Stout Managing Directors John Bone and David Haas had an opportunity to sit down and discuss various patent damages topics with the former Chief Judge of the United States District Court for the Eastern District of Texas, David Folsom.

Stout Journal: Thank you for joining us this afternoon, Judge Folsom. Maybe we’ll start with a few background questions. Please tell us a little bit about yourself. Where did you grow up?

Judge Folsom: I was born and raised in a small town in southwest Arkansas called Murfreesboro, in a small county, Pike County, Arkansas. I graduated from high school in 1965 in a class of 36 students.

Stout Journal: Wow. A very small class.

Judge Folsom: When I graduated from high school, there was not a stoplight in the entire county, and there’s not one in 2013 either. So I was born and raised in a very small town, but a community of very good people and I was so fortunate to grow up where I did. I wouldn’t take anything for my childhood experiences.

Stout Journal: So how did you go from Murfreesboro to the bench?

Judge Folsom: Well, it’s a long journey. Where would you like to start?

Stout Journal: Well, what did you study either in high school or in college that gave you a taste for law?

Judge Folsom: Well, people often ask me when did you decide you wanted to be a lawyer? I laugh and say one hot summer day when I was about eight or nine years old, I managed to have a quarter, and some of my friends and I decided to go up to the local drugstore to have a milkshake. And we were walking by the office of a country lawyer, a storefront office, and it was after lunch. The lawyer had cleared the top of his desk and was taking a nap. I said – my dad was a construction worker – and I said, “That’s the type of job I want.” (Laughter.)

That’s not really the case, but I remember that as if it were yesterday. But, no, I really don’t have any explanation. I never had any members of my family in the legal profession. I always had a keen interest in government, history, politics, and I think that just probably naturally led me to the practice of law.

Stout Journal: Please tell us a little about your practice before going on the bench.

Judge Folsom: I graduated from undergraduate school in 1969. Taught high school for two years in Texarkana. Went to law school and graduated in 1974 and decided to come back to Texarkana and was in private practice for some 21 years before going on to the bench. Prior to going to law school, I had never set foot in a lawyer’s office my entire life. I didn’t know what the practice of law was all about, but was very fortunate in working for two fine trial lawyers, Damon Young and Nick Patton. I had an early chance to be in the courtroom often, and over the next 20 years had an opportunity to be in front of some very fine judges who I learned a great deal from.

Stout Journal: How did you decide that you’d like to be a judge?

Judge Folsom: I never had any interest or desire in being a judge myself. There was a vacancy in the district in 1993, and some local attorneys approached me about applying for the vacancy. After a couple of weeks of encouraging me, I submitted an application to the Senate committee that was filling the vacancy. And two years to the day from the day I submitted my written application, I was raising my hand to be sworn in, so I’m fond of saying be careful what you wish for – you may receive it. I became the first resident judge in Texarkana, Texas, since 1929 and served for 17 years before retiring in March of 2012.

Stout Journal: How did your early days as a trial lawyer differ from current practice?

Judge Folsom: It’s hard now for younger lawyers to gain experience in the courtroom. In my younger days, we had workers’ compensation, personal injury, and subrogation work that was important to us and our clients, but they didn’t have the aspect of betting the company on the case. So, as a result, we were given more of an opportunity to be in the courtroom. I think it’s so unfortunate now that it’s so much harder for younger lawyers with all the tort reform to get opportunities to appear in court to gain that valuable experience.

Stout Journal: Right. Particularly in the IP area.

Judge Folsom: That’s what I meant. Particularly in IP. So when young lawyers come by to see me, I encourage them to take criminal appointments, maybe work for the Department of Justice if possible and the U.S. Attorney’s office, those sorts of avenues to gain some much-needed court experience.

Stout Journal: Was it an easy transition to the bench for you?

Judge Folsom: When I went on the bench, I immediately started trying cases. I’ll never forget that just before I was sworn in, Judge Hannah, who had the Marshall docket, said, “David, why don’t you come down and watch me select a jury this Monday in a products case.” So I go down to Marshall and I’m seated in the courtroom as Judge Hannah introduces himself to the jury panel and the lawyers. Then he introduces me and he said, “This is David Folsom. He’s about to be our new district judge. He’ll be sworn in Friday. We’re going to start this case next Monday and he’s goingto be your presiding judge.” So, I had a moment of shock, but it was my first case; I was sworn in on Friday and I started trying a products case on Monday.

