Feeds:
Posts
Comments

Archive for the ‘Patent Licensing’ Category

It took a few seconds to come up with this analogy, but after reading the “Wear a White Hat” article by Scott Gibson, I couldn’t stop thinking about how relevant the concept of black hat, white hat was not only to archetypes, hackers, and network security professionals, but also to patent practice professionals.

In the hacker / network security / cybercrime world, a black hat is a hacker who, among other things, penetrates networks and security systems and often wreaks havoc on the systems he has gained access to. Viruses can be installed, information can be exploited and/or manipulated, and general bad things can happen when a hacker penetrates your system.

On the other hand, there is also something called a white hat, which generally refers to an “ethical” hacker. Frequently, this is a programmer or a team of network security professionals who are hired by a company for the purpose of testing the company’s network for security holes, vulnerable entryways, and for weaknesses in the company’s network security system. While they may work with grey hats (best described as those who walk the fine line between violating laws and ethical hacking), these white hats help companies combat black hats who are intent in finding a security hole, penetrating a network, and exploiting the vulnerabilities inherent in that vulnerable network.

I see patents the same way. There are white hats who practice traditional patent practice whether on the side of patent prosecution, patent licensing, or patent litigation. These are the practitioners who write the patents and advance technology by sharing inventions with the public in return for a multi -year monopoly so that the inventor can benefit from their invention. The goal with white hat patent practitioners is that they are looking to help their inventors to find where the inventor’s understanding of the invention is lacking, and to help their inventors secure protection of their inventions by covering as many embodiments of the invention as possible to most completely and to most broadly describe the invention. This is similar to the white hat ethical hacker who finds security holes with the intent of writing a patch to fill those holes and to keep the network secure.

In licensing and in litigation, there are also white hat patent practitioners. These are the attorneys who help the inventor protect their inventions against companies who have knowingly or unknowingly taken the protected invention and have used the invention to make a product or a service which incorporates the protected subject matter of the patent. This white hat patent practitioner will often approach the company or individual using the protected invention of the inventor and will ask the company to properly compensate the inventor for the value of his/her contribution. If and when the company decides not to pay the inventor for the invention that is protected by law as belonging to him through his patent (whether their decision is in bad faith, e.g. denying the inventor compensation based on the company’s greed or whether their decision is based on a good-faith belief that the patent is invalid), the white hat patent practitioner (here a patent litigation attorney) will file suit to enforce the inventor’s patent rights. Throughout the proceedings, the white hat patent litigation attorney will develop evidence and will ethically move through the lawsuit proceedings so that the judge or jury will find that their client was wronged by the company who refused to take a license and pay the inventor his/her fair share of the value their invention contributed to the company’s profits, and in the end, if the inventor is in the right, the court will find for the inventor and will order the company or infringer to pay the damages rightly owed to the inventor.

Interestingly enough, just as there are white hat inventors and patent attorneys, there are also grey hat and black hat inventors and practitioners. Often known as patent trolls, these individual or companies will patent or acquire patents to inventions with the sole purpose of using them as a weapon to harm another company, whether it be to block them from making a product, or more frequently, to carve out a profit for themselves by asserting the newly acquired patent against the company. The stated purpose of patents are to promote and to reward innovation and to further the growth of technology; forcing a company to “pay up or else,” or to stop producing a product under threat of lawsuit blocks and hinders technology.

Black hat patent practitioners and black hat inventors usually fall into the category on non-practicing entities (NPE’s). These individuals generally see a patent as a commodity to be mined and exploited rather than an invention to further technology. You’ll often find black hat practitioners trying to reverse engineer and to invent around existing inventions for the sole purpose of suppressing the next step in the furtherance of technology, or to try to induce the real inventors and companies to “trip” (so to speak) over the patent and infringe it and then WHAM! the lawsuit and threats start pouring out. You’ll also find many venture capital companies acting in a black hat capacity by aggregating patents for the sole purpose of making a pretty penny by enforcing one or more patents against a target company with deep pockets who stand to lose the most by being confronted with one or more patents which may or arguably may cover the technology they are practicing.

Lastly, the distinction between a black hat patent litigator versus a white hat or grey hat litigator is how they conduct themselves in the preparation for and during trial. Black hat litigators will threaten, scream, intimidate, and will use scare tactics and legal maneuvers to intimidate the other side into settling with them WHETHER OR NOT they really are infringing the patents being asserted against them. Sometimes a party facing a lawsuit will settle giving money to a black hat litigator who has no leg to stand on just to save money on the expensive costs that will be incurred if they decide to fight the black hat litigation attorneys.

