John D. Smith (if that is his real name) is proprietor of the Don’t File A Patent website, noticed by Patent Hawk earlier this week. Hawk notes Smith’s arguments boil down essentially to four essential points, each of which has been touched on (at least in part) here at Gametime IP:
- Patents are expensive pieces of paper.
- Lawyers are money-sucking parasites.
- The Patent Office wastes money on meritless rejections.
- Lawsuits are expensive, and judgments are uncollectable.
As far as judgments being uncollectable, just go ask TiVo how much fun they’ve had chasing the $74 Million they “won” in Texas. With this evidence stacking up, it is easy to take a pessimistic view of the patent system in the United States. Patent Hawk asks the rest of us whether Smith simply has a “bad attitude” or if the truth hurts? The truth, of course, is seldom so easy. Smith does have a poor attitude when it comes to patents, but one that is easy to sympathize with. A patent system imposes burdens and benefits. We each have a responsibility to avoid misappropriating (without compensation in most cases) the technology
invented patented by others. In turn, we get the benefit of their full disclosures in the future, and the right to prevent others from misappropriating our own technology (should we choose to patent). A lot of confusion is created in the process, due in part to the fact that new innovations can (and often are) fueled by previous ones. The Wright Brother’s weren’t the first the theorize sustained flight, they just made small tweaks to previous attempts. Edison didn’t invent the idea of passing current through a coil of wire to create light, he just made the light bulb practical with a vacuum and a tightly coiled filament. Invention is more often incremental than groundbreaking, and incremental inventions are rewarded with patents because neither the inventors nor the patent office can know, in advance, which incremental advance will take the theoretical and make it a reality. (For a more detailed study on how incremental advancement led to a complex commercial product, see Professor Adam Mossoff’s post on The Incremental Invention of the Sewing Machine).
Also, the truth does hurt. According to Smith, 70-95% of applications are rejected by the patent office, a fact which is “not disclosed to inventors.” There are many things undisclosed to inventors, like the true cost of obtaining, maintaining and enforcing a patent, and what those that will help you will want in return.
Your patent attorney may have given you a break on the initial preparation feel, after you talked him down to $5000 from $7500. But he may not warn you that, as Smith notes, a rejection from the PTO is a near certainty. Responding to each one will likely run you $1500 (if you’re lucky) to around $3000. The PTO usually does this more than once, which means filing a request for continued examination (RCE) which requires a response ($1500-$3000) plus a $400 filing fee (for individuals). If repeated RCE’s don’t work, you may have to file an appeal. (You really don’t want to know). When you finally do win, you get to pay the PTO another fee ($755 for individuals) to get the PTO to actually issue you a patent. Then come the maintenance fees, but that’s another matter altogether.
It’s worth it, you tell yourself, because you can use it aggressively to prevent competition, right? Wrong. It’s a long story that I might someday tell, but suffice to say that while there once was a day when you would be entitled to a court order prohibiting your competitors from using your invention, that entitlement is gone. You might still get it, and you might not. (And your lawyer will tell you no different).
But you can win money, right? First, talk to TiVo. Second, the expenses of a trial can run in the millions of dollars, before the lawyers are even paid a dime. Someone has to be prepared to make that investment, and any lawyer worth his or her salt will need to know that investment is locked-in before even thinking about bringing a lawsuit for you. This brings me to the second point.
There are people that will help you. Someone might agree to buy your patent, and the rights to sue others along with it. They take that cost off your hands, and give you some cold hard cash. Like many assets, however, it’s worth less all at once than it is over time, so that cash offer may not be the payday you were dreaming of. Or maybe you have more patience than that, so you find someone who says they’ll agree to bankroll your lawsuit. Perfect! You now have the ability to get a quality lawyer to represent you, and the war chest to take a company to trial. Of course, what the investors will tell you now that everyone else neglected when you first pursued your patent is that the investor wants the lion’s share of proceeds from the lawsuit. The investor, after all, is out to make money, not to help you. You’ll find that you have very little negotiating leverage … the fact that you already have money invested into the patent is meaningless to the investor (who can just as easily buy artwork, antiques or commodities to make money), and if enforcing a patent were as easy as knocking on a door and accepting a check, you wouldn’t need a million dollar bankroll in the first place.
So, I will agree with John Smith … if you don’t intend to put up a sizable chunk of your own money to get solid patents on your inventions, with the knowledge that enforcing it will require you to share more than half what you collect with the people that help you collect it, then don’t file a patent in the first place. Without producing a gametime-ready patent, and putting resources behind it to actually enforce it, your patent is just a piece of paper. Getting it game ready will cost you, and there’s no way around that.