Blue Jeans Cable Experience with Monster Cable

We've received a lot of encouraging words, questions, and concerns from our customers over the heavily-publicized threats made against our company by Monster Cable recently, and wanted to give everyone an update and an explanation. Our view of this situation is that, apart from revealing things like litigation strategy which, for obvious reasons, we need not to speak about publicly, we want everyone to know exactly what this is about, why it's going on, and what the merits of the case are.

How It Began

On April 1, 2008, we received a letter from Monster Cable. Something about that timing seemed peculiar, and frankly, some things in this letter were silly enough to be an April Fools joke, but rest assured: contrary to rumors, we haven't made any of this up. We really did get the letter, a copy of which is available in .pdf format here. The letter, from an intellectual property ("IP") law firm called LaRiviere, Grubman and Payne, asserts that we have infringed no less than two registered trademarks and five design patents held by Monster Cable or by its Bermuda relative, Monster Cable International. As far as we have been able to determine to date, the Bermuda company has no operations or actual physical existence, though it does have a mailing address. (Are there any Bermudans out there who want to check it out for us? Drop us a note.)

First Thoughts

On first opening the letter, I was certainly surprised, and as anyone would, I had a good rush of adrenaline. For many people, that initial rush would be followed by a read-through and some degree of panic: "a large corporation is threatening to sue me! What can I do? How can I possibly afford to fight?" As I'll detail later, though, I spent a couple of decades in litigation, and I've had to respond to a lot of threatening letters. For someone who has been through this many, many times, that initial dose of adrenaline is followed by a period of careful analysis and cool contemplation. The important questions, of course, are simply stated but can be complex to answer: what are the merits of the claim? What would litigation over these issues look like? What would be the implications of giving in? What is the worst thing that could happen if I don't, and how likely is it to happen? What will it cost to defend? And, of course, what is the best way to respond, if at all? The first step in any potential litigation scenario is to calmly evaluate these things on the basis of the currently available information.

Monster's Colorful History with Intellectual Property Law

Prior to receiving this letter, we were already well aware that Monster had a troubling pattern of conduct where intellectual property laws are concerned. "Intellectual Property," in case you're not familiar with the term, refers primarily to three related branches of law: patents, trademarks, and copyrights. Monster Cable has a history of threatening litigation over intellectual property disputes on the very thinnest of grounds. For example, Monster sued the Disney Corporation over the title to the movie "Monsters, Inc."--evidently taking the peculiar view that the word "Monster," because it is a trade name for a brand of cables, may no longer be used commercially in its original etymological sense to describe an actual monster. Christopher Lee and Hammer Films, watch out: next time somebody drips some blood over that coffin and Dracula is reconstituted to rule the night, you're getting served with a summons and complaint directing you to appear in the United States District Court for the Northern District of California.

Other litigation commenced by Monster, and very definitely in the silly-and-frivolous category, includes a suit against a small vintage clothing store in Camas, Washington called Monster Vintage (named after the owner's cat, Monster. No word yet as to whether Monster Cable will sue the cat, but last I checked, animals were not answerable to civil suit.); a suit against a children's ski-school operator called Snow Monsters ("oh, crap! I meant to buy a video cable, but because of this confusing trade name, I've just signed my kid up for ski lessons!"); a suit against the Discovery Channel over the program named "Monster Garage"; and probably a few we haven't heard of. These are only the cases that have actually gone to litigation, and so probably represent the very best claims Monster has been able to muster; can you imagine how many completely asinine cease-and-desist letters this company must be responsible for?

Monster also has occasionally brought suits arising out of intellectual property other than its trade name. A suit against Ultralink over connector design was settled, on terms unknown, some years ago. More recently, Monster sued Audioquest, and lost, over a utility patent relating to dielectric-biasing cables (you may have seen these; they involve a battery connected to the cable to apply a DC voltage across the dielectric). Monster has recently faced a preemptive suit from Audiovox for declaratory judgment (in other words, Audiovox sued Monster only because it was clear that Monster was about to sue Audiovox) arising out of some other speaker cable patents. As far as we have been able to determine, Monster has never brought and won any intellectual property litigation at all; it has either lost, withdrawn, or settled every suit it has brought.

