A recent Wall Street Journal article discussed the recent multi-year increase in patent infringement lawsuits and corporate risk. Although this trend is most prevalent in the high-technology sector, economic and strategic realities are forcing corporate and outside counsel to find new methods to control the time and expense allocated to patent risk management.
Learn how one high technology company gained control over patent assertions and forged new case management processes by deploying an early case assessment process.
First, following are some insights into the current state of affairs.
In the WSJ article “Tech Firms Intensify Patent Spats” Dan Clark and Shayndi Raice discuss the 2.5k + patent cases filed in the U.S. federal court system annually – with more detailed discussions of the mobile device, wireless and software industries. With increasingly rapid product cycles (often building upon improvements to older technologies) and the introduction of new standards – it is perhaps inevitable that some patent gamesmanship will arise.
Adding to this froth is the increasing level of cash on corporate balance sheets – this makes certain firms, such as Apple, Google, etc. richer targets for non-practicing entities seeking to earn a return from patent assets purchased from others. Many of these NPE’s are built upon hedge fund, and some institutional investments, seeking increased returns over the stagnant traditional markets.
Ironically, the very cash accumulation that makes many technology firms defensive targets also provides budgetary freedom to institute patent litigation offensively; particularly if a strategic advantage appears within reach.
With substantial sums invested in patent litigation and those amounts increasing quickly, the need to deploy a cost-effective litigation response business process into your legal department will not go away.
Best Practices
Here is one best practice IPVision designed with a leading technology firm facing dozens of patent infringement lawsuits:
Monitor court dockets for new complaints
Provide an early case assessment report within 48-72 hours (a sample of IPVision’s early case assessment is available here). The early case assessment includes three categories of critical information:
- Demographic details
- Patent assessments
- Checks for common defenses and common plaintiff errors
Demographic details include a review of the attorneys and plaintiff’s litigation history, financial backing (where available), and a review of related disputes (for example, ITC filings) and the patent prosecution history and patent file wrapper.
Patent assessments leverage IPVision’s patent analytics and expert systems approach to quickly and accurately provide insights into the patents in the case, the broader patent family and plaintiff patent portfolio, inventors, and an initial patent landscape analysis. IPVision further extends this component of the case assessment process to include delivery of patent family maps and patent claims analysis reviewing claims for their relative scope and for language and construction pursuant to relevant case law. Finally, IPVision incorporates an initial prior art search to help guide technical review and develop an understanding of potential patent invalidity defenses.
In the third section, common defenses and plaintiff errors, we work with the client to review common defenses that may assist in case resolution – examples include consistency of inventor listings in the family/portfolio, chain of title deficiencies, improper back citation, government interests, etc.
Previously, this information was gathered over the course of several weeks (generally 4-5) and at a cost of around $100,000 per case. More importantly, critical time was lost in developing litigation response, defense and potential counter claims and the legal and business team did not have an early understanding of an appropriate level of resources to apply to the dispute.
The early case assessment process produces real economic savings with such assessments costing far less than $25,000-$35,000 per case - a 65-75% savings! Buttressed with new insights and control in the early days, litigation strategy and corporate communications have also remarkably improved.
Note: For additional insights on this topic and a game theory approach to managing patent risk, see the IPVisions blog post Patent Risk Management and Controlling Patent Litigation Costs.
