Monthly Archives: August 2012

The Apple vs. Samsung Verdict Actually Demonstrates that Patents Do Promote Product Innovation

Apple’s win over Samsung actually demonstrates a functioning aspect of our dysfunctional patent system.

In the time that the Apple vs. Samsung patent fight has been underway, we have been inundated with an untold number of articles on how Apple is stifling innovation in the SmartPhone world.  (Haven’t seen these:  just do a Google search for “Apple stif . . .” you don’t have to type any more than this–the search auto-completes itself.)

I often take a contrarian view from that stated by most “expert” commentators–be they members of the press or actual patent professionals, and the Apple v. Samsung verdict is no exception:  I think the result actually demonstrates that the patent system is working just fine in this instance, thank you very much.  But how can this be when Samsung got hit with more than a BILLION US DOLLAR jury verdict last week?!?  Doesn’t the fact that Samsung could not make a product without infringing Apple’s multitude of patents mean that Samsung is effectively prevented from competing with Apple in the Smartphone market?

Not necessarily, as is shown by this great post from The Verge entitled:  “How Android has evolved while steering clear of Apple’s designs”.  What is most interesting to me about this article is how we see that while making phones for Google, Samsung was nonetheless capable of creating non-infringing and–yes–innovative designs.  The illustrated “evolution” of Google’s Nexus branded products demonstrates to an IP Strategist like myself that Google’s team understood clearly the scope and content of Apple’s patents BEFORE they began the process of designing their products.  Their innovation and patent teams apparently worked together to define the available design path available to them and that which was closed off due to Apple’s (and presumably others’). This resulted in their bringing to market products that (at least for now) avoid Apple’s pre-existing patent rights.* Continue reading

Google Changes the Game Again–This Time for Patent Owners and Those Who Serve Them

Patrick Anderson of the great Gametime IP blog reported the details of Google’s new prior art searching tool*.   This is such important news, I thought it important to repeat it in a separate post.  Patrick provides detailed instructions for how to use the Google patent searching tool, and I will not repeat that information here.  This post provides commentary on why I think this is a very good development for the patent world.   Google’s original announcement on its blog is here.  It does not appear coincidental that Google is upgrading its patent searching capabilities:  in this press release from June 2010 we are informed of the partnership between Google and the USPTO to increase the amount of US patent information available to the public.

When used correctly, Google’s tool can help “democratize” the patent analysis process by putting more power in the hands of those who are not part of the closed “guild” of patent professionals.  For example, before spending money on a search (and the opinion that most patent professionals will insist on writing to put context to the search), an inventor can herself get a feel for not just the patentability of her invention, but also how broad the claims will likely be and how easy or difficult (e.g, expensive) it might be to obtain a patent given the amount of prior art cited by Google.

Of course, the inventor can ask the patent attorney these same questions, but asking someone who makes her living writing patents if it makes sense to file a patent application is a bit like “the fox guarding the henhouse,”  n’est-ce pas?  I liken this new Google tool to a home improvement show on HGTV–I am never going to build an addition to my house on my own, but having access to professional-grade advice certainly allows me to ask better questions to my contractor and, perhaps, possess a stronger BS detector than I would have without being able to first conduct some self-learning to ground my go-forward actions in the face of “expert” opinion.

While Google ostensibly created this tool to help find prior art (e.g., to invalidate actual or potential patent claims), Patrick correctly notes that this product can also be used to help identify those who might be playing in the same space that is covered by another’s patent.   The new Google patent search can provide the owner of an existing patent with insight as to whether another person or company might be building on technology that first appeared in her patent.   This could illuminate whether potential licensees and/or infringers exist, an inquiry which to date has typically been one big question mark except for circumstances of obvious marketplace infringement or for entities with sufficient resources to pay a team of patent professionals to conduct the requisite investigation.

A word of caution, however.  As detailed in this blog post from 2008, analysis of patent claims is not a trivial process.  Before any patent owner acts on a belief that another party is infringing on her patent, it is imperative that an experienced patent lawyer be contacted so as to ensure that one does not end up in a declaratory judgment lawsuit as a defendant.  Google’s tool can thus serve only as a signal of potential infringing activity, but I have no doubt that this new product will serve as yet another disruption to the patent profession.  And, that is a good thing.

