Interview With An Inventor, Part II

On this fair Monday morning, let’s continue our Interview with an Inventor, started last week here with Part I.  My goal in these questions was to divine how much time this particular inventor put into actually trying to get his product out there and if litigation was part of the strategy from the outset, if at all, or if it was something that ended up being a necessity because of the 400 lb gorilla companies that are (theoretically) preventing new entrants into the marketplace.

In this part, we’ll cover the next three question in the 10-question series:

3.  How have you approached the “big players” in your industry to attempt to get them to license your patent? What resistance were you met with, and how have you overcome it?

4.  What is the biggest barrier for small inventors to overcome when trying to approach the “big players” in their market?

5.  For you and your product/patent specifically, what is the single most troublesome thing about current patent reform legislation?

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3.  How have you approached the “big players” in your industry to attempt to get them to license your patent? What resistance were you met with, and how have you overcome it?

I have had extensive engagements with big companies, about a number of my patents, most of it negative unfortunately. Despite the fact that I have extensive technical educational background (a BS in EE from Caltech) and industry experience (I worked at IBM and two startups) one still universally gets the NIH response from companies.  

Let me give you an example.  In one instance a friend of mine knew the founder of the company.  He got us in touch with inhouse counsel, who proceeded to tell us he did not want to see any due diligence or evidence materials that would explain the utility of the patents, either by way of their current or future business.  This was rather amazing to me, since I asked them how I was going to demonstrate the value of the patents if they were not going to consider what materials we had prepared to show …exactly that.  This is an example of the corporate “blinders” I mentioned before.  Inhouse attorneys are taught to avoid looking at anything, or commenting on anything that relates to third party patents. This pretty much means there is no opportunity for a reasoned discussion.

Finally we reached a compromise where we agreed we would at least TALK to outside counsel on the phone to explain the relevance of the patents.  This of course was rather inefficient, awkward, etc., and prevented any meaningful assessment on their part.  We also agreed not to initiate any lawsuit during a limited grace period, all of which was fine by us.  

Despite all these handicaps this company did in fact make an offer on my portfolio. For reasons that are too numerous to list here (but I posted about it online) negotiations broke down.  Sometime after the grace period expired, I sent them a polite letter explaining to them in detail now why the patents had value – an opportunity they prevented me from doing before.  They then proceeded to try and kill my patent filings in the PTO as some kind of preemptive strike or payback.  Unbelievably they “manufactured” prior art to make it look to the PTO that they had already come up with my idea before me.  This was pointed out to the PTO after I discovered it but it was not until years later that they admitted the charade. The whole affair was just appalling to me to see what lengths they would go to not only denigrate my work.

Since that time I have had an occasion to send a number of other companies what I consider fairly friendly letters inviting them to take licenses on technologies I have invented.   In almost every instance they don’t even bother to acknowledge your letter.

This is why so many small inventors seek other channels, such as through brokers, to help monetize their assets. They have neither the connections nor the muscle to get the attention of large players, who can simply ignore you until you find someone willing to represent you in a lawsuit.

4.  What is the biggest barrier for small inventors to overcome when trying to approach the “big players” in their market?

Access.  It is almost impossible, unless you know someone in the company with authority directly, to get any attention whatsoever.  If you send them a letter inviting discussions it will be ignored 99% of the time.  To some extent this behavior is a legacy of older, now defunct case law which made it prohibitive to talk to inventors, because that could expose the company potentially to a charge of “wilfull” infringement later. This created a corporate mindset that pretty much shut down any exposure to third  party ideas, no matter how useful they might be, out of fear of being called out later for having “infected” the company with an outside “virus” if you will.  Engineers in fact were routinely told (in earlier days at least) NOT to read patents of any kind, again out of fear of being “contaminated” with third party ideas.

IPTT Comments:  So this is very interesting to me. I do understand the idea of not wanting to talk to inventors because what if someone at your company actually had the same idea?  What if that idea was just a slight tweak and Mr. Big Company had actually filed a similar patent that was still pending…you don’t want to open yourself up to trouble in the form of treble damages for willful infringement if you talk to a sole inventor.  So this makes sense.  But as our inventor acknowledged and as I mentioned in my backgrounder , agent or broker companies exist to help the smaller player get in the door.  I wonder if inventors don’t want to take that route because they lose a percentage to the brokerage firm?  Does it give an inventor less street cred if they have to use a broker vs. get in the door on their own?  Not judging, just asking.

Which, by the way, I realize those brokerage firms are NPEs.  Yeah, I get it.  But let’s keep it real here:  a company that can knock on Mr. Big Company’s doors and help you get in is not the same as an Intellectual Ventures or IP Navigation who actively seek out nebulous patents and set about suing the world over them.  No, there are decent NPEs out there who serve just the type of purpose our inventor would need them for.  Like the patent Shark Tank, if you will.

congressjpg-84c7dc3227d9b3ec

5.  For you and your product/patent specifically, what is the single most troublesome thing about current patent reform legislation?

As I see current legislative efforts, they are mostly driven by an anti-patent rights bias, and therefore are almost exclusively are directed to reducing inventor/patent owner rights.  There is not a single provision in any of the proposals that makes even an attempt at balancing interests.  [In my opinion], the current (now tabled) legislation was crafted and sponsored almost entirely by large corporate interests who simply don’t want to respect or compensate small inventors for their technical contributions.  Consequently every provision is intended either to make it harder for the small guy to get a patent, to make it easier to kill that patent even if it is granted, or to make it impossible for that person to enforce it. Every aspect of the bill is engineered to facilitate what I would call “economic infringement” meaning, rigging the game to make it easier for big companies to simply take/infringe patents with the knowledge that their maximum downside is less than the economic advantage they derive from using the invention.

IPTT Comments:  I’m on record many, many times agreeing that legislation is not the way to curb patent trolling.  It’s right there in the name of the offender: “troll”.  It may slow them down temporarily, but overall, anyone called a “troll” is going to come back swinging a few months or years later with a whole new set of workarounds.  It’s impossible to stay fully head of them with laws.

That said, I don’t agree that the current legislative attempts were crafted solely to keep Big Companies from paying small inventors.  I think, rather, that they are attempts by politicians to seem relevant because patent trolling all of a sudden came into vogue.  Cool people like me have been following the problem for many, many years.  So, nice try crashing the party, Congresspeople.

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Because that’s a lot of words already I think we’ll stop here and pick up next time.  Look for the remaining parts Wednesday and Friday of this week!

JustSayin_small

IPTT

{Cool shot of Congress found here.}

 

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One thought on “Interview With An Inventor, Part II

  1. Pingback: The Problems With Legal Workarounds, Patent Scope, and Expansion of Patent Trolls to the East | Techrights

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