In addition to this litigation, Monster has been active in proceedings before the US Patent and Trademark Office, opposing, delaying, and generally making a nuisance of itself whenever someone tries to register a trade name having the word "Monster" in it. In fairness to Monster: these proceedings, however vexatious and frivolous they may be, are not lawsuits. Whether one considers them "litigation" or not is a matter of definitions, but if they are regarded as litigation, they're only administrative litigation as opposed to full-blown court proceedings.

Unfortunately, intellectual property law does lend itself to this sort of bullying, and some companies, like Monster, become addicted to the practice. A law school classmate of mine who spent a number of years as general counsel to Intel coined the expression "patent troll" to characterize people who do this sort of thing (though the usual sense of the term would not include Monster; generally a patent troll is someone who has no actual products, and exists only to accumulate intellectual property and threaten others with it).

My Background

What Monster probably didn't know before sending me this letter was that I spent quite a few years of my life as an attorney, doing a wide variety of litigation work. I graduated from the University of Pennsylvania Law School back in 1985 at the age of 23, and went to work in Philadelphia for Margolis, Edelstein, Scherlis, Sarowitz and Kraemer, a firm doing insurance defense litigation (and its New Jersey division, then called Slimm, Dash & Goldberg). Although the main diet of the firm was fairly routine accident work, I did most of my work in more complex areas; much of it was federal civil rights litigation, but we also did a little bit of almost everything. I left Margolis to return to my home town of Seattle, where I continued working in litigation for another thirteen years, to 2004. I retired from litigation when it became apparent that the cable business, which my wife and I started in 2002, was going to be large enough to take all of the time and attention I could give it.

As a litigator, once I learned what I was doing, I tended to be fairly contentious. I never liked to let bullies and rascals get away, and I had a penchant for going after people in ways that they hadn't anticipated, often obtaining results which colleagues had assured me were impossible. I would win summary judgment for plaintiffs in civil rights actions--something I had never known anyone else to even attempt. I beat the State of Washington in regulatory cases which, when I ran them by colleagues, it seemed nobody thought I could win. My view was that, on many issues, many lawyers were just altogether too surrender-prone. It has been suggested to me that there was something in the water at University of Pennsylvania that made us all a bunch of contentious jerks; this may be true, and I find that my generally aggressive approach to litigation is shared by many of my old classmates.

I was glad to leave litigation behind, because it is immensely stressful to fight with people all of the time. To have a product to sell that was useful to people was refreshing after decades of trying to bash heads. But once you've been a professional combatant and retired, it's something you miss from time to time. There is nothing like the feeling of taking a situation that has gone badly wrong due to the wrongdoing of others and setting it right. There is, unfortunately, a corresponding ache in the gut when you've done everything you can to fix a situation, and know you're right, but cannot get your client the relief he needs.

David and Goliath

Before I get to the substance of the situation, let me spend a couple of minutes dealing with what I consider to be one of the great pervasive myths of litigation: that the little guy doesn't stand a chance when he's attacked by the big guy. I spent a good deal of my early career representing the "big guy" in the form of insurance carriers and their insurance clients (usually companies ranging anywhere from small to gargantuan), being attacked by the "little guy"--individual plaintiffs in civil rights, product liability and other major tort litigation. If we had such a tremendous advantage, it didn't show. In fact, some things about being big were always troublesome. We had more to lose; more to disclose; more witnesses in our employ whose testimony could not be predicted.

