Maryland to consider tech courts

Growth of electronic commerce creates need, Taylor says

Could be a first in U.S.

Lieutenant governor among those who aim for economic boost

January 30, 2000|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

Maryland could be the first state in the nation to set up courts for settling legal disputes over high-technology business issues under legislation pending before the General Assembly.

House Speaker Casper R. Taylor Jr., the bill's chief sponsor, says a specialized court is needed because of the growing role that electronic commerce is playing in Maryland's economy and because the issues involved are increasingly technical and complex.

"We've got to come up with the judicial expertise to judiciously manage this new world of e-commerce we're coming into," the Allegany County Democrat said.

House Bill 15 would authorize the Court of Appeals to set up business and technology divisions in the state's circuit courts, though even Taylor figures the process could take up to three years. The bill would first require a yearlong study by court officials, legislators and members of the Maryland State Bar Association. The panel would report to the General Assembly by December 2001 on the court's feasibility and cost.

The idea has drawn support from Lt. Gov. Kathleen Kennedy Townsend, the Glendening administration's designated economic development ambassador. It also has won enthusiastic endorsement from several large Baltimore-based law firms, which are themselves specializing in high-tech commerce.

Lawyers predict that a separate technology court could be an economic magnet for the state, drawing new businesses with the promise that any litigation they have would be handled swiftly and surely by knowledgeable judges.

"Nobody likes to sue or get sued, but it's inevitable," said Paul Tiburzi, a partner at Piper Marbury Rudnick & Wolfe. "This would give Maryland an advantage in that regard."

A handful of other states have separate business courts, and Delaware's long-standing Court of Chancery is widely credited with helping to make that state a haven for filing corporate charters. More than 295,000 companies are incorporated in Delaware, including 60 percent of the Fortune 500.

California has developed guidelines for handling complex legal issues in its courts, but no state has set up a forum especially for handling technology disputes, according to Barbara Kelly of the National Center for State Courts in Williamsburg, Va. Judges all over the country, however, are pondering reforms in how business law is handled, she noted.

"I'm open-minded about it," Robert L. Bell, chief judge of the Maryland Court of Appeals, said last week. He cautioned that the task force created by the bill would have to determine whether a technology court is needed.

"You could argue it's necessary in a way because the court system is unbelievably slow and technology changes really fast," said Lowell G. Wilson, an Ellicott City lawyer and head of the state bar association's technology committee.

The bar association has yet to take a position on the proposal. One question to be resolved, Wilson said, is what niche state courts could carve when many high-tech disputes over patents and copyrights wind up in federal courts, which have a specialized appellate forum to handle them.

Not everyone is enthusiastic. "There's a question of whether there's a demand for it at this time," said Senate President Thomas V. Mike Miller.

Max Oppenheimer, a Baltimore lawyer who teaches intellectual property at the University of Maryland School of Law, said he thinks the value of a technology court would depend on who is assigned to it.

"It's the hottest area in the practice of law right now," he said. "That's where the money is now, so that's where the disputes are that need litigating."

But he also questioned how a state court could focus on technology issues, since many are now under federal jurisdiction.

"What is this technology court going to do?" Oppenheimer asked. "They're not going to hear patent cases or copyright cases. Those are exclusively the purview of the federal courts."

As for the hope that a technology court could be an economic development tool, Oppenheimer said, "I think it's anybody's guess whether ultimately it's going to be a business draw or not."

Other lawyers have few qualms about the court.

"To the extent that Maryland can handle efficiently and well disputes that arise in the high-tech world, it will be a more attractive place for businesses like that to locate," said James L. Shea, managing partner for Venable Baetjer & Howard.

"There really are a lot of technology-related cases," Shea said. "It's not just the new companies in the high-tech industry. Even traditional businesses are running into high-tech issues."

In recognition of the growing role technology plays in the economy, Venable added it as a fourth division within the 350-lawyer firm last year, with 60 attorneys specializing in technology issues. Piper has 150 lawyers in its 750-member firm focusing on the field.

While federal law covers a lot of technology issues involving patents and copyrights, state courts still have plenty of high-tech disputes to resolve, Shea said. Companies could wind up litigating over trade secrets and licensing of software, for instance.

He said judges could benefit from having training or experience in handling technology disputes. "That's a very difficult world for a judge to move from a criminal case and family law case to a motor tort case to this," Shea said. "You really at some point have stretched their capability to handle these cases."

Said Taylor: "When you get into the highly technical litigation in this new world of e-commerce and biotechnology and biomedicine to suggest that all judges are equal, that's an absurdity."

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