also allow lawyers to create their own sites and link them to very powerful sets of software applications (e.g., Box.net).

The number of marketing professionals eager to show lawyers how to use the web has also grown exponentially. The old line marketing firms such as Martindale-Hubbell are now feeling pressure to revamp to stay with new competitors like Avvo.com and Legal OnRamp.com as traditional print-copy forms of lawyer advertising loose favor and potentially die out.

Today, it cannot be denied that if a lawyer does not know the fundamentals of Web 2.0 that his or her ability to access the law, as well as communicate with (current and/or prospective) clients will be diminished. If you are not convinced, just take a few hours and look at the variety of legal and law-related websites demonstrating how some lawyers are using internet-based applications to effectively gather, store and disseminate legal information including the marketing of their own abilities as lawyers and communicators.

Damages: Attorney's Fees as Damages in California Under Judicially-Created Exception(s) to the American Rule.

In the last post, we discussed a court's authority to award attorney's fees in an 'exceptional case' pursuant to a statute that applied to patent litigation. The applicable statute thus provided an exception to the so-called 'American Rule' in the Qualcomm case. The American rule provides that absent a contract or statute providing otherwise, each party to litigation must bear their own attorney's fees. The opposing 'English Rule' of course prescribes that the loser pays.

Under California law there are also three judicially-created exceptions to the American Rule, namely, the "tort of another" doctrine, Brandt recovery and as damage recovery in malicious prosecution/false imprisonment cases. In the last edition of the California Law Journal (Litigation Section) attorneys Marc Alexander and William Hensley provide a history and note that these exceptions are applied in order to make a prevailing party whole and are not recovered as fees per se but rather are recoverable as an item of damages.

The "tort of another" exception has been articulated as follows: "A person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney's fee, and other expenditures thereby suffered or incurred." Prentice v. North Amer. Title Guaranty Corp., 59 Cal.2d 618, 620 (1963). Alexander and Hensley point out that it is essential for a litigant in proving recovery of fees under this exception that he identify a "clear violation of a traditional tort duty between the tortfeasor who is required to pay the attorney fees and the person seeking compensation for those fees." Sooy v. Peter, 220 Cal.App. 3d 1305, 1310 (1990). In other words the recovery of attorney's fees based on the "tort of another" must actually be based upon a tort.

Another judicially-created exception concerns the recovery of Brandt fees which allows for the recovery of attorney's fees against insurance companies in bad faith actions. See Gray v. Don Miller Assocs, Inc. 35 Cal.3d 498 (1984). A year later, in Brandt v. Superior Court, 37 Cal.3d 813 (1985), the California Supreme Court held that insureds can recovery attorney's fees in an implied covenant breach action to recover contractually-based policy benefits and that in that context that the fees were recoverable as damages. Id. See also Cassim v. Allstate Ins. Co., 33 Cal.4th 780 (2004) (providing guidelines for calculating fees for 'apportioned' work for joint contract/tort issues). While Brandt also applies to insurance brokers, there has been a reluctance to extend Brandt to fiduciaries outside the insurance context (e.g., against lawyers). See Schneider v. Friedman, Collard Poswall & Varga, 232 Cal.App. 3d 1276 (1991).

The third judicially-created exception to the American Rule provide for recovery of fees as damages in malicious prosecution and false imprisonment cases as "sanctions against the abuse of process the two torts represent. See Brandt supra and Gray supra. When pursuing fees under any of these judicially- created exceptions to the American Rule, the party seeking recovery must prove the damages in their case-in-chief unless the parties can stipulate to a post-judgment adjudication of them by the court.

Similar to California, Washington courts have long followed the American Rule on the issue of any award of attorneys' fees [Rorvig v. Douglas, 123 Wn.2d 854 (1994)] finding that they are not recoverable by the prevailing party as a cost of litigation absent a contract, statute, or recognized ground of equity. Id. See also, Easterbrooks v. Abrahams, 200 Wn. 636 (1939) (fees incurred for proving wrongful eviction); Winters v. State Farm, 144 Wn.2d 869 (2001) (common fund exception). at 861.

Patent Litigation: Qualcomm v. Broadcom: A Duty to Disclose Patents to Standards-Setting Organizations and Broadcom's Recovery of Attorney Fees.

In a December 1, 2008 decision in Qualcomm, Inc. v. Broadcom Corp., the United States Court of Appeals analyzed the duty of a products manufacturer to disclose patents prior to bringing suit against an adopting competitor. In review of the lower court decision of the United States District Court for the Southern District of California (Case No. 05-CV-1958), the Court's opinion helps define appropriate and legal behavior in the confusing area of standards-setting organizations ("SSO"). The SSOs are widely used in the technology industry to ensure, for example, that all lamp plugs can fit into the same electrical outlet. The lower court, in a 2007 opinion by Southern District of California Judge Rudi Brewster, punished Qualcomm for not disclosing patents to a standards-setting body and then suing adopters of that standard, namely Broadcom. The patents related to video compression technology and a standard developed by a Joint Video Team SSO ("JVT") that came to be known as the H.264 standard.

The district court concluded that Qualcomm had breached its duty to disclose certain patents to the SSO and as a remedy ordered that the patents (as well as related patents) were unenforceable against the world. Additionally, the lower court awarded Broadcom its attorney fees in the litigation (which exceeded $8.5 million) because of the pre-litigation misconduct by Qualcomm as well as for Qualcomm's misconduct (e.g., repeated false claims by Qualcomm witnesses and its attorneys and failure to produce key e-mail documents) in discovery proceedings in the case. The Court of Appeals affirmed the district court's rulings with the exception that it found the patent unenforceability remedy too broad as it was not limited to the SSO context at issue and remanded instructing the court to limit the remedy in scope to H.264-compliant products. The award of attorney's fees was made under 35 U.S.C. Section 285 which provides that a United States District Court "in exceptional cases may award reasonable attorney fees to the prevailing party". The case besides shedding some light upon disclosure duties of companies working with standards organizations, show the contentious nature of litigation concerning new and lucrative technologies and an example of abuse of the system by a win at all costs mentality. An interesting side topic concerns the use of attorney fee award(s) as a means to deter misconduct in litigation and as a means to compensate aggrieved parties which will be discussed in my next post.