In the network security world, the job of the good guy belongs to the white hats who write security updates and patches to prevent the hacker black hats from causing damage through their illegal and often immoral activities. However, in the patent world, a white hat is often at a disadvantage when facing a black hat, and their only remedy is to endure the high costs of litigation and attempting to file a declaratory judgment and or summary judgment motion, or defending their client all the way through trial until a judgment is granted in their favor.

However, the real white hats in the patent world belong not to the patent attorneys and the patent litigators who ethically run their practice, but to the congressmen, the senators, and the lawmakers who are able to explore how black hat patent practitioners exploit and abuse the system, and they can pass laws to patch up the vulnerabilities in the law which allow black hats to do their damage. This can only happen through advice and letters from ordinary people like you and me who write them and share their thoughts, their feelings, and their experiences to best empower the real white hats to propose legislation changes to remedy vulnerabilities in the patent system as it is today.

Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, and Strategic Counseling.

Read Full Post »

It just occurred to me that social networking sites are about to become fewer in the coming months. There is an article in the Jewelry BlogStore Blog, “Facebook Huddles with Patent Vampire” referring to talks between Nathan Myhrvold from Intellectual Ventures, and Mark Zuckerberg, the founder of facebook.com. In the article, it shows the two icons talking.

Here is how I would think the conversation likely went:

Zuckerberg: “What do you think you can do for me by me selling you my patents for millions of bucks?”

Myhrvold: “How would you like to be the only social networking site in existence?”

Zuckerberg: “You can do that? How?”

Myhrvold: “Well, you know all those me-too social networking sites? Do you have any idea how many of them are infringing patents?”

Zuckerberg: “My patents don’t cover their activities. I’m not so sure it will work.”

Myhrvold: “Think a bit bigger, my friend. We’ve been buying patents on social networking for years, so much so that we can even put you out of business with our patents. We obviously wouldn’t of course, and we’re friends, and I’d like it to stay that way.”

Zuckerberg: [a bit nervous] “Uh huh…” *frown*

Myhrvold: “If you sell us your patents, we will give you a license to keep practicing your patent forever. Think of it as a royalty-free lifetime license. We — together — will bring the other social networks down to their knees, and we’ll share the profit 60/40.”

Zuckerberg: “I’m not so sure about this.”

Myhrvold: “You can’t lose. The patents speak for themselves. Plus, imagine what you’ll be allowed to do on your own facebook.com site because we’ll license you these patents which will allow you to expand your capabilities. You’ll have the #1 social networking site in the world!”

Zuckerberg: “What about the Twitter problem?”

Myhrvold: “We’re working on it. ;)”


Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, and Strategic Counseling.

Read Full Post »

Thinking about the possible future issues with regard to larger companies entering the “patent pooling” / patent enforcing business model, I believe a future issue might be the concept of “tying,” (a concept I learned about during my time in China) where a company is approached to take a license for patents relating to one or more of their products, and as a condition to accepting a license [in lieu of a threat to be sued for patent infringement], that company is forced to take licenses on patents that are only remotely relevant (or not relevant at all) to the subject matter in which their products cover. In other words, it seems to me that this could lead to an abuse of the patent system where companies would be forced to take licenses to practice patents they have no intention of practicing just to get the license that is forced upon them regarding the patent they are actually being accused of infringing. It obviously goes the other way too, namely, that companies seeking licenses for patents which they wish to practice might be forced to take licenses which they really don’t need just to get the license they are seeking. With companies having so much muscle these days, I see this as becoming a real threat that can cause some damage within the patent law system.

For example, see the articles, IEEE joins move to patent pools by Rick Merritt @ EE Times, and IEEE to get into the patent pool business? by Lawrence Ebert, to which I posted the comment below:

The prospect of another company (or organization) entering the “patent pooling” business is not unexpected. The patent pooling business model in my opinion is quite effective, profitable, and certainly poses more of a threat to infringing companies who would otherwise be hesitant to take a license where they were clearly infringing certain patents.

One topic I foresee as a future issue which I would enjoy reading in one of your future blogs is the idea of “tying” in regard to companies being coerced to take licenses to patents they don’t need and wouldn’t want. I would say that is a possible and realistic outcome of these big companies with litigation and licensing muscle entering the patent world.


Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, and Strategic Counseling.

Read Full Post »