Stout Journal: Not like you thought it would be?

Judge Folsom: Judge Hannah a few years later told me in a conversation, he said, “David, we were taking bets around the chambers whether you would agree to try the case or try to find some reason to not try it.” And I said, “Which way did you bet, Judge Hannah?” He laughed and said, “I’ll never tell.”

Stout Journal: Why do you think the docket in East Texas expanded so much?

Judge Folsom: Early on, the docket in Marshall was almost entirely personal injury-related, products liability, automobile accidents, those sorts of cases. The docket in Texarkana was almost nonexistent, so in 1996, lawyers are quick to find out where there’s a possibility to obtain a quick trial in a matter.

I had a case filed in my court, I think the plaintiff was Bell Atlantic, a Sherman Act case against AT&T, and that was my first complex case that was filed on the Texarkana docket. Within a few months of the filing of that case, a second case was filed that took a considerable amount of my time for the next couple of years. The State of Texas filed the tobacco litigation in my court, so I had both of those cases going on parallel tracks. Soon after that, I started to see more commercial litigation, more Sherman Act cases.

We saw for a period of time a lot of class action cases. Then, sometime in the late ‘90s, I probably saw my first patent case. It was the case Ericsson v. Qualcomm and I thought what on earth is this creature? I had never had one of those before, didn’t know anything about that area of the law, and the rest is somewhat history, so to speak.

When Judge Ward went on the bench in 2000, as you probably know, he developed an interest and fascination in that area of the law, and he was quick to adopt some local patent rules. And after those rules were put in place, and it became known that he enjoyed those sorts of cases, many of them started to be filed. And I always had at least some portion of the Marshall docket.

Stout Journal: So you think that the particular judges and their interest in taking on these patent cases was what made East Texas a popular venue?

Judge Folsom: I think that’s an important factor because as you know they’re a lot of work. They’re difficult cases, not only from a technology standpoint, but also from simply the sheer amount of work involved. I think a certain amount of assurance that a judge was likely not to transfer those cases is obviously important from the plaintiff’s standpoint.

Generally, in the early time period of those cases being filed, Judge Ward and I always tried to maintain a scheduling order that would have the case ready for trial within 18 months, maybe 24 months of the filing date.

Stout Journal: Okay. What should a litigant in the Eastern District of Texas expect that would be different than he or she could expect in other federal districts?

Judge Folsom: Well, I’m not so sure you should expect anything different. I’ve seen lawyers from all over the United States. I’ve seen excellent lawyers that relate well to local juries. Whether you’re trying cases in New York or East Texas, I think the techniques are the same – being professional, being courteous, communicating well, being sincere, not trying to mislead. The same also holds true with your witnesses. All of those things that work in East Texas I think work equally well in any district, regardless of where you are.

Stout Journal: Is there anything unique about East Texas juries?

Judge Folsom: After cases were concluded in my courtroom, I would tell the jury panel, “Very shortly, I’m going to come back inthe jury room not to discuss your service in this case, but to hear your comments on how we can make the system work better to serve you and your needs in the time that you are away from your work and family.” And I would go back in the jury room with a law clerk, generally my courtroom deputy, and spend as much time as the jury wanted to on discussing whatever topics they wished to. I never tried to probe or pry into the reason for their verdicts. Some juries would like to discuss the case; others wouldn’t. I always respected their desires in that regard. More often than not they would ask, “Well, did we reach the right decision, Judge?” And I would routinely say, because rarely if ever did I disagree, “I think your verdict was supported by the evidence in the case.”

But my point is, over interviewing just countless juries over 17 years, I was always impressed with how hard juries work, and I think this is true whether it’s East Texas or New York or the West Coast.

Stout Journal: Were there any common complaints that you heard from jury panels?

Judge Folsom: Their number one complaint was, “Judge,” they would say, “Why do lawyers have to ask the same question 10 different times?” It’s really annoying to jurors and they wonder whether you’re questioning their intelligence. I often heard that, “Judge, do they think we were not intelligent enough to hear it the first time?” And I said, “No, that’s certainly not what they thought.” What I routinely tell lawyers, and I think professional witnesses, expert witnesses, should be the same, is simply don’t repeat, retread on the same subject matter. Juries are quick to understand the case, generally speaking, and quick to pick up on the themes. Be respectful of their time.