Once I was in the United States District Court for the Eastern District of Pennsylvania, in front of Judge Norma Shapiro (a great judge, by the way, for whom I have much admiration--and also a graduate of Penn). I represented a slate of police officers and a local municipal entity, all of whom had been sued by a Mr. Jones, who alleged that his civil rights had been violated in various ways. Mr. Jones was there representing himself, and Judge Shapiro urged him to go out and get counsel because civil rights law is complex and he would not be able to adequately represent himself. Mr. Jones told Judge Shapiro that he could not get a lawyer because all of the lawyers were terrified of our defense lineup (I was only one of about five defense lawyers in the case), which was backed by a number of large and powerful insurance companies. Judge Shapiro said to Mr. Jones something like, "Mr. Jones! Lawyers aren't afraid of big insurance companies -- they LOVE big insurance companies because that's where all the money is!" While the principle to which Judge Shapiro points is not directly applicable here (since recovery of money from Monster is not a primary goal of any litigation which may be brought), it is nonetheless true that nobody in the legal profession who has an ounce of sense is afraid of anyone on account of mere size or perceived power. A good lawyer fears people who have good claims or defenses, because he knows he will have to answer those whether his opponent is large or small.

The Fear of Litigation

One thing nobody should fear is litigation. That may seem crazy, but it is to me a core principle of dealing with threats. Why?

The first thing to realize is that anyone can sue you, at any time, for any reason. Monster Cable has the right to sue me whenever it wants. If you live in fear of litigation, and want to make sure you won't get sued, you need to relocate yourself to a part of the world with no legal system. A desert island would work, or you could move to a lawless place like Darfur. But most of us aren't sufficiently litigation-averse to want to do anything quite like that.

Knowing that anyone can sue me at any time and for any reason, I also know that how I behave when sued, or when threatened with suit, will have an enormous impact upon my risk of facing litigation again in the future. Imagine for a moment that there is a man who will always put up a thousand dollars to settle any litigation against him, no matter how frivolous. All anyone needs to do is pay the filing fee and serve the papers. Will this man be sued? Of course he will, and it'll go on until he has nothing left, because a quick form complaint costs nothing to draft and there are thousands of unethical people who would bring litigation for no good reason if they knew they'd collect even a small sum. Even if defense would cost more than early settlement, this man should fight.

Now, imagine that you are a company in an industry where a major player is a known IP bully and predator. The bully's not going away, no matter what you do; he is too well-capitalized for that. He comes around and demands things of you. Is it better to stand your ground, or to capitulate? In my view, giving money, licensing agreements, or any similar concession to such a company is a terrible idea. It's like having an aggressive panhandler on your block. As unpleasant as the panhandler is when denied, he becomes even more unpleasant if he is rewarded.

There is only one way to avoid litigation, and that is to give everything anyone demands to anyone who asks for it. That'll keep you out of litigation, but it is a terrible price to pay for the privilege.

Some Notes on Legal Correspondence

Lawyers are boring writers, no doubt about that. I was really surprised by the public reaction to my response to Monster because, to me, it reads more or less like typical legal correspondence, deadly boring to anyone not intimately involved in the dispute. I have sent many letters which are similar in general tone and approach, and none of those have ever been read by one hundredth as many people as have now read this one, nor with as much delight. As I was writing it, I passed over any number of opportunities to spice it up because they seemed to me to detract from the professional character of the letter; if I felt like giving free rein to my feelings, it would assuredly have been a colorful piece of correspondence!

To the extent that people have given me credit for a good deal of humor and sarcasm, I have to say that the credit is probably unwarranted. The humor which people find in this letter is largely unintentional and flows more from the bad legal reasoning represented by Monster's demand letter than from anything I could have said about it. Rational response to irrational behavior is sometimes knee-slappingly hilarious, to be sure, but I can assure you that I am the straight man in this comedy duo. If anything I have said is funny, it is only because it highlights or amplifies what the other fellow has said.

The Job To Be Done

Once I was confronted with Monster's letter, of course, I had a job to do. Counsel sending a letter like the one I received are typically hoping for one of two things. Either the recipient will not respond, which allows the sender to claim that the recipient is a willful violator of patent, unresponsive to demands and inquiries, or the recipient will send a conciliatory letter inquiring what it would take to make the demand go away. If, as the baseball people say, "hitting is timing, and pitching is upsetting timing," then demand letters are expectations, and responding is upsetting expectations.

