by Dennis Crouch
Professor Colleen Chien has published an unfortunate new Wall Street Journal essay titled “The Best Way to Fight a Patent Demand May Be to Do Nothing.” Chien’s factual bases appears spot-on: a large and increasing percentage of companies are refusing to even respond to patentee correspondence. The unfortunate aspect of the Chien’s essay is her suggestion that this really may be “the best way to deal with a patent demand.”
To be clear, Chien notes that a company will likely need to respond to letters by a “larger competitor,” a “patent bully,” or a well funded patent troll. Those entities are apparently serious and are ready and willing to use the court system to achieve their goals. What is left-over are patentees who lack the fortitude or desire to pursue a long court battle — especially where the potential damage award is less than six-figures. Those patentees are safe to ignore.
An unfortunate aspect of Chien’s suggested triage system is that it does not focus on merits – is the patent actually being infringed; is the patent valid? Rather, the focus is simply whether the patentee has the wherewithal and propensity to sue and whether the triaging-company can slide under the radar. Professor Chien’s suggested best practice approach moves us further away from any respect for patent rights and toward a more extreme system of litigation enforcement.
[…] my discussion of Professor Colleen Chien’s WSJ essay on “ignoring patent demand letters, Professor Chien pointed me back to her 2014 article […]
Seldom do I see in these columns something as penetrating and succinct as this (below) from Ned Heller, on why claims put to the USPTO routinely recite the “computer implemented” words:
“…the troll problem is almost 100% related to “computer implemented” type patents that are primarily related to methods of doing business of one type or another. They claim no improvement to technology because if they did, there be no reason to include “computer implemented” in the claim.”
You see, even though there are NPE’s who are asserting bundles of telecom patents, there is no troll problem in Europe and I’m now thinking that might be because the EPC bans patents on subject matter that is a business method per se (because however inventive it is, it is not an invention in a field of technology).
Thanks for that Ned.
Note the recent case of ContentGuard vs. Apple, which turned on non-infringement (rather than invalidity) issues.
First claim of US Patent 6,963,859 does not involve “computer-implemented”: A rendering system adapted for use in a distributed system for managing use of content, said rendering system being operative to rendering content in accordance with usage rights associated with the content, said rendering system comprising: a rendering device configured to render the content; and a distributed repository coupled to said rendering device and including a requester mode of operation and server mode of operation, wherein the server mode of operation is operative to enforce usage rights associated with the content and permit the rendering device to render the content in accordance with a manner of use specified by the usage rights, the requester mode of operation is operative to request access to content from another distributed repository, and said distributed repository is operative to receive a request to render the content and permit the content to be rendered only if a manner of use specified in the request corresponds to a manner of use specified in the usage rights. he
Three of the patents involved in the Apple litigation had survived IPR proceedings: 6,963,859; 7,269,576; and 7,523,072 .
ContentGuard had separately gone against Google.
If that’s not “computer-implemented”, it would seem to be not enabled.
I don’t believe Ned was referring to the express recitation of the term when he referred to “[computer-implemented’-type patents”.
Mindless rubbish of the worst (echo) kind, MaxDrei.
Penetrating…? No. Merely the same old anti-patent mantra from the same echo source.
The so-called “Tr011” myth drum being beaten again (hello, Executive Office – anyone home?)
The so-called – “all the problems are in one art field” fallacy. It Just Ain’t So.
The purposeful obfuscation and ig noring of the US Sovereign difference between “technological arts” and Useful Arts.
The fallacy of thinking that innovation in the EP is better than innovation in the US in the arenas where the form of innovation is both at issue and “allowed” (over-playing the “per se” and “as such” cards while pretending that software and business methods are not otherwise being patented in the EP. The “desire” to make it appear that the EP is strictly against software and business methods when they are NOT – even given the different sovereign treatment of “technological” is CLEARLY a false spin.
Doesn’t this suggest that the core problem is the complexity of the legal process?
And all of the courts’ patent reform efforts – eBay, Alice, Biosig – have they made the trial process (a) more predictable and simpler, or (b) more complicated and expensive?
And of all the serious problems that the Court has noted in its top patent cases, has the Court ever commented on the high cost and complexity of patent litigation? No? Isn’t that interesting?