They’re also quick to pick up on unprofessional conduct. I often tell lawyers, “Let me assure you when you walk in to the courtroom and a jury is in the jury box, that they’re looking at your every move, your every comment, your interaction, whether you’re being courteous, whether you’re being professional, whether it’s to each other, witnesses, court personnel.” I never understood lawyers who wanted to particularly be disrespectful of a judge because juries bond with the judge, and when a lawyer makes an unprofessional comment or reply or gesture, jurors are really upset by that.

Stout Journal: Any particular thoughts regarding expert testimony?

Judge Folsom: From an expert witness standpoint, I think it’s very important to listen to the questions, address the questions, be responsive, and not change your entire style when you go from direct examination to cross-examination. Don’t change your personality. Don’t all of a sudden become difficult and overly cautious and refuse to respond. Juries are not pleased with that sort of conduct, particularly from a professional witness.

Stout Journal: From your perspective, does it matter where the expert is from? We’ve heard it said that it’s difficult to bring an expert in from say New York City into the Eastern District of Texas.

Judge Folsom: I don’t think so. As long as that expert is able to relate to people and he’s qualified and intellectually honest, I think that wins the day regardless of where they’re from.

Stout Journal: During your time on the bench, Judge Folsom, non- practicing entities, or NPEs, became a much bigger factor in patent litigation. How do you think NPEs have affected the litigation process?

Judge Folsom: Well, I think we see a lot more litigation as a result. But may I comment again on my jury experience in that regard? Early on, in the NPE cases, I saw a lot of defendants defend the case from the standpoint of this plaintiff is an NPE. They don’t manufacture anything; therefore they’re not entitled to a remedy as a result. And I saw that it wasn’t working with the juries. And I’ve interviewed or asked many jurors if the fact that the plaintiff didn’t manufacture anything – did that matter with you? And I don’t think I ever heard a juror say, yes, it mattered to me.

In East Texas, plaintiffs’ attorneys would routinely use the example of; say you own 40 acres of property 50 miles from here. You don’t live on it. You don’t do anything with it. Does that allow someone to come in and clear-cut the timber? You’re not going to find anyone in East Texas that will say that would be okay. So I’ve just never seen that being a big issue with the juries.

Stout Journal: We’ve seen over the years, again staying with the NPEs, that it’s become more difficult for NPEs to win large damages awards, primarily based on legal decisions and precedents. We had the eBay v. MercExchange case, which made it more difficult for NPEs to obtain injunctions in patent cases. We’ve also had over the last few years more cases that have tended to crack down on application of the entire market value rule.

Judge Folsom: Right.

Stout Journal: And we’ve also seen that it’s become more difficult for NPEs to join multiple defendants in the same lawsuit. A question for you – do you think the courts have gone either far enough or too far in instituting reforms that are affecting NPE litigation?

Judge Folsom: That’s one area I don’t think it’s particularly appropriate for me to say one way or the other. As a judge I just simply tried to follow whatever case law we had from the Federal Circuit or whatever legislation we had from Congress. So I think that’s more of a question for the Federal Circuit and Congress than for David Folsom, retired judge.

Stout Journal: In our previous interview of Chief Judge Rader from the Federal Circuit, he discussed his thoughts that courts might be able to tailor the court’s timing and procedures differently in large-dollar cases as opposed to smaller cases. Is that something with which you agree?

Judge Folsom: Well, I think we should always give thought to how to move the docket; do it quickly. Judge Davis made efforts in the Parallel Network case where he did exactly that. In that case, Judge Davis was confronted with hundreds of cases, and these were all pre-AIA cases. And he quickly had a special status conference of all the cases to discuss the plaintiffs’ litigation plan. Judge Davis then determined the three or four claims that would perhaps move the case on early claim construction, set the case for early claim construction combined with motion for summary judgment practice within a few months of the initial status conference, granted summary judgment on all of those cases, and it was recently affirmed by the Federal Circuit, and I think there were comments as to the innovative manner in which Judge Davis had moved those cases along.

Stout Journal: Not too long ago, Chief Judge Rader sat by designation in a number of cases in East Texas. Did you have the chance to interact with him when he was down there?

