For Inventor of 21 Patents, Patent Troll Litigation Not Very Lucrative

  Recently, I wrote a post on why I think that patent litigation is not a viable business model for inventors.  Given a realistic deconstruction of the costs and possible damage awards, I concluded that, in most situations, it is not realistic for an inventor to presume that she will “hit the jackpot” by suing infringers and extracting settlement or damage awards.  I obtained some pushback from this post, mostly from patent litigation lawyers, who contend that I am wrong in my view that patent litigation does not pay for inventors.  Of course, everyone is entitled to their opinion, and I respect the views of others, however, no one who objects to my (somewhat) negative view of patent litigation as a business model, has provided me with numbers to discount my economic analysis of patent litigation.  This recent post from The Prior Art blog entitled “Revealed! How Much Money a “Patent Troll” Makes” provides some insight into usually confidential inventor returns when dealing with a patent licensing program.  The underlying patents related to GPS technology and were asserted against several prominent technology companies.  The post gives a rare look into the numbers involved obtained in sending “patent licensing letters” to technology companies.  In Continue Reading →

The Coming Explosion of the Patent Monetization Market: Brought to You by Open Innovation and What Needs to Happen in Order to Speed Up the Process

This week, I got a call out of the blue from a very senior business development person at a Fortune 10 technology company “wanting to know more” about patent licensing and monetization.  This was a bit strange:  his company has literally dozens of patent professionals on staff, files 100′s of patents a year and, as I found out, has 35 or so business people working on patent  licensing and monetization efforts for the organization.  So, why would he (let’s call him “Bob”) need to talk to me these topics?  Certainly, there is a veritable army of highly-paid smart people to answer IP and patent questions at his beck and call, and I was interested in finding out what Bob sought to find out from me that he could not get from his own people. I was not surprised to find out that Bob did not want to learn more about buying and selling technology on behalf of his company.  Rather, Bob’s interest was personal:  he wanted to find out more about patent licensing and monetization because he believes that patent marketplaces are the wave of the future and he wants to participate in what he sees as wide-open business opportunity.  He couldn’t talk about his Continue Reading →

A Patent Reality Check: Litigation Not a Viable Revenue Source for Most Inventors

The ability of an intrepid inventor to strike it rich from a great idea seems to be embedded in the DNA of many Americans.  Perhaps this view emanates from the presence of patents in the US Constitution, which could create a feeling that US citizens have an “inalienable right” to use patent protection to their advantage.  Alternatively, people may perceive the occasional media reports of successful inventors and substantial patent litigation awards as a signal that patents can serve as a path to wealth for those with great ideas (certainly, this is the Hollywood view).  In truth, however, getting rich merely from a patent is a rare occurrence–maybe not as low a probability as winning the lottery, but the odds are incredibly long that any person can make money from a patented idea alone.  Think about it: if all it took was a patent to make someone wealthy, there would be a heck of a lot more rich people in this country given the huge numbers of patents that are granted by the US Patent Office every year. There are many reasons why the idea getting rich from patenting an idea is overstated, several of which I have discussed before on this Continue Reading →

Beware of Bogus Patent Analytics: Forward-Citation Analysis Leads to False Conclusions about Significance of Client’s Patent

Patent application filing and issuance data can be a useful tool to extract valuable competitive business information that is “hiding in plain sight.”  For example, in industries where patents are viewed as pertinent for creating and protecting long term value, patent filing data can present a strong signal about where your competitors are investing their time and money in innovation that may result in their future product or technology offerings.  In another example, such data analysis, also known as “patent analytics” or “patent landscaping,” can provide useful information about potential new markets for your company’s technology.  In this regard, for example, a chemical manufacturer can review how others are utilizing their products by reviewing patent filings.  For patent owners, analytics can reveal whether infringement may be occurring or whether it might have a higher value using forward citation analysis, which is a review of how many times a patent is cited in the later record of other patents. Various flavors of patent analytics are offered by any number of companies today.  As a corporate IP attorney, I purchased such products, which certainly do not come cheap.  In the last couple of years, I have also evaluated a number of these products to see whether they can provide value to my IP Strategy clients.  Continue Reading →

“It’s Not You It’s Them” or “They’re Just Not into You”: Why Being an Independent Inventor is Like Dating

The view that a good idea will result in a windfall for an independent inventor seems to be embedded in the fabric of US culture–perhaps it’s because the patent system dates from our earliest days.  Indeed, a surprisingly large number of people think that getting a patent will result in a large company paying them huge sums of money for the ability to introduce a product covered by that patent.  This belief serves to motivate countless numbers of inventors to spend $1000′s on patent protection, as well as years of hopeful waiting for their patent to exit the Patent Office.  Few ever see their product make it to the marketplace, however. As an attorney at a prestigious IP law firm, I really gave little thought to what my clients would do with their idea once I succeeded in obtaining a patent for them.   My job was to help my clients convince the Patent Office that their idea passed the legal requirements for patentability.  Indeed, my clients came to me for legal advice, not business advice, and they likely would have considered it to be inappropriate if I questioned their motives for wanting to get a patent in the first place.  However, after recently spending time Continue Reading →