Monday, February 22, 2010

INTELLECTUAL PROPERTY 6

This is the sixth and last in a multi-part blog on the topic of INTELLECTUAL PROPERTY in the sciences.

"Most people are other people. Their thoughts are someone else's opinions, their lives a mimicry, their passions a quotation."

- Oscar Wilde

In earlier blogs, we covered uses of the patent system that had dubious societal value, specifically:

1. Patenting to suppress innovation.
2. Patent farming.
3. Patent spreading.
4. Patent holding.
5. Patent shifting.
6. Remixing prior patents.
7. Patenting the uses of unpatented inventions.
8. Patenting the obvious and the previous.
9. Patenting life.
10. Viral patenting.
11. Royalty stacking.
12. Reaching through a patent.

The government awards patents, but when someone infringes on a patent, the government takes no action. Only the patent holder is harmed, and only the patent holder can litigate against the infringing party. For this reason, a patent is sometimes referred to as the right to sue. Paradoxically, the typical patent holder is terribly frightened of lawsuits and will do almost anything to avoid a court appearance. Why?

I am not a lawyer, and the following paragraphs should not be construed as competent legal advice. They are included here to indicate that some patents, software patents in particular, sit on shaky ground, and that they are often vulnerable to declaratory judgments.

Imagine that you hold a software patent, and you have identified a person whose software contains some code that seems to infringe on one or more of the claims contained in your patent. Your lawyer sends this person a letter claiming infringement and demanding that the person either stop using the patented property or begin paying an assigned royalty. This is the so-called "demand letter" that every software programmer fears.

The alleged infringer, if smart, will seek remedy in a federal court, arguing that your patent is invalid or unenforceable, or that he did not infringe. He will ask for a declaratory judgment to stop you from pursuing your patent demands.

The declaratory judgment is a preventive adjudication. Its purpose is to clear the air, so that the person who received the demand letter need not labor under the constant fear of an impending lawsuit filed by the patent holder (1). Your alleged infringer will bring his case to a federal court venue, near where he lives (you and will need to travel to the location), giving him the home court advantage. If he asks for a declaratory judgment based on non-infringement, you will be required to pursue a counterclaim of infringement; an action that you may not be prepared to pursue. In the case of software patents, virtually every patent holder stands on very weak ground. All software is derivative of someone else's work; hence, every software patent is vulnerable to a declaratory judgment. You may have spent millions of dollars developing your invention and seeking your patent, but all of your investment could be lost through a declaratory judgment.

Declaratory judgment cases must be triggered by a significant controversy, usually a threat of litigation. Your demand letter, indicating infringement and requiring compensation, is often sufficient to trigger a claim for declaratory judgment. This means that, if you have a vulnerable patent, you must NOT send a demand letter that has the effect of a threat.

You may try having a salesman send the letter (not a lawyer). A letter from a salesman is less likely to imply the threat of legal action than a letter from retained counsel. In the letter, you might want to simply identify the patent and indicate that it was available for licensing. It may be wise not to suggest that infringement has occurred.

The purpose of a "demand" letter is to motivate the receiver to buy a license, without triggering a declaratory judgment action. If the letter is sufficiently bland and non-threatening, it may do the trick. Remember, though, that the receiver will likely interpret your letter as a thinly veiled threat. When determining jurisdiction for a declaratory judgment, courts look at all the relevant circumstances. If you have a history of vigorously pursuing patent claims, or you have a history of intimidating people with the implied threat of legal action, a court may interpret any letter from you, no matter how bland, as an intent to litigate.

What is the moral of this multi-part blog on INTELLECTUAL PROPERTY? The patent system does not always work to the benefit of the patent holder, or of society. Scientists who develop basic algorithms, or implementations of existing patents, or whose works do not qualify as inventions or devices, or whose discovery was a creation of nature, or a finding of vital importance to the health of others, should think very deeply before seeking patent protection for their works.

[1] Uniform Declaratory Judgments Act. National Conference of Commissioners on Uniform State Laws. August 2 - 8, 1922.

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© 2010 Jules Berman

key words: history of science , specified life blog , Jules J Berman PhD, MD