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Intellectual Property Issues of Interest to High Tech Companies
Vol 4 Issue 10 November 2004

in this issue

Are you waving your rights good-bye?

The multi-national advantage

Tip of the Month



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 IP Links of Interest

There's no doubt it's expensive to file for patents all over the world and even the EU hasn't gotten its act together to create a single European patent. In addition to filing fees in each country you generally have to pay for a translation of your application into the language of the country - a particularly expensive proposition for Asian translations.

When all is said and done a company can easily spend a quarter of a million dollars to protect one piece of its Intellectual Property. At that sort of price you have to make intelligent decisions about where to patent and why.

  • Are you waving your rights good-bye?
  • "Worldwide" patenting is prohibitively expensive, but failing to file foreign patents can let the competition cut deeply into your market position. And unfortunately, there's not even a unified European Patent yet. Making intelligent foreign filing decisions can make or break your company

    Acting as your Director of Intellectual Property, TechRoadmap will help you identify where you should be patenting based on your expected markets and competition. Don't leave home without us.

    Review our services
  • The multi-national advantage
  • Most inventors know their patents are strictly territorial - that is, a patent only prevents others from making, using, or selling your invention inside the country which issued the patent. But in today's environment of multi-national corporations and instantaneous communications can a small company or individual inventor protect itself?

    Consider the case of sole inventor Gerald Pellegrini, who saw multi-national Analog Devices running a nice little business in motor controller chips ("ADMC" chips) - chips that probably infringed Pellegrini's patent. One problem, though. Pellegrini only held a U.S. Patent and Analog was manufacturing the chips outside of the country and only selling them to non-US customers. Clearly Analog, a U.S. company was profiting from this U.S. invention - and the owner of the patent was determined to get his fair share of those profits.

    Pellegrini tried several arguments before the court. He (and, apparently, it was Pellegrini himself) pointed out that that Analog is incorporated in the United States and has executive, marketing, and product line responsibilities for ADMC product line; that the ADMC chips were designed in the U.S.; that Analog arranged for the overseas manufacture of the chips from its U.S. headquarters; that Analog processed sales orders here and directed the shipments of orders from here. In short, he contended that Analog "supplie[d] or cause[d] to be supplied in or from the United States" a product that infringed his patent.

    Unfortunately for Pellegrini, he overlooked a critical point. It is the product that must be supplied in or from the U.S. Running a business is not an act of infringement, even if the business is to make a product overseas that would infringe if it were made in the U.S. The Court of Appeals took one look at this case and stated clearly, "patent infringement occurs where the offending act [making, using, selling, offering for sale, or importing] is committed and not where the injury is felt." Additionally, "the plain language of [the law] focuses on the location of the accused components, not the accused infringer."

    Perhaps Pellegrini should have taken a different tack (and perhaps he tried). Rather than suing Analog to stop it from selling ADMC chips overseas he should have concentrated on licensing Analog to import and sell them in the U.S.

  • Tip of the Month
  • Foreign filing is not for the faint of heart (or for the undercapitalized):

    • Make a Venn diagram of markets, competitors' factories, and your patent resources - Try to maximize the overlap, realizing that you may not be able to totally control your invention.
    • Play the 80% (or 60%) game - If you can control the major markets you may make it uneconomical for others to pursue what's left
    • Live within your resources - If you can't patent everywhere, perhaps you should be looking for a partner with more resources.

  • Disclaimer

  • Nothing in this newsletter should be construed as legal advice. TechRoadmap serves as an interface between companies and their legal counsel.