On July 20, 2005, readers of The Wall Street Journal’s Opinion pages were greeted with the headline: “Tech Times Are Good, So Why Not File a Lawsuit?” The accompanying column by Holman W. Jenkins, Jr., discussed a suit by Advanced Micro Devices, Inc. against rival Intel Corp. and argued that Hector Ruiz, CEO of AMD, is “shrewd enough … to realize that a lawsuit can be a branding exercise, a way to garner free media for an ‘AMD Inside’ message to answer Intel’s own long-running and expensive sloganeering over its chips.”
Assessing the merits of the AMD suit against Intel is beyond the scope of this article. However, The Wall Street Journal op-ed column raises an interesting topic that is seldom discussed publicly: the marketing implications of lawsuits, particularly those filed by one competitor against another.
Managers considering whether to file lawsuits traditionally have taken into account the cost of the suit, the likelihood of obtaining damages and the amount of those damages. Attorneys advise them on each factor by estimating legal costs, including the time of managers who would provide evidence; by attaching a probability to winning a settlement or, if the case actually went to court, winning a suit; and by estimating the amount of a settlement or of damages.
Such considerations, however, may not represent the entire cost/benefit calculation. Another issue involves the costs... To read the complete article, login or sign-up using the form below.
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