"so a patent issues, now what?" by kirby drake (ieee presentation)

So a Patent Issues, Now What?

Kirby B. DrakeSeptember 26, 2012

• “Genius is one percent inspiration and ninety-nine percent perspiration”

-Thomas Alva Edison

• Many patent applications filed each year but only 1 out of 3 actually issues into a patent

Perspiration + Time + Money = Patent

• 20 years of patent term – make perspiration and time worthwhile

• Most patents retired to file cabinet and not source of revenue generating activities

• 15-20% of all patents do not have their first maintenance fee paid – go abandoned

Making Use of Patent After Issuance

• Litigation

• Licensing

• Spinout or start-up business

• Partnerships, joint ventures

Options for Making Use of Patent

• Only about 1% of patents even litigated

• Whether litigated depends on technical area, what competitors are doing, ease of identifying infringement, how much money involved

• Want reasonable confidence before going into litigation

Litigation

• Elements of Typical Patent Litigation:

• Infringement

• Validity

• Enforceability

• Damages

• Trial by jury or judge

• Risk versus reward

Litigation

• A patent is not infringed – can only infringe a specific claim in a patent

• Specification may describe a device but irrelevant if patent does not accurately claim the device (or a component thereof)

• If an independent claim is not infringed, cannot infringe claims depending from it

• Can only infringe a patent that is in force

Infringement Considerations

• Patent can be invalid because of prior art that patent examination process did not find

• Patent can be invalid because patent holder offered claimed invention for sale and did not timely file for patent

• Patent can be invalid because of lack of written description, lack of enablement, or other defects in the claims

Invalidity Considerations

• Patent litigation is very expensive

• Unusual to recoup attorneys’ fees or costs

• Patent holder has no duty to grant license

• Need only prove infringement by preponderance of the evidence (e.g., 51%) but invalidity must be proven by clear and convincing evidence

• Patents generally presumed valid

Evaluating Patent Allegations

• Acquire – secure rights to patent (license or purchase) to leverage exclusivity of patent

• Attack – destroy patent by defending yourself (if patent holder refuses to negotiate, patent too weak to justify acquiring, but patent relates to field warranting protection)

• Avoid – take nominal license and continue core business with minimal interruption

• Delay – nominal response to demand letter


• Understand potential economic and strategic impact of allegations

• Nuisance suit or allegation?

• Allegation by a direct competitor?

• Risk of injunction?

• Potential damages and possibility of redesign to avoid infringement (including costs and time to implement)?

• Any patents available to assert against accuser?

• Options for resolution?

Defending Against Patent Allegations

• Assemble team to help with evaluating allegations

• Attorneys

• Responsible product managers

• R&D

• Sales and marketing

• Information technology (IT)


• Determine scope and meaning of claims

• Assess whether product could infringe claims

• Evaluate whether patent is valid

• Assess potential impact on business should patent be valid and infringed


• Determine importance of allegedly infringing product to business

• Cost to discontinue use

• Using a non-infringing alternative

• Designing around the patent


• Operate from position of strength

• Learn what patents or other IP may be available to assert against accuser

• Evaluate all possible defenses – invalidity, infringement, enforceability

• Strong invalidity or unenforceability defense helpful to put in better negotiating position


• Determine whether there are patents that will prevent/limit ability to proceed in technology area

• Identify IP rights, relevant jurisdictions, expiration dates, how issued claims may be construed and whether claims may be invalid

• If possible infringement, may obtain freedom to operate through license negotiation

Freedom to Operate

• Patent protection limited to country where rights are obtained

• Patent may not be in force if patent holder has not made proper maintenance payments or patent has expired

• Patent issued in different countries may have broader or narrower claims

Freedom to Operate

• Defensive measures

• Deterrent to block others

• Create a patent thicket

• Signaling purposes

• Generate revenue through licensing and other business relationships

Unlitigated patents – Still Valuable

• Generate revenue

• Establish credibility of patent and business

• Well-known licensing programs• IBM

• Qualcomm

• Texas Instruments

• May not be an overnight success

Licensing

• Start-ups

• Spinoffs/spinouts

• Partnerships

• Joint ventures

Other Ways to Monetize Patent

"so a patent issues, now what?" by kirby drake (ieee presentation)

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