Interview With An Inventor, Part IV

When last we left our inventor hero, he had answered all but two of my original 10 questions.  Question nine is really the heart of the matter to me in some ways.  As we all know, there’s not a definitive way to decide if a company is a patent troll, just like there’s no one right way to decide if an inventor is just out to stick it to the big guy or wants his just desserts for a lot of hard work.  This question helps with that.

And finally, I wanted to address all this governmental ballyhoo associated with patent troll legislation.  Not.a.fan.  But let’s see what our inventor says, shall we?

Here are the final two questions:

9.  How much time and effort do you put in to determining if infringement actually has taken place prior to filing suit/sending a demand letter? What resources do you use, meaning do you try and reverse-engineer products or technologies to see if competitors are infringing?  What’s your due diligence process, in other words?

10.  What are your feelings about the recent failure of the Senate to pass a patent reform bill? What would you like to see in a bill?

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9.  How much time and effort do you put in to determining if infringement actually has taken place prior to filing suit/sending a demand letter? What resources do you use, meaning do you try and reverse-engineer products or technologies to see if competitors are infringing?  What’s your due diligence process, in other words?

The standard for sending someone a letter vs starting a lawsuit against them is quite different.  In both instances however I make it a mission to make sure that I am extremely confident that the target is using the patent in question.  I think it kills your credibility when you make accusations that are not substantiated, or your proof looks very thin or unreliable. 

Furthermore I can tell you from extensive interactions that no reputable litigation attorney on the planet is going to help you with a case on contingency unless they are 100% sold in their own mind on the merits.  Patent cases are just too expensive to make mistakes so counsel (that I deal with anyway) tend to be very discriminating.  Again I’m sure there are people out there gaming the system but I think they are outliers and can be dealt with conventional bad faith rules/tools.

The cost of ascertaining may be simple in some cases where my patent covers something that I can readily buy and assess without too much effort. In some instances I cannot get access to a real product because it is only distributed through specific channels, or infringement is impossible to determine without “insider” information because the product is relatively opaque. So we have to rely on indirect information such as user guides, instruction manuals, and similar technical literature from the company.  Generally speaking though we try to directly analyze, test the item in question.  In some instances we have had to resort to an expert to fill in some gap in data that we can’t seem to solve in some other way.

Even when we do this, sometimes innocent mistakes do occur. We find that someone has stopped selling the product for example, or that the literature does not correctly describe their product/service.

IPTT Comments:  Your point about lack of reliable proof is a good one, and that’s one of the problems with demand letters v. actual suits.  Agree completely that the standards are different, and that’s what allows the trolls to troll.  Sending a demand letter, you’re not legally bound (currently) to provide much more than idle threats.  But what so many people don’t realize, and the trolls count on, is that you are not obligated to respond to a demand letter.  Instead, you should go look on That Patent Tool and see if anyone else has received a similar letter on the same or a similar patent and get in touch with them.  Shameless self-promotion, I HAZ IT.

10.  What are your feelings about the recent failure of the Senate to pass a patent reform bill? What would you like to see in a bill?

As you can imagine I am not terribly upset that the bill failed because I think it was overly partisan and biased heavily against small inventors.  What I would like to see is a return to the prior “rational” environment where technical and business persons would exchange information freely about patents, products, licensing demands, etc., over the course of several months without automatically triggering a lawsuit.    The worst decision – in terms of its impact in the the patent world – was the Medimmune decision, which handed a victory to large patent defense firms, because it meant that they were now able to file a lawsuit against the patent owner pretty much anytime the latter sent a letter that requested a serious discussion about taking a license.  This opinion absolutely destroyed all the typical pre-lawsuit discussions that used to occur between parties. Patent lawsuits were rare because the interested parties had all the time in the world to discuss/argue the merits of the patents, and only when that process failed did a lawsuit (sometimes) occur.

Nowadays patent owners know there is no point in sending a letter to a company, because some underemployed large firm attorney looking for another payday will immediately initiate a lawsuit in some remote region against that patent owner to try and gain an advantage.  As a result of course now patent owners simply file their own lawsuits first to preempt the defendants’ filings.  The patent world has become a sue first negotiate later atmosphere.  The Medimmune decision is effectively the patent litigators perpetual employment act.

Imagine what would happen now if they had passed the “patent owner pays” provision!  It would be like throwing gasoline on a fire because defense counsel would know not only can they start their own lawsuits, they are guaranteed payment at the end.

IMO any new bill should include a provision that substantially tightens the requirements for initiating and filing a declaratory judgement against the patent owner and thus eliminates the incentive to engage in lawsuits to settle disputes.  There should be a real and verifiable threat from the patent owner to imminently sue the company on a specific patent, product, etc. – in other words, use the same standard that is being proposed to be imposed on patent owners initiating an infringement lawsuit.  This is why I say the majority of the provisions are one-sided and do not account for protecting patent owner rights.

Court rooms, judges and jurors are inefficient mechanisms for resolving the merits of a dispute. They should literally be the forum of last resort and restoring the prior balance would eliminate 50% or more of all lawsuits.  You can compare the number of patent filings in 2005-2007 and then compare 2008-2010 and see readily what effect the Medimmune decision had on the patent world. It blew up everything.

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The patent world has become a sue first negotiate later atmosphere.  

and

The Medimmune decision is effectively the patent litigators perpetual employment act.

Those are gold quotes, my friend.  And both destined to become blog topics at some point.

Thank you a million times over to my favorite inventor for taking the time to answer these questions and provide insight into “the other side”.  I like getting a different perspective now and then, even if, and especially if, I don’t agree with all of it.   That’s how one grows and learns, by seeking out the opposite of what they think is true.

Man, I better think of something snarky and off-color here, that sentence up there was almost like I’m…human or something.  Blerg.

This concludes this series.  Next up will be Interview With a Patent Attorney, one from both sides.  I had hoped that we’d get a fisticuffs going when Article One Partners did something similar on a webinar a summer ago but alas, it didn’t come to fruition.  Maybe this time?  One can hope…

JustSayin_small_New

IPTT