Judge Folsom: Well, I was the chief judge at the time, and we were so pleased to have him down. As far as being able to interact at that time, I think I was actually trying a case over in – a criminal case in Sherman when he was trying that case in Marshall, so I didn’t at the time. But we’ve had a lot of discussions about I think the benefit of that practice.

I had the pleasure and privilege, Judge Ward did also, and I think Judge Clark, serving by designation in the Federal Circuit. Judge Leonard Davis did that as recently as a couple of weeks ago, and I think it certainly makes us better district judges. And I read your article and I’ve discussed this with Chief Judge Rader. I think he feels it helps – helped him greatly as a circuit judge to appreciate the problems of the district judge.

I think it’s a wonderful method for us all to learn how difficult the other judge’s job is. I think we as district judges feel that occasionally appellate judges don’t appreciate the number of decisions and how quickly we have to make them, and then I assure you I never gave enough thought to all the problems and issues that occasionally district judges create when you don’t have an adequate record for appellate judges to make adequate decisions.

I just think it’s a wonderful practice, and I wish more of the judges from the Federal Circuit would take advantage of it, and likewise a wonderful learning experience for a district judge to serve at the Federal Circuit level, or on regional circuit.

Stout Journal: How does it work when a Federal Circuit judge sits by designation? Does he or she actually hand pick a case or do you, as chief judge, assign cases?

Judge Folsom: You know how that always works. We give away hard cases that we don’t want to try. (Laughter.) No, when now-Chief Judge Rader was here, I think I carved out a few cases that were ready for trial.

Stout Journal: When you were sitting by designation at the Federal Circuit, what were the one or two things that you took from that experience that helped make you a better judge when you got back to the district court level?

Judge Folsom: I was always, I like to believe, cautious at trying to have a full record, that any appellate judge that reviewed a record of one my cases would understand what I did and why. They might not agree with it, but at least they would know how and why I arrived at a particular decision. The Federal Circuit experience impressed upon me how important it was, because occasionally you would read a record in a case and you’d be scratching your head saying, well – how did this judge go from Step A to Step D? What were the steps in between? I was so impressed when I went to the Federal Circuit to see how well prepared the judges were.

Stout Journal: Let’s switch gears a little bit and talk about your current practice.

Judge Folsom: Okay.

Stout Journal: You’re currently at Jackson Walker. Obviously you had a lot of choices. What influenced your decision to choose Jackson Walker?

Judge Folsom: Well, over the years I had experience dealing with various Jackson Walker attorneys. I was always impressed by their professionalism. I’m an old-fashioned guy. I believe very much in professionalism and courtesy. I just always observed that professionalism and courtesy with the Jackson Walker firm. They were a regional firm. So all of that factored in with me making the decision to go with Jackson Walker, and I’ve been so pleased with my decision. I hope they’re half as pleased as I am and we’re both happy, so to speak.

Stout Journal: So how has that transition gone from presiding over cases to mediating cases and counseling clients?

Judge Folsom: It’s been vastly different. Judge Bob Parker was a district judge in our district, and then he went on our circuit court of appeals. And Judge Parker told me, “David, you’re going to discover that after you take off the robe, you’re forever respected but no longer feared.” So now I don’t have any particular control over anyone. It’s just the power of persuasion and communication and I cannot in the mediation process require anyone to do anything. To be quite honest, it’s refreshing to not have that power to order someone to do something, particularly to order them to go to the Bureau of Prisons. That’s absolutely something I haven’t missed. But perhaps the biggest change is the lack of authority to order anyone to do anything. You’re left with communication skills and trust and credibility.

Stout Journal: Right. So do you find yourself mediating certain types of cases?

Judge Folsom: Well, the vast majority of my cases have been patent related, but I’ve mediated a few cases in other areas of the law, and certainly will mediate those.

Stout Journal: Under what conditions do you find cases to be most appropriate for mediation?

Judge Folsom: I think generally my experience has been that when you’re on the eve of trial, the judge has already decided most of the issues that are to be decided in the case. The parties have had rulings on Markman, summary judgment, all of those issues. They filed motions to strike each other’s experts, which you routinely see. A lot of the uncertainty is gone, and come next Monday they’re facing a jury panel. That’s generally when mediation is most effective. I do it at all stages of the litigation and, occasionally, it’s very helpful early on. Even though the case may not resolve, it oftentimes helps frame issues.

