To Take Out Patent Trolls, Team Up

, Corporate Counsel

   | 1 Comments

Businesses have to take the defense against patent trolls into their own hands. This endeavor is not to be embarked upon alone.

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What's being said

  • Scott M

    Interesting approach. As the author well knows (as an experienced IP litigator), the larger problem conveniently ignored, is something far more insidious.Companies could significantly reduce their exposure (and society benefited) by re-examining their corporate culture. It is routine in many corporate sectors (especially those that are rapidly developing and highly competitive) to take whatever IP is needed, without licensing it, in order to gain the next edge against the competition. IP owners usually lack the resources necessary to prosecute and defend their claims in decade long proceedings. Knowing such full well, takers usually succeed. But not always. Carnegie Mellon University this week settled their 7 year battle with Marvell for $750 million, realizing that the case had multiple years more to go. As is typical, Marvell fought them not only in federal district court, but also at USPTO. It took CMU seven years and untold millions of dollars to "persuade" Marvell simply to pay for what Marvell had taken from CMU. Even then, the settlement was for only about half the value previously found by a federal court.VirnetX and SAIC are continuing their years long war with Apple, having now proven, in two trials, that Apple has been infringing their IP. The evidence adduced at trial that exposed Apple‘s willful infringement (which the jury found), was shocking. Apple‘s attempts to mislead the jury predictably failed, and the court will determine the penalty when it enhances damages. But of course Apple is taking full advantage of PTAB‘s IPR process to prolong the war, attempting to invalidate the IP (after multiple trials) using a lower standard (BRI), all the while draining the patent owners‘ resources. What could take up to ten years of litigation could have been avoided if Apple would simply license (pay for) the technology rather than just take it. But that is not in the culture. In any other context, taking what does not belong to you is called stealing. But not in corporate America, which is driven by the reality that it is more profitable to take now and (if necessary) litigate later than to license. The competition does it, so must we if we are to compete. Afterall, the patents aren‘t really valid and infringed, and we‘re not really stealing, unless/until PTAB denies an IPR, and, in a parallel proceeding, a jury finds the patents not invalid and infringed, and all such proceedings are upheld in he appellate courts. That process takes the better part of a decade, and only a small percentage of patent owners can afford such a fight. Meanwhile, millions (sometimes hundreds of millions) of profits are at stake. And the cost, in the unlikely event you are caught, is far less than the profits and market position earned in the meantime.Leadership sets the tone, including the moral climate, of every organization. Cultural failures, therefore, represent a leadership failure of the highest order. We would all be better served if we would focus our efforts on elect/appoint leaders who would consider the consequences of moral failure and take steps to reorient our moral compass.

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