This is one of the most positive developments to emerge from the last decade of patent turmoil. Insurance defense companies can evaluate patents based on logic rather than emotion or bluster, and make decisions based on the actual law – amortizing licensing costs and offloading risk from the companies. Better still, it’s a free-market solution that requires no legal changes.
DS: all of the courts’ patent reform efforts – eBay, Alice, Biosig – have they made the trial process (a) more predictable and simpler, or (b) more complicated and expensive?
With respect to Alice, it has certainly made establishing the junkiness of a lot of claims far more predictable and simple. Also less expensive (for the same reasons).
Better still, it’s a free-market solution that requires no legal changes.
It just costs everybody more money. But David Stein the Patent Attorney isn’t too bothered by that. Why should he be?
Baseless insult that Mr. Stein must be a “G-g-g-grifter slides right on by the “politeness police”….
In Pierson v. Eagle Screw Co., 8 Story’s R. 410, Story, Jo, again said: “But, upon the question of damages, I would upon this occasion state (what I have often ruled before), that if the plaintiff has established the validity of his patent, and that the defendants have violated it, he is entitled to such reasonable damages as shall vindicate his right and reimburse him for all
such expenditures as have been necessarily incurred by him be)Oond what the taxable costs will repay, iu order to establish that right. It might otherwise happen that he would go out of court with a verdict in his favor, and yet have received no compensation for the loss and wrong sustained by him. Indeed, he might be ruined by a succession of suits, in each of which he might, notwithstanding, be the successful party, so far as the verdict and judgment should go. My understanding of the law is that the jury are at liberty, in the exercise of a sound discretion if they see fit, (I do not say that they are positively and absolutely bound under all circumstances,) to give the plaintiff such damages, not in theirnature vindictive, as shall compensate the plaintiff fully for all his actual losses and injuries occasioned by the violation of the patent by the defendants.” Curtis (’67) at 345.
35 U.S.C. 282 Presumption of validity; defenses.
(a)
IN GENERAL.—A patent shall be presumed valid.
Ned, that only reinforces my point.
Courts frequently acknowledge that litigation is complex and expensive – en route to deciding whether to shift attorney’s fees one way or the other.
The courts fail or refuse to see that they are part of the problem – that their “smell tests” make the law muddied, and overly complex, and unnecessarily protracted and expensive.
Uncertainty leads to a clear lack of answers up front, which can persuade the parties to work out the results without resorting to litigation – or avoid disputes altogether.
The expense works a massive injustice by making the legal process available only to litigants with deep pockets.
And thanks to Alice and Mayo and Biosig and KSR, the problem is worse than ever.
David, I think that Story offers an insight on how the patent system is supposed to work. If the patent owner is forced to litigate after a notice of infringement he should be entitled to recover not only his costs but his attorneys fees and other expenditures necessary to enforce the patent. The only way out for the accused infringer would be to demonstrate that the patent was clearly invalid, that they did not infringe, or that the demand by the patent owner was unreasonable – and that the basis for these opinions was communicated to the patent owner prior to suit in the face of notice of infringement. Otherwise, the infringer must be deemed a willful infringer.
Hopefully, Halo will be decided this way.
Again this is another Anti-Patent Hit PR piece from Colleen Chien paid for by Google PR machine.
In July of this year Colleen Chien wrote an article in WaPo for the anti-patent hit piece.
link to washingtonpost.com
Couple of weeks ago I talked about the anti patent hit piece by Bernard Chao. And I said it is a PR effort by Google to write an Anti-Patent article in respected publications and Blogs every 2/3 weeks and Influence the Supremes/ CAFC/ Public.
Everyone in the industry knows that Colleen Chien served as White House Senior Advisor, Intellectual Property and Innovation from from 2013-2015. Also everyone knows that she was pushed by Google to have that position, Google wanted Michelle to take USPTO position and Colleen to take the white house position.
“In the past, Lee has worked closely with Colleen Chien who is now spearheading the White House patent initiatives.”
link to patentlyo.com
Also in the past they have has secret meeting to dismantle / Gut the US patent system for Google.
link to patentlyo.com
“Secret Exclusionary Meeting: Within hours of her announcement as Deputy Director, Director Lee and White House Patent Reform Coordinator Colleen Chien spearheaded a roundtable discussion with a select group of invited guests”
You will find as lot of article on how both have worked together and BOTH of them DO NOT believe in our incentive based US PATENT System.
