Saturday, March 3, 2007

Patent farming in medical standards

In a prior blog, I listed some of the IP issues involving medical standards. One of the biggest problems is the inclusion of patented methods within standards. Hidden patents within standards can be asserted against anyone who implements the standard.

Bruce Perens, an open source Guru, has written extensively on this problem. He uses the term "patent farming" to describe the act of planting the seed, a patented method, into the standard while the standard is being developed. Once the standard is approved and implemented by the user community, the patent farmer reaps his crop by asserting the hidden patent. Perens provides several specific examples where patent farming has benefited standards committee members to the detriment of the users of the standard.

You might think that it would be a simple matter to require the participants in a standards effort to disclose any of their owned patents that might be included in the standard. In the Rambus case described by Perens, such a disclosure agreement was in evidence, but the patent disclosure policy of the standards organization proved unenforceable in court.

Even if an SDO (Standards Development Organization) had an enforceable disclosure agreement with its members, it would seem that a committee member could sell strategic patents to a patent holding company, striking a deal with the holding company that would yield IP earnings on an asserted patent positioned within a standard. By working with a holding company, the original patent holder divests the patent and would not need to disclose the existence of the patent to the standards committee.

Patent holding companies (called patent trolls by their detractors) buy portfolios of patents to assert IP rights in strategically chosen business sectors. Recently, hospital-based technologies (including radiology imaging) have been the target of at least one major patent holding company.

In the next blog, I will discuss measures that SDOs may take to reduce their vulnerability to patent farmers. I will also discuss some defensive strategies that are often suggested but which really do not work.

This blog will also appear on Bruce Friedman's Labsoft

- Jules Berman
My book, Principles of Big Data: Preparing, Sharing, and Analyzing Complex Information was published in 2013 by Morgan Kaufmann.

I urge you to explore my book. Google books has prepared a generous preview of the book contents.

tags: big data, metadata, data preparation, data analytics, data repurposing, datamining, data mining, hidden patent, intellectual property, ip, medical standards, patent holding company, patent troll, specification, viral patent