Stout Journal: What do you see as the biggest obstacles to settling a case through mediation?

Judge Folsom: Well, what I see oftentimes is – let me try to be diplomatic about this. I think parties being a little unreasonable, and this could be on either side of the case, on their assessment of the case. Maybe plaintiffs who don’t want to bend any on their damage model. And I often say, “Well, not many defendants are going to pay 100 percent of your damage model without a trial.” And then, occasionally, the flip side of that, defendants who refuse to pay any sum other than token amounts, and again I basically tell them, “Well, most plaintiffs are not going to give up their case without a reasonable settlement offer.”

Stout Journal: When you are mediating a case, do you typically prefer to have outside counsel involved in those mediations or do you prefer to deal directly with the parties? Have you noticed any differences in results?

Judge Folsom: I often assess it on a case-by-case basis. Sometimes you’d much rather be mediating and talking to the party representatives. Occasionally, for whatever reason, emotionally or whatever, that’s unwise. Occasionally, you want the lawyers out of the process. I don’t think there’s one size that fits all. Generally, if I can have the decision makers present that have a good working relationship, I always think that’s a very productive way to try to resolve a case, but that’s not always possible.

Stout Journal: Right.

Judge Folsom: Sometimes those decision makers, the emotion and anger of maybe the case doesn’t allow them to talk to each other in a productive manner.

Stout Journal: If you could provide a couple of suggestions to mediation participants to make the mediation process more successful, what would your suggestions be?

Judge Folsom: I always require a mediation statement, and I think it’s very helpful to understand clearly the procedural history of the case. I think it’s very important to understand the past settlement history in the case and a concise summary of the law. I have a mediation statement guide that sets forth what I request in about a 10-page document. I always request that the statement contain a candid assessment of the weaknesses of your case because I think it’s important for parties to acknowledge and understand that cases do have weaknesses.

Stout Journal: Do you typically suggest that the parties perform or look at some type of economic assessment in advance of the mediation session to get a sense of what kind of dollars you’re talking about?

Judge Folsom: That’s routinely contained in the section on settlement. I like to know about their damage model, particularly if you have a case where a number of defendants have already settled. It’s real helpful from the mediator’s standpoint, so you can compare apples to apples and oranges to oranges. What was the damage model to Defendant A that settled for X dollars and Defendant B, and that way it gives you a real feel or comparison of the range of settlement on the case you’re mediating.

Stout Journal: Okay. Just a couple of wind-up questions here. From your time on the bench, you’ve probably heard some very interesting arguments. Were there any particularly unusual or creative arguments that you recall hearing?

Judge Folsom: I loved Judge Rader’s comment in your prior article. Maybe the most effective arguments were not arguments. I think he referred to it as a conversation. I think that’s very effective.

I heard a lot of really fascinating what I’ll call life stories, and particularly these cases that I heard from inventors and how the invention came to mind and what drove their invention. I just think that plays so well with juries and fascinates them so much that those things really, really stand out.

Stout Journal: What do you, Judge Folsom, consider to be your greatest accomplishment on the bench?

Judge Folsom: I’m going to let others reserve judgment on that.

Stout Journal: Okay. Do you have any additional goals for your legal career?

Judge Folsom: With the blessing of good health, I hope to continue what I’m doing for another five to 10 years, and then, maybe it will be time for me to take a break and do a few things I’d like to do. As long as I continue to enjoy myself, then I’m going to continue working in the legal professional. I just hope generally that I am judged as observing the Constitution and being fair and courteous to people. And if I’m judged by that standard, I couldn’t ask for much more.

Stout Journal: That’s a good goal for any of us. So when you do take a break from your legal work, what do you like doing?

Judge Folsom: Well, I used to like to play golf. You need to complain to Bob Latham and John Jackson and others that are working me too hard. I haven’t played golf in about three or four months. My wife, Judy, and I also love to travel. Judy and I are very active in animal rights issues. I was on the local animal shelter board for about 10 years while I was serving as a judge, so we’ve always had an interest in those issues. I’m an exercise person. I used to run a lot until I wore out my knees and back, so now I’m more of a walker. So I guess my primary hobby right now is exercising, not much golf, but maybe when the grass is greener and I transition into this new career, I’ll be able to play a little golf.

Stout Journal: Thank you for your time and your thoughtful responses.