Patent Law

Why Litigate?

By Gary Odom and Jordan Kuhn

Patent litigation is tremendously expensive. And noisy. The ruckus has stirred quite a crowd: fat geezers with political heft to match are jostling to shuffle the seating arrangements in the patent spat ballroom. The stakes for infringers can stray to six to nine figures or more. Microsoft keeps a small army of patent litigators marching on the defense of 30 to 40 contemporaneous assertions. Though not as bad a barrage as Microsoft, quite a few large firms face regular patent battles. Why not take a more civilized path?

Once upon a time, patent notification was like Joan Rivers hosting: "can we talk?" A patent owner could write a pleasant missive informing, though not accusing, of possible infringement. Then the Supreme Court, in its MedImmune ruling, made litigation de rigor: a whiff of fear by a potential defendant became cause célèbre for a declaratory judgment motion. In short, the courts encouraged business.

But why not hang out a "can we talk?" sign?: public notice of declaratory judgment restraint pending investigation of assertion. In one scenario, an uninterested third party could vet an asserted patent for validity; assess infringement; study damages and reasonable royalty if merited. Patent arbitration of a sort. Sure would save buckets of money.

But only if the interested parties were willing to be reasonable. There's the rub. Inventors with "billionaire" on the brain aren't prime candidates for tuning into the reality channel to watch their shoddy patent get gunned down as an academic exercise. Steroid competitive corporate pit bulls aren't about to bend over and take a license, foregoing a fighting chance of evading a "patent tax."

However the worm turns, the worm belongs to the other guy. Well, at least until court-mandated claim construction, when the judge puts the Markman on the wall. Only about 3% of patent assertions face trial, but many make it to Markman. Only when clarity of conviction becomes crystalline does the motivation sway.

Simply put, reasonable rational calculation in the face of a patent being waved around just is not happening. It's an emotional jolt, and the jangling vibe is positively reptilian. There's just too much at stake; roll the dice.

Full post as published by The Patent Prospector on February 06, 2008 (boomark / email).