Friday, April 18, 2014

Startups Face Obstacles Protecting Innovation with US Patents

I was visiting Professor Hricik's blog tonight, and noticed his post with a link to an IP Today article by Joseph Hosteny on prosecution bars. Prosecution bars prevent prosecuting attorneys from viewing confidential information that is discovered during litigation that could be used to guide the strategy for patent prosecution of pending applications. When I arrived at IP Today it required a login, etc. I decided to sidestep all of that by visiting the Niro, Scavone, Haller & Niro's web site where Mr. Hosteny works to see if I could download the prosecution bar article and noticed he has his own website with publications. Although it didn't include the prosecution bar article, the articles were interesting.

Tonight, I mention one of them because it may cause some to think differently about how Congress is striking the balance in favor incumbents over startups with respect to patents. Lobbyists have Congress' attention on patent trolls, but startups interests tend to be ignored. This may be because they cannot afford lobbyists and must focus on innovation rather than changing laws. At the same time, the innovation needs legal protection from larger entities that can take it. Congress needs to give startups favorable patent laws to help them grow and if they deserve it, become incumbents. If we reform patent law in ways that generates obstacles for startups protecting their patentable innovation, we produce a world where only incumbents win.

In The Long Walk From the Gobi Desert to the River Styx Mr. Hosteny paints a stark detailed picture of the obstacles inventors face in profiting from patents. Although Mr. Hosteny talks about inventors, I think the ideas can be extended to startups which are built on inventions. He notes they have a long march to succeed. They have to invent something valuable, hire a patent attorney to prepare and file patent applications timely, build prototypes (let's assume real inventions), convince the examiner of the merits, then persuade skeptical companies to license the patent, and at times enforce the patent against companies with much more resources. Unfortunately, defendants' attorneys often treat inventors worse than robbers or embezzlers during enforcement. Don't expect to see it in court -- the judge is watching, but you do see it in depositions, where inventor's character is too often called into question. And the battle to enforce patents can stretch over years as it goes back and forth between the district court and the Federal Circuit on various issues. Definitely worth reading as it may help some realize that the playing field is not at all level for small companies and inventors that seek to license and enforce their patents.

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