IP Asset Maximizer Blog

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2011-05-17T12:36:51.419-04:00

Good luck with your new blog!

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I think that you need to define an NPE. Universit...

2009-10-07T18:17:25.929-04:00

I think that you need to define an NPE. Universities are NPEs by most definitions. As well, I doubt that you know whether every company that asserts its patent against an alleged infringer is in fact practicing its own patent. Possibly it can't because it can't license technology it needs to practice the invention. So companies - like IBM and Microsoft and others - can be NPEs on certain of its patents. There is a tendency to view NPEs as "bad", but I don't really understand why.

Discussing the invention in contrast to prior art ...

2009-10-07T18:10:59.676-04:00

Discussing the invention in contrast to prior art has been known to come back and "bite" the applicant. I believe that it's cautionary to avoid the subject.

Thanks for the post. It is good to see law firms ...

2009-07-22T22:05:35.808-04:00

Thanks for the post. It is good to see law firms doing more to keep down costs.

However, with regard to your description of Ms. McKeon's billing structure, I am not sure what is different. Isn't this generally how most law firms work? I.e., a partner has one or more associates who bill at a lower rate working on the client matter such that the client gets a lesser fee than if the partner did all of the work.

Maybe what is new is using non-legal types to do the bulk of the work and drive costs even lower. However, the structure itself is the same old pyramid structure.

As a litigator with the unique experience of being...

2009-07-12T02:35:03.183-04:00

As a litigator with the unique experience of being in-house counsel, what is your opinion, if any, on a service like xraylegal.com which is trying to add transparency to legal pricing by formalizing the bidding process for legal services and opening up the bidding to the statewide pool of attorneys?

Our thrust has been the individual/small business market, but feedback from someone who has "bought in bulk," as it were, would be valuable. Thanks in advance.

Unfortunately, there really is no way for most peo...

2009-06-29T09:30:28.972-04:00

Unfortunately, there really is no way for most people to judge the quality of patent prosecution attorneys. For me and other folks who have practiced patent prosecution at the highest level, the best way to figure out whether someone is good is to look at their prosecution records. I can almost immediately tell if someone is competent by looking at what they have done before the patent office. Also, the question is not whether various firms are competent, it is whether a particular lawyer is competent. If I had to identify the main aspect that I think differentiates good attorneys from others is whether someone has prepared numerous infringement opinions or has engaged in litigation. I have found that trying to find fault in another's patent (as you do in opinion writing and litigation) has made me much more cogniscent of how I conduct myself during patent prosecution.

I agree that law firm work is becoming more of a c...

2009-06-29T00:19:30.097-04:00

I agree that law firm work is becoming more of a commodity. But, what is the best way to judge the quality of various firms? On the patent prosecution side, for example, it may be 5+ years or more out before it is possible to judge the worth of the law firm's prosecution work in terms of licensing revenues or other monetizing methods.

Hi Jackie, I don't have much of value to add here ...

2009-05-22T22:01:51.206-04:00

Hi Jackie, I don't have much of value to add here and if I did it would mimic what you or Judge Michel express. I did however Google NPE's and articles on them and came across a very interesting series of posts by Professor Adam Mossoff of George Mason University School of Law http://bit.ly/18fhT5

It seems that the issues we face today regarding patent trolls are not at all new. Elias Howe, America’s first “non-practicing entity” or patent troll successfully used the patent system in the 1850's to exploit his patent by forcing licenses in that era's hi-tech area - the sewing machine.

Take a look, I think you will find it entertaining at a minimum if not informative.

Take care,

Scott

The majority of the 'troll' problem seems to stem ...

2009-05-22T17:01:25.045-04:00

The majority of the 'troll' problem seems to stem from the lack of a 'looser pays' system in the US v. common law countries (ex. UK, Canada).

This, and the high cost of litigation in the US (in part due to the through discovery process and use of juries) can make it cheaper to pay not insigificant sums to feed the trolls rather than defend on the merits.

A recent decision from Justice Jacobs in the UK had this to say about trolls.

So how then did Aerotel make money from the patent? By litigation and the threat of litigation against users. And principally in the US. That is unimpressive, for it is notorious that at least from the middle-90s the US patent litigation scene had become immensely pro-plaintiff. A defendant faced with the possibility of litigation had to take into account all of the following matters: (1) the right of the patentee to insist upon jury trial (juries are apt to be pro-plaintiff); (2) the general level of damages awarded in the US – by juries; (3) the real possibility of triple damages for wilful infringement; (4) the fact that even if a defendant won he would have to pay his own, very considerable, legal costs; and (5) the fact that until the decision of the Supreme Court in eBay v MerckExchange U.S. No. 05–131 (2006) there was a strong view that even a non-exploiting patentee who won would get an injunction as of right.