Now folks what do “Michelle Lee” , “Bernard Chao” , and “Colleen Chien” have in common, and I am NOT talking about that all 3 of them are As ians !
NO I am talking about their employer/donor /sugar da dd y …Wait .. Wait ..for it .. it is Google!
Can someone do something about this dangerous alliance?
Colleen Chien, Michelle Lee and Bernard Chao will be spending Thanksgiving together in Silicon Valley and carve the US patent system and someone from this blog will be serving them drinks.
That being the selfsame Executive lead by the call (at least to get elected) for…
…transparency.
Try to believe it “folks.”
ZZ, if these folks were focused primarily on business method patents and functional claims, I would be with them. But that is not their agenda. They seem focused solely on ridding the system of the small inventor, the startup, who they dismiss as trolls regardless of the merits of the patented invention.
Quite aside from your own Windmill chases, Mr. Heller, the Ends just do not justify the Means.
Why, if the ends justify the means than one would simply shoot employees trying to leave to work for a competitor if they knew about valuable trade secrets. Perhaps they do that and other places in the world like, for example, China, a well-known “workers” paradise.
You quite missed the jab of Ends and Means there Ned (your own Windmill chases)
The financial disaster that was occasioned by the repeal of Glass Steagall was an object lesson that if it’s possible to make money by criminal behavior, some will try.
Section 9 (b) of the STOCK act is quite clear that executive branch employees are subject to the same strictures on passing insider information as those in private industry.
Decisions to institute IPRs, forthcoming claim cancellations, rejections of patent application claims, efforts to slow down prosecutions under a secret “quality assurance” program like SAWS or Second Look are all valuable insider info that can affect equity value. If private entities are receiving ex parte access to such info, it is a violation of insider trading law, for such information gives tremendous advantages in timing when to sell or to hold various financial instruments.
The SAWS documents were actually quite brazen that public trading status info should be passed up the chain of command.
There are exactly three things that Colleen Chien, Michelle Lee, and Bernard Chao should be legally discussing at informal chit chats with current or former Google employees or anyone else that might be able to trade on ex parte or secret USPTO info.
(1) How to make all patent processes completely transparent (to wit, neither secret directives given to Examiners or APJs nor secret “QA” programs),
(2) how to remove any arbitrariness or capriciousness from the system, and
(3) how to eliminate any appearance of arbitrariness or capriciousness from the system.
Excellent post, Mr. Martillo.
An observation for bloggers criticizing large entities:
The European Patent Office (EPO) has lobbed legal threats at bloggers who claimed the agency has too close a relationship with Microsoft.
The allegation that the software giant was unfairly getting preferential treatment for its patent applications was first made by Roy Schestowitz on his long-running Techrights site.
Schestowitz published a screenshot of an edited internal EPO email that listed patent documents submitted by Microsoft; the memo asked examiners to give the applications “the highest priority as soon as possible.”
The email’s author, a senior manager within the EPO, noted that the agency shared a “close cooperation project” with Microsoft.
Schestowitz’s accompanying blog post made a series of allegations that the EPO said were defamatory, and the agency insisted the entire post be taken down. Schestowitz unhappily complied. However, when the story was subsequently picked up by the World Intellectual Property Review (WIPR), which wrote its own article on the matter, it too was also approached by the EPO, and it revised its story to remove both the name of the EPO official and any mention of Microsoft.
link: link to theregister.co.uk
I am more than sure that you do not wish to hold out the current administration of the EPO as ANY type of shining example of any type of reputable behavior (just ask our resident EP expert MaxDrei, even)…
What a chumfe$t….
Of course, if careful consideration is completed, the letter can be c1rcularly filed.
Once that thought is safely squared away, the “camps” that certain people fall into – any any number of your typical mantras is quickly descended to here.
What a lovely cessp001.
Since when does “looking at the claim, determining a license isn’t needed—and then filing the letter away, rather than responding” — i.e., establishing a non-infringement position in good faith — actually constitute “doing nothing”?
David, I assume the non infringement position would be knowable to the patent owner based on public information?
Not necessarily. In my industry (biotech), it’s often impossible to confirm an entity is infringing a method patent unless you can actually get into the accused infringer’s lab or manufacturing facility.
