Professor Chien initially points out that patent infringement lawsuits are disruptive, unpredictable, and expensive. Professor Chien also notes that patent litigation is practically uninsurable and companies are driven to rapidly purchase large patent portfolios to have a defense against other company's patents, which, of course, is no help to ward off patent assertion entities, which we affectionately refer to as patent trolls.
Information technology (IT) companies in Silicon Valley have a patent clearance problem. The large scale purchases of mobile phone patents has only exacerbated the problem. RPX asserts 250,000 US patents relate to smartphones today. Even if that estimate is off by a factor of ten, that is still 25,000 patents to review and assess whether they pose an obstacle. Who has the time and money for such a review? Professor Lemley states people's response is to ignore patents (See Professor Lemley's Ignoring Patents) .... until the patent owner's letter arrives. Yet, since only 1% of issued patents are ever litigated awaiting that arrival doesn't appear irrational to all that many companies.
Nonetheless, Professor Chien states uncertainty about what patent is likely to be asserted can be reduced by identifying the riskiest patents. And litigated patents have markedly different characteristics than non-litigated patents that can be readily observed before a lawsuit is filed.
Litigated patents have more:
Litigated patents have more:
- Claims
- Backward citations (applicants submit large IDSs to "bullet proof" the patent)
- Foreign counterpart (a signal of the owner's estimate of value of the invention)
- Patent family members (e.g., continuations, divisionals, and CIP)
- Forward citations (examiner cites the patent in subsequent filed applications with different inventorship)
- Maintenance fees (another signal of owner's estimate of value)
The litigated patent owners are more
- A small entity
- Domestic based
- Owner by assignment of the patent
- The assignment involved a change in size (i.e., large entity to small entity)
- Patents were used as collateral
- Requested ex parte reexamination of the patent (If you are not getting the patent ready for litigation, why spend the money?)
I would emphasize the track record of the patent owner can trump many of these characteristics in predicting whether a given patent will be litigated.
Copyright © 2012 Robert Moll. All rights reserved.