Thanks for the post. In it you say "Such a functi...

2009-05-19T03:14:00.000-04:00

Thanks for the post. In it you say "Such a function could readily be handled by a business person who wears a legal hat, but I do not believe that a legal person wearing a business hat would suffice."

At some level we very much agree on this statement. I think the core lesson is that learning to "think like a lawyer" (as we are told in law school) often means issue spotting and concentrating on risk.

The business approach means being much more of a risk taker and taking a more practical and holistic view of where that risk sits within the business.

If someone's "day job" is to spot risk, then having them also act with a business hat on means some real conflict and difficulty. On the other side, the minutiae of IP law means that someone from the business side will need some detailed training and experience to work at a BigCo effectively in IP.

The answers are I think evolving and depend largely on the size and resources of the company.

Thanks

Jordan
http://www.tangible-ip.com

Evelyn I understand your concerns, but at the cor...

2009-05-18T22:40:00.000-04:00

Evelyn

I understand your concerns, but at the core, the issues you raise are not patent-related, but litigation/lawyer related. Patent litigation has become a highly lucrative area of practice (even while patent practice has become ever more commoditized). While I am sure that many people obtain or acquire patents as a business model, I don't kid myself that lawyers make this happen.

I don't think the answer is a "loser pays" system, however, as this would likely benefit the deep pocket patent owners who can practice scorched earth litigation. Rather, the key will be for lawyers to develop business models that do not provide huge returns on the kind of patent troll activity you properly complain about in your post.

Thanks, Michael, I enjoyed reading your NPE discus...

2009-05-18T22:29:00.000-04:00

Thanks, Michael, I enjoyed reading your NPE discussion.

I agree with you that we need a more principled way to define "trolls." I think you have made a good start with threading the needle with respect to NPEs. I also think you have done an excellent job on capturing the disclosure aspect.

One thing that I have been mulling over (and that I do not think is fully fleshed out in your NPE discussion) is how do we classify manufacturing entities that also acquire patents that they do not practice (either intentionally or because of failed business models). When these entities bring suit against others, do they get a "pass" because they manufacture some things but not this specific one? The modern, strategic view of IP is that it does more than protect those who actually practice. When we look at the folks who fund AST, I am sure that we will see a majority that also acquire patents for offensive purposes. I fail to see how they can be more "virtuous" than those who do not manufacture.

Lastly, I like to call folks who exploit patents "entrepreneurs." We may not like their business, but if it is legal (at least today), they have every right to do so.

Keep giving these great comments. You are really helping elevate the conversation! (and keeping me on my toes)

It is an abhorration of the patent system when sma...

2009-05-18T17:21:00.000-04:00

It is an abhorration of the patent system when small companies get sued for infringement without actually infringing the patent in question. Ultimately, smaller groups end up getting "shaken down" for fees by these trolls (there is nothing positive to be said about them). Big companies can fight these suits back and sometimes draw a line in the sand - small companies get to buy a license for a patent that they don't even infringe, since they can't afford to stay in until the end. Sometimes they get released after incurring massive fees and costs, without any reimbursement.

This happens regularly: a large firm, like Perkins Coie takes on representation of a patent owner on contingency and sues without prior diligence (which is supposedly required) on the patent as compared to the underlying process/workings of the products of the alleged infringer. Even when the owner/lawyers are shown there is no infringement - most of them take the "buy a license" approach. The law firm, on contingency, gets nothing if they release the company - and they use extremely aggressive and threatening techniques to force a license purchase (for their own benefit, mostly).

I represent a client in the imaging business who gets "sued" for patent infringement about once every 2 years. They have never actually infringed any of the patents underlying the suits, but they have incurred hundreds of thousands of dollars in legal fees and lost business due to the distraction.

I think the process for suing for patent infringement must be reformed to force a patent owner and its lawyers to show they have (i) contacted the alleged infringers prior to resort to litigation and after engagement in discussions and review of products/process, etc and are not able to reach an amicable resolution outside of litigation (perhaps through some sort of specialized patent mediation process); and/or (ii) have been able to legally obtain the products under question, have had technical expert evaluation performed and have identified infringement in that documented process - which should be made available to the alleged infringer as part of the suit.

I think it would be much easier for a company subjected to these suits to stomach it if the patent owner was required to produce documented, technical diligence that led the owner to reasonably believe there is infringement. One of the last suits my client was involved with was an absolute "shake down" - the client's product in question was downloadable for a 30 day free trial and the patent owner/lawyers never even tried. It cost six (6)months and $100,000+ for the company to get itself released from the suit - and ultimately, the others that were sued with them used one of my client's patents to show prior art and get the suing party's patent thrown out.

