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IP, Patent

Patent Connections: A Patent Does Not Protect Your Products

I’ve taken to becoming quite frustrated lately with the propagation of the falsity that filing patents can protect your products. Either this statement is incredibly misleading, or patent attorneys have a different interpretation of “protection” than the rest of us. (Actually, there is a third possibility that we’ll get to later)  After all, if this inventor can understand the failure of patents to provide any real protection, then why do people bother to perpetuate this myth? The simple truth is that, if protection was their mission, patents have utterly failed because

infringers have very little respect for patents, or the institutions that exist to enforce them. Sure, every defendant in every patent litigation trial tells the jury, “We respect patents! We file hundreds of our own patents!” But when they lobby for patent reform, they switch stories, and instead tell congress that patents are “low quality” and cover “minor improvements.” Some even go so far as to say that they only acquire patents for defensive reasons.

Over at Patent Calls, I’ve posted my weekly column explaining, in more detail why patents don’t function to protect products.  A few excerpts:

After explaining how companies generally pay no attention to patents at all:

And even when companies (accidentally, I suppose) learn about specific patents, they generally won’t let that simple fact alter their production plans.  So, your next question might be what government agency can you alert about this patent infringement?  You’ve seen fast forwarded through many FBI warnings in the 80’s and 90’s on those clunky VHS tapes, so if copying a movie is a crime, then surely ripping off your invention must be too, right? Again, you’ve been paying attention, so you probably know better. Enforcing a patent is the owner’s responsibility alone.  There is no law enforcement agency to help you.  The only thing you can do is file a civil lawsuit (you know, those federal cases where people are all too quick to tell you it’s not about the money).
Of course, you already knew that. But even the civil suit doesn’t actually “protect” anything:
“A-ha!” you think. Assuming the last paragraph wasn’t news to you, then you know how that very expensive patent can help protect your product.  You can use the court system to order your competitor to stop making and selling your patented product, right? This means that you are the only one allowed to sell your product, and the patent serves as the basis to exclude all others.  Well, this is the moment where the other half of the half-truth is exposed.  There was a time, several years ago, when patents could (and often were) used for that purpose.  Granted, you had to prove a few important things (like ownership of the patent, the fact that the product is what you claimed in your patent). But once you had jumped those hurdles, the court was going to grant an injunction, unless it had some good reason not to.  Then, a few years ago, the Supreme Court decided that there was never any basis for the automatic injunction, and hit the proverbial “reset” button, wiping out decades worth of precedent. Since that time, injunctions have become significantly more difficult to obtain.
Oh, and the post-eBay solution of compulsory licensing ongoing royalties?
This is a bit of an oddity, as other areas of the law don’t operate the same way.  Suppose a man comes to your house every day, rings your door bell, and when you answer it, punches you in the face. If you take him to court, you will be awarded some money, but the man reveals that he is paid by someone else to do this. Therefore, he tells you that he intends to keep punching you in the face on a daily basis. Following the current patent remedies, the judge would then ask you how much money you want to be paid in exchange for being continually punched in the face. Ridiculous? Of course! No, the analogy isn’t perfect (no analogy is), but you see the point.
Lest you think I’m an eternal pessimist, there still exists the third possibility I mentioned above. So patents are inadequate tools for product protection, but they can be useful to protect your business. I’ll expand on the possibilities in a future post, but for now:
As an example, companies sometimes refer to obtaining patents for defensive reasons. Of course, this is a silly idea. Each patent is measured on its own merit, so the mere fact that you have a patent is no defense if you’re accused of infringing the patent of another.  (For example, a blocking patent may cover a necessary improvement that your patent doesn’t address, but is nevertheless present in your product). Thus, a patent is every bit as defensive as a sword, yet the language makes them sound as though they are a shield. 

A “defensive” patent portfolio can give a business leverage in a patent fight with a competitor by acting to set off potential damages. More commonly, the competitors make peace by granting cross-licenses to one another. Without patents of your own, you have little to offer in exchange for these situations (except money, see above). Even against a non-practice entity (NPE) whose only business is to license patents, you may be able to sell one of your patents as an investment for the NPE, reducing or eliminating your own licensing fee.
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Discussion

6 thoughts on “Patent Connections: A Patent Does Not Protect Your Products

  1. You give me an idea with what i am working on right now. Thanks for sharing this informative article.

    Posted by John Dale | January 13, 2011, 6:41 am

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