Arbitrating the Patent Case Part XVIII: Presenting Testimony at the Hearing

We have previously had a look at many aspects of arbitrating patent cases, beginning with the type of cases likely to be arbitrated, arbitration clauses, and the arbitration process up to the hearing. We then began looking at the hearing itself, beginning with sequestration issues that can arise, opening statements, and case organization. We went on to presenting documents on the hearing, including the positives — and pitfalls — of electronic document presentation as well as some observations on how most arbitrators actually use documents during the hearing and decision-making process.

We will now take a look at presenting testimony at the hearing.

Transcripts.  First, an observation on having a transcript of testimony. Most arbitrators I know would prefer to have a transcript if possible. Most arbitrators, like most lawyers, are quite gifted note takers, having had decades of practice.  But notes often are not a perfect substitute for a verbatim transcript on closely contested issues. The transcript gives everyone a way to be very precise about what the testimony was.

But most arbitrators are also committed to trying to keep costs down if at all possible, so it is unlikely that an arbitrator will ever insist or even suggest it is necessary that the parties bear the additional costs of a transcript.

So when is a transcript worth the cost? Here is one way to think about it.

Many patent arbitrations are very document heavy so that the real evidence is in the documents.  In most patent cases, much of the key evidence is found in the patents, prosecution history, technical information about the involved products, financial documents, and the like. While explanations and discussion of these documents and the issues raised by them in testimony is important and may even be critical, a verbatim transcript of what was said may not be necessary or worth the price. The details are in the documents. A transcript could  be overkill.

Occasionally, however, a case can turn on the testimony itself, particularly where the documentary evidence is lacking and personal accounts are critical. If your case is likely to turn on that kind of information, then a transcript is likely worth the price. This is particularly so if there is a great deal at stake that helps justify the added expense.

Presenting the testimony.  Let’s turn now to presenting witness testimony at the hearing. Of course, as in any hearing the testimony will be under oath and subject to cross examination.  Because of the relative informality of the proceedings, it will be tempting to lead the witness to save time. Avoid the temptation. It simply is not as persuasive to ask the witness to agree to what the lawyer states as it is to elicit real testimony. The arbitrator already has a pretty good idea what the lawyer would like the witness to say. The real question is what the witness actually knows, not what he or she will agree to.

Because the rules of evidence in arbitration are relaxed, it may be tempting to take advantage of that and elicit hearsay and other testimony that would never be allowed during a court proceeding. But be careful. Don’t confuse the ability to get evidence “into the record” with the persuasiveness of the evidence. While most arbitrators will allow hearsay and the like because the arbitration rules allow it, the evidence is always taken subject to later reflection and study of the persuasive effect of the evidence. Rank, unreliable hearsay is rarely persuasive and likely won’t advance your cause. Indeed, that a party may be willing to stake its case, at least in part, on such evidence may be detrimental to the integrity of the case as a whole.

Expert reports as direct testimony.  One technique that has gained some sponsorship over the years is the use of the expert’s report as the direct testimony of the expert. This has some advantages. There is, for example, no question whether the expert’s testimony is straying from the opinions stated in the report because the report is the testimony.  Presumably it also saves time to use the report as testimony, because the arbitrators will have read the report in advance.

While originally enthusiastic about this approach, I am no longer a fan of it. Part of what we are doing with testimony – and why we don’t just decide everything on written submissions – is gauging the expertise and trustworthiness of the expert. Only observing testimony allows one to do that.  Perhaps most importantly, having the expert summarize what in the opinion is most important helps the focus the inquiry and pinpoints the most important aspects of the opinion and ultimately the issues in dispute. Testimony that is given with the understanding that the arbitrators will have the report, but also with emphasis given to the most important points, is the best way to proceed, in my judgment.

Written witness statements.  I have a similar view on  presenting direct testimony of lay witnesses in written witness statements that are then subject to cross examination. One simply cannot gauge the knowledge or veracity of a witness without listening to the witness’s testimony.  Indeed, we all know the statements are typically written by the lawyers, so it is as though we are simply asked to reread the facts section of the brief again. In fact, it strikes me as a little unfair to meet the witnesses only on paper when they are telling their side of things, and first meeting them as speaking human beings only on cross examination.  Cross examination tends not to bring out the best in most people.

Next up:  Post hearing briefing and closing arguments.