July 27, 2010 at 13:50Likes Without patents
The purpose of this article is to help those who expect to enter Western markets with a product or technology to be prepared for that rainy day when you receive a patent infringement lawsuit in the mail. If you count on success, then it’s naive to expect that this cup will bypass you. Not go around. True, this is unlikely to be a bowl. Rather, it will be a large uncouth club. Club of the patent troll.
True, such a story does not await in every country. In most countries, laws protect society from patenting ideas. Having realized that software does not obey the laws of physics, which means that almost everything can be patented, most countries have significantly limited the possibility of patenting something in the field of software. There is, however, one small but important exception - the United States of America. We will mainly talk about this country.
It is impossible in one article to describe all aspects of the situation with patents in the USA. Besides, I'm not an American patent lawyer, and I don’t know all the subtleties, and if I did, it would hardly make sense to write about them here. Therefore, we will try to concentrate on the most important, and if questions arise, we will talk about them in the comments.
If the topic is interesting, I invite you to deal with it under the cut.
To file a patent and protect it is a troublesome and rather expensive affair. Historically, patents have emerged as a means of publishing inventions with the ability to preserve their rights to use them. Otherwise, the greedy capitalists stole other people's inventions and did not pay the unfortunate inventors. Over time, however, the alignment has changed dramatically, and now everything looks like that patents often work for large capital, allowing it to easily take out small companies that have the audacity to compete with them. At the present value of any, even the simplest, million dollar patent litigation, it’s hard to imagine how an unhappy inventor can protect his rights. Most likely, nothing. Unless he works for a big uncle who has a lot of money. Here is such a mutation.
When filing a patent application, you need to carefully consider why it is needed. A patent can come in handy for three purposes.
It should be added that the same patent can pursue two, and sometimes all three goals.
Now that we’ve figured out the types of patents, let’s move on to how patent disputes flow in the United States.
If you have received a registered letter with the text of a patent claim by mail, then you are already involved in the patent dispute. But this does not mean that you urgently need to look for a million dollars: everything can still be done. The plaintiff sends you a copy of the claim, the second same copy is sent to the court. Further, if you are not a large and wealthy company, your tactics are simple: by all means avoid the lawsuit. Moreover, the opposing side is also often interested in this. If you are dealing with a patent troll, then he also most often does not need large legal expenses and time spent on the hearings. Most likely, they want to quickly get their money and go troll others. But we will talk about the goals of the trolls later.
A lawsuit usually contains a simple statement: you are violating such and such patents in such and such products. Then you are asked to pay in full all the losses of the patent holder, which are usually valued at an exorbitant amount, and license these patents for sky-high money for the future or stop selling the product.
You ask: is it possible to study patents in some area in advance so as not to run into such claims? The answer is this: it is not only useless, but also very harmful. And that's why.
Firstly, if in the course of the consideration of the claim it turns out that you knew about the presence of a patent, then if the plaintiff wins, the punishment will be much more severe than if the court decides that you violated the rights of the plaintiff without knowing about the patent. In such cases, the court is sometimes surprisingly lenient. How does the court know what you knew about the patent? Under US law, you will be required to bring all your internal correspondence to the court upon request. Any indirect indications that not all correspondence has been provided or some part of it has been deleted threatens you not with administrative, but with criminal prosecution. Therefore, it is better not to joke with such things.
Secondly, there are a huge number of "sleeping" patents that will never be used against anyone simply because they were created as protective or to increase the company's capitalization. And trying to get around each of these patents can lead you into a dead end.
Thirdly, attacking patents are deliberately called in such a way as to hide them as much as possible from the public for the time being. No wonder they are sometimes called "patent mines." Thus, the most dangerous patents you will never find.
And finally: patent search is a rather expensive pleasure.
Now about the costs of patent litigation. I already wrote that the trial of one patent lawsuit costs from a million dollars and more. The situation is complicated by the fact that even if you win a lawsuit, the law does not oblige the other party to compensate you for legal costs. Based on the direct purpose of the patents, this seems reasonable: if the poor inventor is afraid of not being able to prove his rights, he will also have to pay the hefty expenses for smart lawyers, he will never dare to sue the evil capitalist. But in practice, this norm leads to the fact that patent trolling is regularly used to ruin companies or blackmail in order to reduce the purchase price of a company.
to be continued
Aram Pakhchanyan
Vice-president, director of
UPD data entry products department : Now the author of the article on Habré: aram_pakhchanian
True, such a story does not await in every country. In most countries, laws protect society from patenting ideas. Having realized that software does not obey the laws of physics, which means that almost everything can be patented, most countries have significantly limited the possibility of patenting something in the field of software. There is, however, one small but important exception - the United States of America. We will mainly talk about this country.
