January 3, 2013

10 Intellectual Property Questions that Might Be Answered in 2013

Question-Mark-300x2252012 was a momentous year in Intellectual Property law, but it left us with a lot of unanswered questions.  Here are 10 to ponder as we start 2013.

1.  What will the fall-out be from the full implementation of the America Invents Act?

2.  What will be the impact of the First-Inventor-to-File rules being implemented in March?

3.  Will the Federal Circuit and the Supreme Court ever get on the same page when it comes to a §101 standard?

4.  What is the future of software and business method patents?

5.  Will the US Supreme Court strike down gene patents?

6.  Who will be the next Director of the US Patent & Trademark Office?

7.  Will there be peace in the Smart Phone Wars or has another offensive just begun?

8.  Will Congress grant IP protection for the fashion industry?

9.  Will we continue to see an increase in patent litigation by NPEs?

10.  Will we see more $1,000,000,000+ damage awards in patent litigation cases?

I’m not sure we’ll have definitive answers to all of these questions prior to the end of the year, but the potential for the US Courts to significantly change patent law in this country is great.

So what do you think?  Do you think software patents are history?  Do you see peace in the Smart Phone Wars on the horizon?  Share your thoughts and some questions that I haven’t mentioned in the comments below.

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December 12, 2011

A Case for Patent Trolls

What if Non-Practicing Entities (NPEs) are using patents the way patents are meant to be used?  I know this is a provocative question, but I’ve given this issue some thought, and I think that this is a question worth exploring.

Let me start by saying, I am not for bogus patent law suits.  A company should never sue another company using bogus patent threats.  But if a company does infringe an existing patent, should it matter who owns the patent?

There aren’t many fans of NPEs, hence the nickname, ‘Patent Trolls’.  People don’t like the idea that a patent owner that doesn’t make the patented invention has the right to sue a company that does make a product that might be embodying the patented invention.  The primary argument against NPEs is the notion that the purpose of the patent system is ‘to promote the useful arts and sciences’ (as stated in the US Constitution) and increase innovation.  Increased innovation means a better society.  Patent trolls stifle innovation when they bring law suits against ‘real’ businesses because the money that would otherwise be spent on innovation goes to the lawsuit, damages, and/or licensing fees.

To some degree that argument is correct.  Innovation is stifled when patents are used to exclude other companies from practicing the patented invention.  But then again, isn’t that the purpose of the patent?  There is a difference between the long-term purpose of the patent system (further innovation and society) and the short-term purpose of the patent.  The US Government gives patent owners the right to exclude others from making, using, or selling the patented invention for the life of the patent.  Well, how does one exclude others?  The patent owner sues a suspected infringer for patent infringement.  If the patent owner doesn’t want to fully-exclude others, he can seek a license or give away his patent rights, e.g. open source software.  Alternatively, a patent owner could do nothing about patent infringement.  Ultimately, it is up to the patent owner to decide what he, she, or it wants to do with their business asset.

In the short term, patents are designed to give a patent owner (inventor, corporate entity, or troll) a 20 year monopoly in the patented invention.  There is little restriction on who can by or sell a patent.  There is no requirement that the patent owner has to make, use, or sell a product embodying the patented invention in the United States.  So, should it matter whether the entity doing the excluding is an NPE or a Practicing Entity?

NPEs aren’t cheating the system.  Nothing they’re doing is illegal per se.  (Again, I would never support any one bringing bogus patent suits.)  I think a lot of people are uncomfortable with the idea of companies that use patents to do nothing but sue companies for profit.  It creates an unlevel playing field, and that is scary, but not necessarily wrong.

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December 6, 2011

The Art of Patent War

An older attorney once told me that when times are good, companies build up their patent portfolios; when times are bad, they litigate.  Given the headlines today, I would say that might be true.  We have non-practicing entities (a.k.a. NPEs or Patent Trolls) filing an ever-increasing number of lawsuits, while the smart phone manufacturers and patent holders are pretty much engaged in WWIII with patent suits on multiple fronts around the globe.  (Check out my previous post on Patents as WMDs.)  This got me thinking.  How would Sun Tzu, the author of The Art of War, view intellectual property ownership, the bundle of rights that come along with IP, and the upsurge in litigation?   Keep in mind that it was Sun Tzu who said that “the supreme art of war is to subdue the enemy without fighting.”

There are two Sun Tzu quotes that actually hang on the bulletin board in my office.  They speak to how I view intellectual property, and the mission of my company, IP in focus.

1.  “If ignorant both of your enemy and yourself, you are certain to be in peril.”  I guess this quote is the opposite of the often-voiced quote “Ignorance is bliss.”  Let’s be honest.  Ignorance is only bliss until what you don’t know bites you in the behind.  What you don’t know can hurt you.  What you choose to ignore can cost you literally and figuratively.  (Google, the multi-billion dollar patent auctions, and the purchase of Motorola Mobile for $12.5 billion are great examples that come to mind.)  This quote reminds me that IP owners must actively manage risk as part of a comprehensive intellectual property strategy.

Risk can come in many forms.  Your competitors, employees, contractors, vendors, strategic partners, and outsourced manufacturers are all sources of potential risk.  At any given time, one or more of these groups can be the ‘enemy’.   You must understand your enemy and the risk your enemy presents to you, then take steps to reduce your exposure to that risk.   Without this understanding, you can’t possibly have a strategy that meets your business needs.  Without a meaningful strategy that takes into account your risk, your intellectual property rights are certain to be in peril.

2.  “Strategy without tactics is the slowest route to victory.  Tactics without strategy is the noise before defeat.”  So many bad tactics, so little strategy!  Having an IP strategy doesn’t do you any good if you don’t know how to make decisions.  Making decisions in a vacuum doesn’t help your company achieve its business goals.  When you have too much of one and not enough of the other, the only thing you can rely on is luck or your war chest to bail you out.  You must have tactics that make it possible to achieve the goals set forth in your strategy.

The mission of IP in focus is to make sure that our clients have the tactics they need to implement their intellectual property strategy, and achieve IP success.  Remember that what determines success is different for every organization.  However, I strongly believe that success lies in the intellectual property holder’s ability to conquer their enemy.

With that in mind, I will leave you with one more quote from Sun Tzu to ponder.

“In battle, there are not more than two methods of attack—the direct and the indirect; yet these two in combination give rise to an endless series of maneuvers.”  - Sun Tzu

Filed Under: IP Management, NPEs, Patent Trolls, Planning Tagged With: , , , , , , , Leave a Comment