My experience with lawyers suggests that even when people retain counsel, the response to a demand letter is liable to be too soft, too tentative, and too conciliatory; this no doubt proceeds from the fact that clients often lose their nerve when looking down the barrel of a lawsuit, and from the naturally conservative desire on the part of the attorney not to give his client encouragement when he may later want to nudge the client into settlement. (A hard, and true, lesson every litigator learns is that if you give optimistic advice at the outset, it's hard to break bad news later; but if you are guarded, cautious and worried at the outset, you can always break good news very easily. The client whose case "improves" over time thinks his lawyer is very good, whether he is or not.) When you know your rights, you know the litigation process inside and out, you know your facts, and you are the client himself rather than a representative, you can afford better to make your views known.

A basic maxim of legal correspondence is that while politeness is important, politeness has nothing at all to do with substance. As Churchill said, explaining his deferential salutation closing a letter to the Japanese ambassador ("I remain your most humble servant," or something like that), "when you have to kill a man, it costs nothing to be polite." When it comes to substance, I have my own maxim: "if you are right, there is no reason not to say so." No response to a demand letter is sufficient if it fails to demonstrate, in the most clear and frank terms, that the respondent believes he has the better argument (if, indeed, that's the case; if you receive a demand letter that makes a great deal of sense--well--then you have some more delicate strategic thinking to do). So, an important objective of this letter is to confront, so far as is possible given the fragmentary information provided by Monster, the claims being made.

Another element of the situation, which anyone dealing in pre-litigation correspondence will appreciate, is that it's important to make sure that you're as right as you think you are, and that if you are, your adversary knows it as well. It's always possible that what appears at first blush to be a frivolous demand letter may not be so, but may instead be the result of poor research or legal draftsmanship. It's important, therefore, to give the fellow at the other end of the transaction notice of the shortfalls of the case he has made, invite him to repair them, and express a forthright and honest willingness to do whatever the situation turns out to require. We would not want to infringe Monster's intellectual property rights, and if there is some information that has been left out of the letter which makes the case that an infringement has occurred, it's important to be clear that we are fully ready to take any needed action to remedy any demonstrated infringement.

An unusual element of this particular situation was, of course, that Monster's counsel very likely did not know that I was a lawyer, much less that I have spent many more years toiling in the field of federal litigation than he has. These demand letters are often, as this one was, couched in terms that presuppose that the recipient is not only lacking in specific knowledge of the law, but is an outright rube, ready to be gulled into doing darned near anything just to avoid the fearsome threat of litigation. Some people have taken some of the statements in my response to be boastful; I did not mean them to be so, but it was necessary to go into a bit of my background to let Monster's counsel know that an intelligent, well-documented and meaningful reply to my questions is the only thing that is going to get anything out of me, that threats unbacked by sound evidence and argument are of no use, and that fear is off the table. That last bit is very important. Settlement of litigation is all about fear, anxiety and uncertainty, and after a couple of decades in the trenches I am not about to get shell-shocked. I have always believed that, contrary to appearances, the calmest man on the field of battle is the Viking "berserker," whose passion is matched only by his mastery of his method.

The Response Letter

Taking those considerations to mind, I wrote a response letter, which now is evidently the most widely-read thing I've ever written.

If you haven't read it, you can see it here:

Blue Jeans Cable Strikes Back

The Reaction

Well, if I didn't think anybody would want to read it, I would never have published the letter. What I could not anticipate, though, was just how many people would enjoy it. The load crashed our server for a time, and the multiple online articles about it piled up thousands of comments, running about 100-to-1 positive. Personally, I thought everybody'd be asleep by the middle of page 2.

A few notes. First, although the commonly published version of the letter is addressed "Dear Monster Lawyers," that's not in the original. But yes, I did caption it "Your Letter, Received April Fools Day." Around here, I have taken to calling Monster's letter the "April Fools Manifesto."

The letter was taken to be, if I can judge from the comments on the blogs, forums and news sites, considerably more hostile than I thought it was. Mind you, I live in a world where people who want something out of other people know that they have to come forth with convincing evidence, not just buffalo their way into it. It's not the least bit unusual to ask someone who is asserting a claim to provide evidence for it, and to fail to ask when the need is evident is the very worst sort of sign of weakness. Nor, in my experience, is it the least bit unusual to explain why one thinks the claim won't stand up. What else should one say? "How's the weather, up that way?" There's really very little point in being gentle or indirect when you know exactly what the subject under discussion is and must be. So, while there is a directness to the letter which might be considered less than gentle, it is all in aid of an underlying purpose.