It is impossible in one article to describe all aspects of the situation with patents in the USA. Besides, I'm not an American patent lawyer, and I don’t know all the subtleties, and if I did, it would hardly make sense to write about them here. Therefore, we will try to concentrate on the most important, and if questions arise, we will talk about them in the comments.
If the topic is interesting, I invite you to deal with it under the cut.
What are patents
To file a patent and protect it is a troublesome and rather expensive affair. Historically, patents have emerged as a means of publishing inventions with the ability to preserve their rights to use them. Otherwise, the greedy capitalists stole other people's inventions and did not pay the unfortunate inventors. Over time, however, the alignment has changed dramatically, and now everything looks like that patents often work for large capital, allowing it to easily take out small companies that have the audacity to compete with them. At the present value of any, even the simplest, million dollar patent litigation, it’s hard to imagine how an unhappy inventor can protect his rights. Most likely, nothing. Unless he works for a big uncle who has a lot of money. Here is such a mutation.
When filing a patent application, you need to carefully consider why it is needed. A patent can come in handy for three purposes.
- Protective. This is the most reasonable goal when patenting. You patent the present inventions that you actually use or intend to use in your products. If you are attacked, you will be able to file your own patents, making life very difficult for the other side, which will either have to prove that your patents were issued incorrectly or convince the judge that, despite having your own patents, you use his patents. The chances of instituting a patent case against you are greatly reduced in this scenario.
- Increase company capitalization. You patent everything that can be patented, even if you have no further plans for the application of these patents, but there is a plan to sell the company at a higher price. Each patent increases the value of the company in the eyes of potential investors.
- Attacking. It is your choice if you intend to troll other companies. Such patents are rarely associated with real inventions. A real invention is usually a very specific thing, and an attack requires something that hits with a wide front to cover the maximum set of options for implementing something. Such patents are also called "umbrella". They are written in a muddy legal language, usually carry a trivial idea, and every time you wonder how it was possible to convince an expert in the patent office that this evidence is an invention.
It should be added that the same patent can pursue two, and sometimes all three goals.
Now that we’ve figured out the types of patents, let’s move on to how patent disputes flow in the United States.
Features of US Patent Disputes
Where does it all start?
If you have received a registered letter with the text of a patent claim by mail, then you are already involved in the patent dispute. But this does not mean that you urgently need to look for a million dollars: everything can still be done. The plaintiff sends you a copy of the claim, the second same copy is sent to the court. Further, if you are not a large and wealthy company, your tactics are simple: by all means avoid the lawsuit. Moreover, the opposing side is also often interested in this. If you are dealing with a patent troll, then he also most often does not need large legal expenses and time spent on the hearings. Most likely, they want to quickly get their money and go troll others. But we will talk about the goals of the trolls later.
A lawsuit usually contains a simple statement: you are violating such and such patents in such and such products. Then you are asked to pay in full all the losses of the patent holder, which are usually valued at an exorbitant amount, and license these patents for sky-high money for the future or stop selling the product.
About the Benefits of Patent Search
You ask: is it possible to study patents in some area in advance so as not to run into such claims? The answer is this: it is not only useless, but also very harmful. And that's why.
Firstly, if in the course of the consideration of the claim it turns out that you knew about the presence of a patent, then if the plaintiff wins, the punishment will be much more severe than if the court decides that you violated the rights of the plaintiff without knowing about the patent. In such cases, the court is sometimes surprisingly lenient. How does the court know what you knew about the patent? Under US law, you will be required to bring all your internal correspondence to the court upon request. Any indirect indications that not all correspondence has been provided or some part of it has been deleted threatens you not with administrative, but with criminal prosecution. Therefore, it is better not to joke with such things.
Secondly, there are a huge number of "sleeping" patents that will never be used against anyone simply because they were created as protective or to increase the company's capitalization. And trying to get around each of these patents can lead you into a dead end.
Thirdly, attacking patents are deliberately called in such a way as to hide them as much as possible from the public for the time being. No wonder they are sometimes called "patent mines." Thus, the most dangerous patents you will never find.
And finally: patent search is a rather expensive pleasure.
Patent litigation costs
Now about the costs of patent litigation. I already wrote that the trial of one patent lawsuit costs from a million dollars and more. The situation is complicated by the fact that even if you win a lawsuit, the law does not oblige the other party to compensate you for legal costs. Based on the direct purpose of the patents, this seems reasonable: if the poor inventor is afraid of not being able to prove his rights, he will also have to pay the hefty expenses for smart lawyers, he will never dare to sue the evil capitalist. But in practice, this norm leads to the fact that patent trolling is regularly used to ruin companies or blackmail in order to reduce the purchase price of a company.
to be continued
Aram Pakhchanyan
Vice-president, director of
UPD data entry products department : Now the author of the article on Habré: aram_pakhchanian