This at least arguably involves some consideration of the merits of the patent and the patentee’s demand, but not clearly so:
Out of that research, a surprising finding emerges: More than a fifth of survey responders resolved the threat by “doing nothing.” This means, for example, looking at the claim, determining a license isn’t needed—and then filing the letter away, rather than responding.
Seems perfectly clear to me.
Maybe it depends on how desperate you are to find some sort of “scandal” where none exists, or on how sensitive you are to the fee-fees of all those poor, poor “little inventors” out there struggling oh so hard to feed their families.
Or maybe, Chien should not attempt to define the term of “Do nothing” to include the substantive step of first doing something (evaluating the letter), and then upon finding that the letter lacks merit, then (and only then) to do the next step of “do nothing.”
As to “fee fees” and such, well, that’s just Malcolm being Malcolm.
Dennis refers to this article as “unfortunate.” I’m not sure that even begins to capture it. Imagine the following advice from your attorney, “Only 1% of tax returns ever get audited, so I’d advise you to cheat because it’s very unlikely you’ll get caught.” I’d like to think that most law professors wouldn’t sanction that kind of advice.
But here’s Prof. Colleen Chien making an analogous argument in the patent realm. Read her article. Never once does she even consider the possibility that the “patent troll” might have a valid claim of infringement. Nor does she raise the possibility that the appropriate thing to do is have a conversation to find out if there’s a valid dispute that ought to be considered. It’s small wonder that patent owners feel the need to litigate; it’s the only way to even begin a conversation when companies follow this advice of counsel.
“Dennis refers to this article as “unfortunate.” I’m not sure that even begins to capture it. Imagine the following advice from your attorney, “Only 1% of tax returns ever get audited, so I’d advise you to cheat because it’s very unlikely you’ll get caught.” I’d like to think that most law professors wouldn’t sanction that kind of advice.”
Worse, “only 1% of muderers ever get caught, so I’d advise you to go on ahead and kill x person.” And plenty of other examples.
Aaric: Only 1% of tax returns ever get audited, so I’d advise you to cheat because it’s very unlikely you’ll get caught.
Is there any important distinction between paying taxes and not killing people, on one hand, and “infringing a patent claim” that recites a method of collecting data and thinking about a correlation?
Golly. Really tricky stuff, isn’t it?
patent owners feel the need to litigate;
“Pay attention to meeeeeee! I’m s00per dooper important cuz I have patent!”
Yes, we get it already.
“Is there any important distinction between paying taxes and not killing people, on one hand, and “infringing a patent claim” that recites a method of collecting data and thinking about a correlation?”
Brosef, you do know her article is about patents in general and not just junk nonsense correct?
A.E., as MM and I noted, the troll problem is almost 100% related to “computer implemented” type patents that are primarily related to methods of doing business of one type or another. They claim no improvement to technology because if they did, there be no reason to include “computer implemented” in the claim.
Further, because of this, one can almost predict that the vast majority of patents that claims subject matter that was allowed under 101 only because they include “computer implemented” or the like are invalid. They never should have been allowed but they were allowed because of the cooperation of certain factions in the Federal Circuit and because of the willful malfeasance of the leadership of the PTO during the nineties.
The troll problem is further related to functional claims, claims that appear to claim all means or methods to produce a particular result. Rather than hold these claims invalid as they should be, the Federal Circuit has begun to construe these claims under 112(f) as if that were the only problem with these claims. Such claims are inherently indefinite regardless that they can be construed to cover the corresponding structure and equivalents. This is the precise holding of Halliburton, which continues to be ignored by the Federal Circuit because to do so they would have to overturn their disastrous decision in Donaldson.
So, to some extent, Professor Chien is right. But her solution to the problem is to ignore demand letters generally rather than being to ignore demand letters from trolls who wield business method patents or patents that are functional at the point of novelty. Beyond these two categories, the patents must be presumed to be valid and her advice is simply wrong even if it is “efficient.”
The blatant reference to the “T” word goes right past the “p0l1teness p0l1ce,” while silence greets the call for the Executive Office to ANY DAY NOW address the well crafted call that exposes what only on the best of days can be called pr0paganda….
I guess times have changed from the days when the correct response to receiving a demand letter was to hurry up and file a DJ action in the venue of your choosing.
Dennis’ observation is interesting. I think the respect for patent rights diminished greatly with the advent of business method and software patents, combined with Lemelson-type patent enforcement and the emergence of plaintiff friendly judicial districts far from the centers of innovation and manufacturing. Prof Chien’s advice is a rational response to those developments.
W112W101KTA: Welcome to the world of “efficient infringement.”
Nothing new about that. It’s as old as the patent system.
Frankly, I’m surprised you didn’t see this coming.
That’s because it’s been around forever. Of course, the use of the term “efficient infringement” as some sort of boogie man buzzword by the folks who never saw a patent they couldn’t worship is a recent trend. But we certainly saw that coming (I did anyway).
The lack of respect for patent rights have been pervasive through the Courts, the USPTO, and Congress for years now.
ROTFLMAO. Revisionist history much? You guys are incredible. Thankfully we all aren’t mentally compromised sycophants who were born yesterday.
The “lack of respect for patent rights” began when the Courts and the PTO, led by the Federal Circuit, punched a massive gaping hole into the system by granting patents on protecting logic and information in the context of “hot” (but existing) technologies (i.e., personal computing devices — mobile and otherwise — and the Internet). At the same time, the PTO itself made zero effort to come to terms with the “technology”, the subject matter eligiblity issues that were so plainly presented by claims to such “technology”, and the relationship of that “technology” to the millenia of disclosures relating to the use of logic and information in the non-virtual world. The immediate result — endless reams of junk patents being filed by free-riders and grifting attorneys — was utterly predictable, as was the damage that would be done to the system overall.
Better than that: much of this was discussed in real-time here. And much of that discussion was greeted with hysterical derision by the same people who were most keen on exploiting the broken system. That fact, too, was pointed out in real time here in these comments.
There have been those that have been beating the drum for “lack of respect for patent rights” in the comments section of this website for many years now.
Of course we were. What is there about the massive pile of computer-implemented junk patents to “respect”? Go ahead and tell everyone.
The chickens have come home to roost — get used to it.
Indeed. You should get used to it. The best part: there is more to come. A lot more.
MM, agree.
The problems with the patent system that have lead to the undermining of enforceability of patents are related to the so-called troll problem, which can be traced directly to people wielding business method patents that were granted by the PTO in response to the PTO removing from the MPEP the reference to Hotel Security and the subsequent opinion by the Federal Circuit in State Street Bank that directly refused to follow that case, purportedly assigning it to the ashcan of history.
Thank God for Dudas. He appears to have been the one who began the fight back. Judge Chen was then the solicitor the patent office and led the fight to the Federal Circuit. It was successful, ultimately leading to the Supreme Court holdings in Bilski and Alice and to some degree in Mayo.
Now we have, in addition to the success against business method patents, the deal with the existing patents. Octane Fitness has largely solved that problem.
It is time to again begin thinking about restoring the enforceability of patents because patents are necessary for some businesses, particularly in the bio and Pharma fields, and for startups.
We also need to repeal 112(f) that authorizes indefinite claims – claims that do not contain within their four corners the novel subject matter.
We also need to limit 102(a)(2) prior art to novelty only for harmonization purposes and for the other reasons I have discussed. We further need to repeal 102(c) — the provisions about common ownership that possible were needed if patent applications were prior art for obviousness purposes.
and here too…
“the ‘Tr011’ problem”….
Tell me Ned, has the Executive yet corrected for the rather obvious propaganda along that line – as was required approaching SIX MONTHS now?
MM — Wait, you have a way of determining that a computer implemented patent is junk? This is a big breakthrough. Please share!
MM thinks all “computer implemented” patents (whatever those are) are “junk”. Is a “computer” somewhere involved? If so, it’s “junk”.
Functional claim at the point of novelty is his standard. No one has come up with a rebuttal that doesn’t allow for a parade of horribles to plausibly come true. I.E. the claim of “a solar panel having greater than 30% efficiency”
Please share!
Stick around, s0ckie. You’ll learn a lot if you’re patient.
Or you can get your daily dose of kool-aid from G ne and Stevie. They’ve never seen a patent they couldn’t embrace. Oh wait: that beer foam patent got some undies in a bundle. Go figure.
Agree with MM, Ned Heller, Synthesis and all like-minded commenters here. What is “unfortunate” is the patent industry’s support for an irrational and unjust system, not this Professor’s very rational response to it.
When there is no consensus towards the underlying fairness and justification of a legal system, it is ridiculous to expect people to have respect for it (or its adherents).
And that’s not even bothering to get into the philosophy of “efficient breach”, which regretfully gets short shrift in most legal circles with respect to contract law and should also be applied to intellectual property law.
Since a number of people seem confused by the meaning of “do nothing”, I thought I’d point out one of the first sentences in the article where the term is defined:
“This means, for example, looking at the claim, determining a license isn’t needed”
DC: An unfortunate aspect of Chien’s suggested triage system is that it does not focus on merits – is the patent actually being infringed; is the patent valid?
Again: that’s addressed in the first couple sentences of the article.
I suppose Chien could have written an editorial “focusing” on how infringement and validity are determined but I doubt the Wall Street Journal would have bothered publishing that.
Good point, but as you know there are a number of ways the recipient of a patent demand letter could conclude that “a license isn’t needed”:
1) the recipient is not infringing the claims;
2) the claims are not valid;
3) the patent owner is unlikely to be able to afford enforcement against the recipient;
4) even if the patent owner successfully sues for infringement, the potential liability of the recipient is the same or similar to what a license would cost.
s0ckie: as you know there are a number of ways the recipient of a patent demand letter could conclude that “a license isn’t needed”:
1) the recipient is not infringing the claims;
2) the claims are not valid;
Right. Those are so obvious they aren’t really worth mentioning.
the patent owner is unlikely to be able to afford enforcement against the recipient;
I highly, highly doubt that is what Chien was referring to when she said “look at the claims, determine whether a license is needed” given that in the most “popular” theoretical scenario (i.e., big evil copier computer corp versus poor little sooper genius compooter dude who actually did invent the Internet”) there would be no need to look at the claims, and in the other very common scenario (enforcement is going to be costly because the claims are highly dubious) this point merges with the obvious first points.
even if the patent owner successfully sues for infringement, the potential liability of the recipient is the same or similar to what a license would cost.
This analysis is impossible for a rational person to perform without (surprise!) looking at the claims to assess their validity, the likelihood of infringement, the cost of the infringement, the cost of design-arounds etc. More importantly, the analysis hinges critically on the terms of the license, specifically how much money is being requested. Do you think the typical patent tr0lls — you know, the junk wielding attorneys who broke the system and really don’t give a hoot about anything except for their own wealth — are looking for licenses commensurate with there contributions to progress? Maybe get some fresh air before answering that question.
Shill: “Do you think the typical patent tr0lls — you know, the junk wielding attorneys who broke the system and really don’t give a hoot about anything except for their own wealth — are looking for licenses commensurate with there contributions to progress?”
They are likely looking to get as much as they can. As others have noted, the article discusses patents generally, not only the “junk” patents you endlessly complain about.
Abstraction,
As I have noted, at their core (as rotten as that may be), his “arguments” (to be generous and call them that), are merely anti-patent rants.
He really does need to get into a profession in which he can believe in the work product produced.
Actually the bigger news in that article may well be the nice little chart she put in there talking about how much each way of fighting a patent costs folks in terms of annual revenue. That’s very interesting.
I’ve said it like a million times now, this is why you need an alternate court resolution system that doesn’t cost a million dollars. A small-claims patent court.
It’ll come as soon as you folks figure its necessary.
Two comments on the Professor’s strategy –
First, awarding attorney fees and/or treble damages are two valves that are available to the courts to curb this behavior by large businesses in cases where the little guy is ultimately successful in winning their claim. Here, it may be unreasonable for a large business not to attempt to settle a reasonable claim of infringement.
Second, this tactic has already been in use by many large businesses for some time – maybe its always been in play. Patent aggregators provide an avenue for the small guy to enforce their rights. It’s possible and even likely that the rise of the patent aggregator over the past decade was in response to increased use of this tactic by large businesses.
Absolutely!
This attitude:
“What is left-over are patentees who lack the fortitude or desire to pursue a long court battle — especially where the potential damage award is less than six-figures. Those patentees are safe to ignore.”
Is exactly why lone inventors sell their patents to “trolls.” You reap what you sow.
this tactic has already been in use by many large businesses for some time – maybe its always been in play.