As I have indicated, too, others seem to have found this letter a good deal funnier than I thought it was. There are elements of comedy which it does highlight but for which only Monster's counsel can legitimately claim credit. I particularly thought that there was something bizarre about the idea of five distinct design patents, none of which look much like the others, all being infringed by one connector design. I tried very hard to imagine the design which could do this, and my best idea was something more or less out of "Transformers," which could be made to look like anything by folding, pivoting, and bayonetting bits and pieces into different configurations. There was something of the tragicomic, too, in Monster's intentional omission of mention of a design patent which was less dissimilar to our connector than any of the five patents it cited were, and which was expired. It shows a fair bit of chutzpah to send a demand letter with that fact in your pocket (and in the public record, where anyone can see it!), and it illustrates the degree to which Monster assumes that its victims will not do their homework.

Did It "Shut Monster Up"?

Litigation isn't won by sharp correspondence. I know that, and Monster's counsel may know that if he's not the fool he is determined to appear to be. I have watched some absurd and foolish litigation over the years, and for Monster to file suit in this circumstance would be extremely foolish, but there is no predicting the behavior of fools. I have always liked the saying that "irrational trends do not end rationally," and this is very much in that family of things.

Correspondence does not win litigation, but when cases are singularly lacking in merit, motion practice frequently does. For those of you without legal background, what this means is that prior to trial, there are motions that can be filed to ask the court to dismiss or grant judgment as to certain claims or defenses. If there are no valid, triable claims to go to trial, federal courts are fairly diligent about weeding that sort of nonsense out. Motions practice resembles correspondence in the sense that it is based almost entirely on written advocacy, and I consider myself to have a fairly good grasp of that. Certainly, if this case is filed, it will at some point come before the judge on motion to dismiss or for summary judgment, and I do not see Monster getting beyond that stage.

What Will Happen Next?

A lot of people have asked me what will happen next. A lot of others have speculated about what Monster will do. The speculations have ranged from "there is no way he'll hear anything further from them," to "now they have to sue him, and they will utterly destroy him." (To those last people: thanks for the kind thoughts, and I won't bother booking you a table at the victory party. To say I think your prediction unlikely would be a great understatement.) I will say with a happy and unconcerned heart that I do not know what Monster will do. If I were not able to live at peace with the idea that anyone can sue me, at any time, for any reason, I would find a hole to hide in or a desert island to live on. Litigation is not about avoiding risk, but about managing it, and if I had reason to think that I would lose, I would have written a different letter--still not to avoid, but to manage, the risk.

It has been suggested by various people that writing this letter the way I did heightened my risk of winding up in litigation with Monster. I don't know whether that's so, but it's entirely beside the point. The principal job of a letter in response to a demand is not the avoidance of litigation but the careful and thorough documentation of a position. My own view would be that the best way to avoid being sued is to make sure that others know that you have a strong position and that you are not a soft target, but more than that, I would argue that litigation avoidance should seldom if ever be a primary goal of response to litigation risks. Avoiding litigation, if that were the aim, is fairly simple: "Yes, sir, Monster, sir, whatever you say!" That is not my way of doing things.

Appeasing bullies almost always ends badly. It has the merit of postponing the ending of the story, but unless the story is ending anyhow (if, for example, you're planning to go out of business soon) that's a short-sighted way to look at things. We plan to be here for a very, very long time, and to all appearances, Monster Cable will be part of the landscape for the foreseeable future, so any planning on our part has to take coexistence into account. My view is that what this means is, simply, "plan for war." Planning for war is the best way to be ready for war, and, conveniently, is also the best way to avoid war. Whether we have war is, of course, entirely up to Monster; we will not start a war, but we are not the least bit hesitant to fight one if it comes.

For more information on this topic including the initial letter from Monster Cable, my response and the exhibits in question: