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R&G Tech Studio Presents: Intellectual Property Litigation Chair Steve Pepe


Time to Listen: 18:29 Practices: Technology, Media & Telecommunications, Intellectual Property Litigation, Intellectual Property

In this episode of the R&G Tech Studio, intellectual property litigation chair Steve Pepe sits down with technology, media & telecommunications co-lead Andrew Thomases to discuss how his background in electrical engineering led him to a litigation practice focused on the high-tech space.


Transcript:

Andrew ThomasesAndrew Thomases: Welcome to the latest episode of the R&G Tech Studio podcast. I’m Andrew Thomases—I’m co-chair of the Ropes & Gray technology, media & telecom industry group. Today, we have with us Steve Pepe, who is chair of the Ropes & Gray’s IP litigation practice and also leader of our firmwide sector on consumer electronics and hardware. Hi, Steve—thanks for being here. Why don’t we start off with some questions about yourself? Can you tell us what Ropes & Gray office you’re in, and how long you’ve been with the firm?

Steve PepeSteve Pepe: Sure. I’m in the New York office, and I’ve been with Ropes & Gray for it’ll be 25 years in September. I was originally with Fish & Neave. Fish & Neave merged with Ropes & Gray.

Andrew Thomases: And you’ve been doing IP litigation that whole time?

Steve Pepe: Yes, IP litigation. I did a little bit of transactional work earlier in my career, but for the last 20 years or so, it’s been just IP litigation.

Andrew Thomases: Great. I know a lot of people in the IP space have technical degrees or technical backgrounds. Do you have one of those?

Steve Pepe: I do—I have a degree in electrical engineering. I would not say I am an electrical engineer, but I do have a degree in electrical engineering.

Andrew Thomases: My guess is you understand electrical engineering issues much better than the average person?

Steve Pepe: I think that’s right, but my wife still won’t let me change a light bulb—she says that’s too complicated for me.

Andrew Thomases: All right, but hopefully the law is not too complicated for you. Why don’t you tell us a little bit about your practice?

Steve Pepe: I work mainly in the high-tech space, the telecommunication space for companies like Samsung, LG, or Honeywell. I also work in the automotive space for companies like BorgWarner. And then, I also have smaller clients like a company called Stylitics here in New York City that is a web browser company. So, I’ve really spanned all of the high-tech companies.

Andrew Thomases: When they call you and ask you to help them out, what kind of work do you do with them? What kind of projects or matters are you working on?

Steve Pepe: So, it’s mainly IP litigation, both on the offensive side and the defensive side. I also advise on portfolio enhancement, and deal with some licensing issues—but again, inbound licensing and outbound licensing.

Andrew Thomases: Let’s step back a little bit. When you talk about intellectual property (IP) litigation, what does that usually involve?

Steve Pepe: There’s different flavors of IP as I’m sure you know—there’s patents, copyrights, trademarks. Most of the IP litigation you see these days is in the patent sector. Trade secret is increasing, but most of what I do is patent litigation. I do some trade secret litigation, but it’s mainly patent.

Andrew Thomases: It sounds like you help companies that are both enforcing their patents, but also being the target of a patent litigation or an IP litigation?

Steve Pepe: Yes, I would over the last five years, I’ve had about a 50/50 split between offensive litigation and defensive litigation.

Andrew Thomases: You mentioned portfolio enhancement—what does that entail?

Steve Pepe: A lot of times, technology moves so quickly, and clients sometimes come to me and ask, “Where should we be focusing our patenting efforts? Where is technology going? What’s the next big thing? And should we be focusing on that area?” We also have clients that come to us and are concerned that their portfolios may be weak in certain areas, and they will come to us saying, “Should we be acquiring patents in this space? Can you help us identify patents that we could acquire?” So, it’s both through the internal process of taking a company’s inventions and being smart about seeking patent protection for them, and also looking outside of the company if a company perceives that it has weakness in a particular sector or a particular area.

Andrew Thomases: That’s fascinating. So, given your interactions with your clients lately, what are some of the hot areas that you’re seeing the clients investing in?

Steve Pepe: It’s really an exciting time these days with how quickly technology is moving. Just recently, in the news, you can’t turn on the television or surf the internet and not see something about AI (artificial intelligence), and how that’s really moving into a use by companies to increase productivity, to reduce costs. AI used to be this pie in the sky thing that everybody talked about, but now, it’s actually being implemented by companies to make things more efficient and more effective. You take AI and you link that with improvements we’ve seen with robotics and automation, and you’re going to see a lot of changes to companies in what they’re doing, and frankly, where they should be patenting.

We also see a lot of inventing and changes in the automotive industry as we move more and more towards EV and get away from internal combustion engines—when I say “EV,” I mean electric vehicles. Five years ago, people weren’t talking about transitioning to electric vehicles, and now, again, you can’t turn on the television or read something on the internet about the automotive industry and not see that there’s this momentum, this surge, towards getting away from internal combustion engines and moving towards EV.

Andrew Thomases: Not just automotive, but everywhere also seems to be coming a lot more connected, a lot of the internet of things and getting data over the air and such. Do you see that in your field?

Steve Pepe: I see that a lot—it’s been a huge area. I would say even more so than AI and robotics, this notion of making things smart, the internet of things, that shift, that momentum has been building for at least the last five years or so. And with that move towards connectedness, the internet of things, making things smart, there’s a whole slew of legal issues that come up with that, both IP-related and non-IP-related, and we get lots of questions from clients about how to best adapt and adjust to a world that is connected.

Andrew Thomases: I know you’ve both published articles and spoken on the topic of 5G. Any of the connectedness related to that? And how does that impact some of your clients?

Steve Pepe: It impacts every single client, this move towards 5G. If you take a step back and you think about 3G and 4G, we’re all familiar with that—we all know that 3G was a technology that was around ten years ago or so, and then we moved to 4G. That move between 3G and 4G was really incremental—there were some improvements in speed, there were some improvements in efficiency, but it wasn’t a leap. 4G to 5G—once 5G is completely and fully deployed, is a monumental leap in all different respects. With 5G, you’re going to see more machine-to-machine communication, which will open up all sorts of doors. For example, you could be driving in your car that has 5G enabled, once it’s fully deployed, and your car will be communicating with the car down the road, and you won’t even know about it. And if that car that’s ahead of you rides over some black ice, it will communicate seamlessly and without you even knowing to your car, and you may get a warning of “black ice ahead.” It’s things like that that 5G enables that we didn’t see with 3G and 4G. And again, it’s going to be transformative—5G is a transformative technology, whereas the move from 3G to 4G was more incremental.

Andrew Thomases: I know often your actual litigations involve products that are already on the market. Any interesting products that you’ve either defended or helped protect the IP of?

Steve Pepe: That’s a good question. One of the great things about being an IP lawyer is that the technology changes from case to case. And I’ve been very fortunate that over my career, I’ve dealt with some pretty interesting and different technologies. Years ago, I litigated a case that involved a gyroscopically stabilized weapons system for a Navy SEALs gun ship. That was many years ago, but that was some of the cooler technology that I’ve dealt with. In more recent years, because I do work in the telecommunications space, I’ve been dealing with a lot of cases that are focused on cell phones, base stations, connected televisions, things around those lines, and I really do think that that’s where a lot of the litigation in the near future is going to be—it’s going to be in those consumer products that are now becoming smart and connected. So, I’m starting to see that transition with my practice where almost every case was a smartphone case to now dealing with consumer products that are connected—we’re going to see much more of that in the future.

Andrew Thomases: Fascinating. Steve, do you have any war stories about any of the trials or matters that you’ve worked on?

Steve Pepe: A lot of us IP lawyers, we litigate down in the Eastern District of Texas, and that district has a reputation of having juries that are very much pro-patent. It’s always been a goal of mine to get an Eastern District of Texas jury to invalidate a patent, and I was fortunate enough to be able to do that several years ago in a case down in Texas where there were three patents that were asserted. I was responsible for one of them, and the jury wound up invalidating my patent that I was litigating, and found the other two valid, which wasn’t a great result. But at least the one that I was litigating, I was very happy to see that I reached my goal of getting a Texas jury to invalidate a patent.

Andrew Thomases: That’s pretty impressive, especially in Texas. So, can you give us a little bit more detail about how you accomplished that feat?

Steve Pepe: It was a very complicated circuit patent, and we had really good prior art. To someone who understands circuits and knows circuits, it was pretty clear that this prior art patent, that we had invalidated the patent that was being asserted. The real challenge was how do you teach that to a lay jury? That’s always the challenge for an IP litigator: putting things in terms that a lay jury without a technical degree will be able to understand and process—and the way we did it really was with effective use of graphics. We have an internal litigation graphics department at Ropes—not a lot of firms have that. I’ve spent hours with them side-by-side with the asserted patent and the prior art patent, and we were able to color code the patents in such a way that it become crystal clear looking at our demonstrative that what was in the prior art was in the patent. And what was interesting about the trial was that we were able to talk to the jury after, and that was the first question I asked: “You found one of these patents invalid, and the other two valid. How’d that happen?” And they went right to the graphics, and they said, “We didn’t understand the technology, but when you looked at the graphics, you could see that what was in the patent was also in the prior art patent, and we were able to match up the colors and see it exact. It was crystal clear during the examination of the expert that this patent was no way going to be valid. And then, when the other side’s expert got on the stand, that expert didn’t have any graphics at all and didn’t respond to your graphics. So, it was pretty clear to us, as the jury, that the patent was invalid.” So, that’s really a lesson there. And that goes with any patent case—it’s all about presenting things to a jury such that they can understand it knowing that they don’t have a technical background or a technical degree.

Andrew Thomases: Obviously, you’ve litigated cases in Texas. What other forums, states, and districts have you been in?

Steve Pepe: I’ve done in lots. Like most IP lawyers that have been practicing for 25 years, I’ve been in all the major patent jurisdictions: District of Delaware, Northern District of California, and Eastern District of Virginia. I’ve done cases as well in the Southern District of New York and Northern District of Illinois. I probably have litigated in 20 separate district courts over the course of my career. Also, Western District of Texas, which has become popular recently as well, and there’s a Northern District of Texas as well. And the ITC—I’ve practiced a lot in the ITC, and actually enjoy the pace of those investigations.

Andrew Thomases: The ITC is the International Trade Commission in Washington, D.C.—is that right?

Steve Pepe: That’s correct, yes.

Andrew Thomases: As I understand it, they can ban imported products if the ITC finds that they are infringing any IP right—is that right?

Steve Pepe: That’s correct. And what’s interesting about the ITC is that there’s no jury because you’re getting an injunction, an Exclusion Order as a remedy, and so, you’re presenting your evidence and the testimony to just an administrative law judge. That’s a completely different way of litigating when you’re litigating to an ALJ (an administrative law judge) as opposed to a jury. Juries, you need to have a theme, a story—you have to assume that they may not completely understand the technology, and they’re not going to have the time to dig into it. All of that changes your presentation to the jury—it’s all about a story and a theme. At the ITC, it’s the opposite—the ALJs don’t care about a story, and they don’t necessarily care about a theme. What they want is the evidence, and they’ll sit back after the hearing is over and they’ll go through the evidence, and they will try to get to the right result based upon the merits. And so, when you prepare for an ITC trial, an “ITC hearing,” as they’re called, you still want to have a theme and a story, but it’s really about focusing on the merits and doing a deep dive into the technology. A lot of these ALJs are really experienced with patent cases—they understand patent cases, they understand technology, and so, you could do a deeper dive into the tech, whereas, in a jury trial where you have limited amount of time. Like in Texas, you often don’t get more than five days—it’s hard to put on the same deep-dive presentation in Texas that you could do in the ITC.

Andrew Thomases: It sounds like you have vast experience across a lot of the different jurisdictions—it’s very impressive. Let’s turn to some more about you, some personal stuff. We’ll call this the “lightning round,” so I’ll ask you a bunch of quick questions, and you can tell us a little bit more about yourself. So, where do you live?

Steve Pepe: I live out in Long Island. Actually, I’m only about five minutes away from the Eastern District of New York Courthouse. Unfortunately, I’ve never had a case in that court. I’m waiting for one, but I haven’t had one yet.

Andrew Thomases: Yankees or Mets?

Steve Pepe: Yankees, absolutely.

Andrew Thomases: Any kids?

Steve Pepe: I have five kids.

Andrew Thomases: Favorite TV show?

Steve Pepe: The Office.

Andrew Thomases: Favorite character on The Office?

Steve Pepe: That’s a good question. I think it varies for me from time to time, but I would say I’m probably a Jim Halpert fan more so than any other character.

Andrew Thomases: All right, last question: In a peanut butter and jelly sandwich, which is more important, the peanut butter or the jelly?

Steve Pepe: I have some very strong views about this question. In my view, it’s neither the peanut butter nor the jelly that matter. What matters is the bread—if you have the wrong bread, if the bread is old, if the bread is stale, it can ruin the sandwich. So, peanut butter doesn’t matter much, the jelly doesn’t matter—it’s all about the bread.

Andrew Thomases: There you go—a bread man. Steve, thanks very much for your time—it was great to get to know you. Thanks again to all of our listeners. This has been the R&G Tech Studio podcast, available up on the Ropes & Gray website, on the R&G Tech Studio podcast page, and also wherever you get your podcasts. I want to thank all of our listeners for joining as well. Thanks, everybody.

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