Thursday, June 8, 2017

Even with patents, the past can be prologue

      One might characterize the patent market of the past several years as a herd of elephants fighting over the last leaves on a tree.  This might be somewhat crude to many but a scan of the landscape of Fortune-100 corporations spending millions litigating accusations of infringement or suing for infringement makes a case.  Or, the flooding of the PTAB with requests for IPR (inter partes review procedure) to determine patent validity also makes a case.  Turmoil and conflict are the (dis) order of the day among the patent fortresses.  Unfortunately, the considerable ripple effect created reaches to the startup company attempting to file its first application.
     “Nothing is more powerful than an idea whose time has come”, said Victor Hugo roughly the same time as the sewing machine patent wars of the 1850s were raging.  The pre-Civil War sewing machine was a disruptive technology comparable today to smart phones, driverless cars and retail sales on the Internet.  There were numerous inventors of the machine and devices that improved it all with patents.  You know what happened- each machine sold infringed on a number of patents.  Elias Howe didn’t make sewing machines.  He licensed his patent on the lockstitch to sewing machine manufacturers.
     There were suits and countersuits by the score matching the complexity for their time as the suits of today.  They were heard by judges and juries largely unschooled in the technology.  Relative peace and calm came in 1856 when the patent owners created the first patent pool.  Fast forward to today, Article by TechCrunch.  Patent pools handle basic building block and Standards patents for a selected product. The reference here is to the data transmission protocols for transmitting high density digital audio content that makes up the Advances Audio Coding (AAC) patent pool administered by Via Licensing Corp of San Francisco.  Dolby, AT&T, Philips, Microsoft, NEC, Panasonic are among those participating.
     This is compensation (revenue) beats litigation (legal and court costs).  Net savings can be substantial.  The patent wars are different today – smart phones, batteries, DNA twiddling, drug targeting. History repeats itself… Sort of.

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