Of course it’s always been in play.
And not just “large businesses”, by the way.
Any size business, or even a non-business, is aware that the best option (“best” for any number of reasons) is to simply to ignore certain bits of information that might represent a potential “threat” down the road. People have a limited amount of time to deal with stuff. Some stuff isn’t worth the time and, yes, that includes some threats of patent infringement.
How seriously would I take a patent infringement case brought against me by a guy like “Les”? Not very.
Thanks, Colleen, for the amicus fodder for the petitioner side in the Halo and Pulse cases! You just explained exactly why the Supreme Court needs to restore the flexibility of enhanced damages under Section 284, as Congress intended, to “discourage infringement of a patent by anyone thinking that all he would be required to pay if he loses the suit would be a royalty.” S. REP. NO. 79-1503, at 2 (1946).
Agree in full.
Thanks Anon!
The unfortunate aspect of the Chien’s essay is her suggestion that this really may be “the best way to deal with a patent demand.”
Depending upon who is sending (and receiving) the letter, “Do Nothing” may be the best strategy.
If you are a small business (with little revenues or profits), it simply isn’t worth it for a patent owner to go after you. Nobody is going to spend $1,000,000 to get a $20K judgment. This is also true if it is a “patent troll” that is sending the demand letter. The patent troll business model (i.e., sending hundreds/thousands of demand letters in the hope of getting many small settlements) cannot handle many expenses and filing a law suit constitutes an unwanted expense.
Those entities are apparently serious and are ready and willing to use the court system to achieve their goals
So they (the trolls) want you (the company) to believe. Again, unless your company has serious revenues/profits that can be tied to the alleged patented product/service, ignoring the demand letter may be the best course of action.
Things are different if the demand letter is from a competitor or you are a company with serious revenues.
Of course, this doesn’t even take into account that there is a cloud over 50%(?) of all patents (i.e., those that involve computers) and the PTAB is more than willing to shoot down any patents that come their way. These days, with the uncertainty over the validity of any issued patent, it is extremely difficult for any small entity to obtain funding to enforce their patents. Unless you are one of the big boys (e.g., Samsung and Apple), enforcing your patent (no matter how valid) is nigh impossible. Patents are tools for the rich these days — just as the rich intended.
Professor Chien’s suggested best practice approach moves us further away from any respect for patent rights and toward a more extreme system of litigation enforcement
Welcome to the world of “efficient infringement.” Frankly, I’m surprised you didn’t see this coming. The lack of respect for patent rights have been pervasive through the Courts, the USPTO, and Congress for years now. There have been those that have been beating the drum for “lack of respect for patent rights” in the comments section of this website for many years now. The chickens have come home to roost — get used to it.
Why 112, even Samsung and Apple are having a hard time proving damages and getting injunctions. The patent systems is all but KO’ed.
At least Apple and Samsung can afford to play the sport of kings.
Everyone saw this coming. It is, after all, the primary intent of patent reform: to make patent enforcement available to well-funded entities, and out of reach of everyone else.
Non-practicing entities? Nope, that’s just the sales pitch. Notice that the AIA and patent reform draw no distinctions about how a patent is being used. Aspects such as “real party in interest” are just window dressing with no real impact.
I had supposed that it was ever thus: that the recipient of a demand letter first assesses whether the demander has the financial wherewithal and, if not, then chooses deliberately to refrain from replying, following instead the age-old instinct, to “wait and see”.
But this rational, proportionate and carefully considered response is not at all the same as doing “nothing”, is it?
Indeed, and in reality, if someone (who is not a direct and fierce competitor) sends you a demand letter, you are really in no worse a position once you receive notice of a suit being filed (except that that suit is probably in some far off District). You still have a month or so of negotiation of settlement before your response to the complaint is due, and in that you will access the claims and the validity, you can even start pre-responding once you get a letter by making a list of things you would include in a response.
Its probably smart to assume that someone sending out demand letters prefers (typically rationally) settlement over final judgment after a multi-million dollar suit.
Plus the additional procedures of IPR or Ex Parte reexam that you can posture with. The pressure on the defendant to settle in a patent case isn’t, typically, until over a year+ into the trial when it actually starts to look like the patent is going to maintain its status as valid and the claims are being construed to cover the defendant’s product.
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