The focus shouldn't be if a patent owner makes a product - it should be that they are required, through evidence, to take reasonable precaution to not sue parties that aren't infringing and have technical evidence to make them believe there is an infringement.

I call this type of patent analytics a patent land...

2009-05-18T15:55:00.000-04:00

I call this type of patent analytics a patent landscape. For years, I have been trying to convince potential clients and organizations that it is only claims that matter (well, 99% of the time). My main business is performing patent landscapes and integrating them into business strategy.

I agree with both of you, but think we should look...

2009-05-18T14:41:00.000-04:00

I agree with both of you, but think we should look for a more principled way to define "trolls."

I took a cut at this in a letter I submitted to the FTC on Friday. Start at page 2. Troll discussion at page 9.

http://brokensymmetry.typepad.com/files/letter-comment-to-ftc-on-the-evolving-ip-marketplace-final-1.pdf

Actually, the claims were really broad, as demonst...

2009-05-14T11:55:00.000-04:00

Actually, the claims were really broad, as demonstrated by the fact that the competition had to redesign the product in order to get around the patents. The problem is that the people who understood the business aspects of the innovation did not participate in the patent preparation process. Put another way, those who prepared the patents understood the invention, but not how the market would react to the innovation when G-P's product became the "must have" product. If the market effect of the innovation had been a part of the patent drafting process, G-P might not be fighting for market share today.

Scott- This is an amazing story. While I agree wi...

2009-05-14T11:15:00.000-04:00

Scott-

This is an amazing story. While I agree with Michael Martin that IP (and all intellectual capital) needs to be on the radar of CEO's, that won't be enough to solve these complex challenges.

There is a need for specific leadership around IP and IC. Two posts that are relevant to this discussion include Jordan Hatcher's call for a CIPO here: http://www.tangible-ip.com/2009/broken-ip-business-structures.htm and my follow-up discussion here: http://www.i-capitaladvisors.com/2009/05/07/who-is-in-charge-of-ip-and-ic/.

Hope to see more posts from you--thanks to Jackie for broadening the discussion!

This may just be me being slow, but isn't the prob...

2009-05-13T19:26:00.000-04:00

This may just be me being slow, but isn't the problem here that the patent attorney in question's drafting of the claims was insufficiently broad? From what you say I get the impression that they were simply playing stenographer for their clients instead of actually having a look at the invention themselves and trying to suss out what is really inventive about it.

Michael: Great comment. What you are hitting on ...

2009-05-12T08:34:00.000-04:00

Michael: Great comment. What you are hitting on here is that valuable IP can come from outside of the R&D/legal silo. More companies are realizing this is a promising way to maintain profits and capture efficiencies. The key is to educate employees about IP and to implement procedures that will allow the company to identify, capture and protect such innovations. Unfortunately, too few companies get this, but I am hopeful that the numbers will improve as IP Strategy becomes more prevalent in corporate America.

I need to read the article. It sounds very intere...

2009-05-08T11:02:00.000-04:00

I need to read the article. It sounds very interesting.

One minor aside, since I've been thinking about this since your last post on the topic. There is one source of competitive advantage that does not easily fit into any of the usual boxes for IP (patent, trade secret, trademark, copright) -- namely, the capability to produce goods at lowest cost.

Because this capability results from a variety of processes within a firm that synchronously produce the end result, it can be very difficult to locate its sources. Nevertheless I believe that a careful manager within a firm should be able to ascertain the sources of this competitive advantage by talking to employees about their day-to-day work.

One way to appeal to C-level execs on the need to get more serious about IP is to point out that this particular source of competitive advantage (i.e., the ability to produce at lowest cost) can be protected with IP rights.

That will get attention.

Of course, if you were to turn this on its head an...

2009-04-30T08:49:00.000-04:00

Of course, if you were to turn this on its head and say that obtaining licenses through the threat of litigation is an effective way of making money, this would be a whole other issue. It is the very fact that litigation is such a dubious and expensive way of settling things that leads people to obtain a licence rather than risk it. My former employers made thousands of patent applications in the US every year with exactly this intention.

I'm riemannzeta on twitter

2009-04-29T13:22:00.000-04:00

I'm riemannzeta on twitter

Thanks Michael. I am posting this on Twitter. Ar...

2009-04-29T13:18:00.000-04:00

Thanks Michael. I am posting this on Twitter. Are you there?

Don't miss the discussion of this going on at Fred...

2009-04-29T09:39:00.000-04:00

Don't miss the discussion of this going on at Fred Wilson's blog today here:

http://www.avc.com/a_vc/2009/04/the-venture-capital-math-problem.html

Why are there no comments here? This is good stuf...

2009-04-28T21:28:00.000-04:00

Why are there no comments here? This is good stuff.