Posts Tagged “patent value”

While admittedly a very special case, funded on both sides by very deep pockets, 1.7 BILLION dollars isn’t chump change to anyone. See http://www.bizjournals.com/boston/stories/2010/02/01/daily1.html.

One thing this settlement reinforces is the advice I always give clients: you only know you have a valuable patent when someone wants to copy your invention – either by licensing or infringing your patent. So the key to getting “the right patents, at the right time, for the right cost” is to ask yourself the question “If so, so what?” In other words, if you do get a patent issued on your invention (3 or 4 years from now), will anyone care?

  • Will your competitors simply find another way to build a competing product, having seen your patent application 18 months from now?
  • Will the cost of their R&D make your solution look attractive?
  • Will they already have a competing, non-infringing product on the market by the time your patent issues?
  • Will your approach represent a big cost savings?
  • Will the state of the art already passed by this technology?
  • Will you have the resources to defend your patent rights (or at least find an attorney to take your case on contingency)

Think carefully about these questions before investing in a patent. Remember that your patent can only stop someone from making, using, selling, etc starting on the day your patent issues. All of the sales the competition has made during your patent’s pendancy are not considered infringement.

Before committing to filing a patent application you should evaluate (with professional help) how broad your patent is likely to be, in light of the prior art and what your competitors are likely to do if they are blocked by your patent.

 

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Greg Aharonian of the Internet Patent News Service (patnews@ns1.patenting-art.com) wrote yesterday about a CEO of a reasonably sized technology company who asked of/lamented to his patent attorney about the futility/waste/high-risk of seeking and asserting patents. Here, in a slightly edited form, is that lament.

1. We file a patent application and eventually get it allowed ($5000 to $10000 plus)

2. We sue someone and are subjected to a Markman analysis, which redefines claims and may change the meaning of the words.

  • How can we prevent this from having a significant effect during the patent prosecution?
  • This process redefines the patent claims to mean something different than what we intended.
  • Can we be so specific in the patent specification that removes any latitude from the judge in interpreting the claim language? Define every word in the claim in the specification?

3. Then the claims can be put up for reexamination which seems to disallow most if not all of the claims and takes years to resolve.

  • It is outrageous that you go through the process of getting a patent and assume that it is valid and then after years and extreme expense some idiot in the USPTO says “oh sorry but my colleague should not have allowed the patent”!

4. The patent’s validity is then challenged.

  • How do we prevent our patents from being declared invalid by some non-scientific judge?

5. How do we file a patent that eliminates these and other problems assuming that infringement is taking place?

  • How do we do this at the earliest point in the process?

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These are great questions to discuss with your patent attorney during the patent prosecution process, which is the earliest point in the process where these issues can be forestalled. As a general rule, I suggest instructing him or her to:

  • Do a reasonable prior art search (including non-patent prior art). Re-examinations kill patents when new prior art results in an obviousness or anticipation problem.
  • Don’t try to be too “cute” with the “patentese”. Writing in straight forward language limits misinterpretation.
  • Don’t try to obscure the invention with circumlocutions (see above point). The purpose of the patent specification is to teach; hold up our end of the deal. We’ll live with fact that our competitor understands our invention if it means our patent is strong.
  • Write claims that match the breadth of our invention. And write the specification to match the claim wording.

You patent attorney may object; don’t be intimidated or find someone who can be your interface with the patent attorney.

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Many people question the value of pursuing patent protection for small to mid-sized companies.  They point to the expense of obtaining a patent and the even bigger expense of suing an infringer to defend your patent. Earlier this week it was announced that iRobot was awarded a $286 million Army contract that had originally been awarded to a competitor. Why the turn around – a recently filed patent infringement suit convinced the Army not to deal with the competitor. Do you  have any doubt that the cost of the patent is more than covered by the profit on $286 million in revenue? Or even the cost of their ~50 US patent portfolio?

 Admittedly iRobot is now well past the small to mid-sized company stage with revenue approaching $200 million. But it was not that long ago that iRobot was in that category (FY2000 iRobot Revenue est. $15 million) and at that point in their corporate development they had the foresight to be building their patent portfolio (the earliest iRobot application was filed in 1999; presumably they now own patents previously assigned to other entities).

The bottom line is that while many companies file for (and often are awarded) the wrong patents based on misguided perceptions, a company that understands what a patent can and cannot do for them, that can differentiate between a junk patent and a real patent, can reap a significant return on their patent investment.

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