Testing the White Hat Effect in Patent Litigation

Abstract

Although everyone believes that telling a good story is an important part of jury persuasion, attorneys inevitably rely on their intuition to choose their stories. Experimental methodologies now allow us to test how effective these stories are. In this article, we rigorously test how two different narratives common to patent law affect mock jurors. First, we look at whether accused infringers can improve their chances of prevailing by being the aggressor. Prior studies have observed that accused infringers that file declaratory judgment actions to vindicate their rights win more often than those that are sued by patent holders. However, these results may simply be an artifact of the selection effects. For example accused infringers may simply be suing on stronger cases. To date, no studies have tried to control for these selection effects and determine whether it is truly the story that sways juries. Second, we looked at whether an accused infringer can influence mock jurors by making a few disparaging remarks about one kind of patentee’s business model, the non-practicing entity (NPE). NPEs, often pejoratively called patent trolls, may have a more difficult time prevailing at trial than practicing entities do.

To test how these narratives affect potential juries, we used a 2x2 between-subjects online experiment. We randomly assigned virtual mock jurors to watch one of four different scenarios of an abbreviated patent trial and render verdicts. The results showed that accused infringers that filed declaratory judgment actions prevailed more often than those where the patentee initiated the lawsuit. In addition, our study found that NPEs won less often than practicing entities. We discuss implications for strategy and policy.

Keywords: Patent, Trolls, NPEs, Declaratory Judgment, Empirical