*  Yes, Google has had a patent searching tool for sometime, however, I have found it fairly difficult to use–perhaps because it was built without reference to the parts and content of patents.  When clients came to me with patent search results from Google, it was ALWAYS the case that a search of “real” patent databases turned up wholly different results.  With the emphasis now on patent claims–and the ongoing partnership with the USPTO referenced above, I strongly expect the quality of Google’s patent search to now be improved.  The addition of European in a search with US patents will also be a plus (however, I have always liked the search quality of the European Patent Office’s tool for searching ex-US documents).

Patents–Who Needs Them? Not Most Startup Entrepreneurs.

A recent article in TechCrunch indicates that entrepreneurs are less likely to file patents than in the past.   Nonetheless, there remain countless patent lawyers and agents who will argue convincingly that an entrepreneur must obtain a patent in order to succeed and who will take their $5-15K to file a darned good patent application that won’t provide them a bit of business value in the long run. Even worse, the resources expended in the patent process robs the entrepreneur of needed cash that will allow them to gain customers, and of their most valuable asset: time.  But when the only tool you have is a hammer, everything looks like a nail–which is why those still in the business of writing patent applications will continue to make their case to entrepreneurs (and investors) who lack the domain expertise to know better.

Now that I no longer make money obtaining patents–instead, I am the CEO of a startup battery charging company–I understand that patents are generally a poor way for a startup company to expend scarce resources.  I rarely, if ever, recommend that my startup colleagues file for patent protection for any tech/web-based ventures.

Further, when asked what they should do with their pending patent application, my regular advice is to let it die.  Why? Darned near all successful startup companies change their business model not just once, but multiple times prior to achieving success–that is, by the time they find paying customers.  As a result, by the time the Patent Office reviews the invention, the patent application filed 18 or more months ago is rarely relevant to the way their business is being conducted today.  In other words, their initial business idea may be patentable, but it didn’t surround a business model that anyone cared about after customer discovery efforts were conducted.

For those very few startup companies that hit on a valid business model out of the gate, success will breed copycats.  The patent filing gives a road map that likely will be designed around or with the steps performed outside of territorial boundaries so as to avoid infringement liability.  The successful startup has thus provided its competitor with a lower cost way to enter the market that it created.

Even if there is ultimately infringement liability that can be pursued, time and again good startup businesses are made lame by getting tied up in patent litigation.  I think that Vonage is a great example of this:  consumer adoption of VOIP  was retarded due to the focus of Vonage’s management on being a defendant in multiple patent litigations.   Only when Vonage settled litigation did it have the ability to focus on gaining customers instead of burning cash on legal fees and settlement costs.   No reasonable startup should base business success on the ability to prevail against a competitor after spending millions on litigation–especially when adding the opportunity costs and market uncertainty that results from such a business strategy.

This is not to say that SOME startups–such as those in the business of making tangible things that can be cleanly and broadly described (e.g. semi-conductors, chemical compositions and my own startup)–do not crucially need patents, but certainly we are in the minority since most new companies today are based upon developing new business models, not in making products or technology that goes into products.

When startup entrepreneurs come to me for advice about whether they should get a patent, I make sure they understand how having a patent would benefit them in the long run, and usually the consensus is that it will not.  For those who are concerned that an investor might want to understand their patent strategy, I let them know that not getting a patent is a patent strategy if you make the decision for clearly articulated business reasons.  In other words, a patent is only one of the many tools available to the entrepreneur who is seeking to build a sustainable and valuable business model.

Historically, patents have operated as a “black box” for everyone other than patent professionals.  If a patent attorney says “you need a patent,” then the entrepreneur had no way to stress test that recommendation against her peers.  As more articles like this one in TechCrunch reach entrepreneurs, I am hopeful that more startup folks will be able to decide for themselves whether patent protection makes sense in the long run.