After reading the article about Mr. Harman, I ran a quick analysis of his patents. In a brief examination of the patent rights associated with Mr. Harman’s technology, I found that he has successfully obtained broad patent claims that appear to cover the fundamental and basic aspects of this revolutionary technology. As such, it would not be surprising to find that the patent rights issued to date and pending today could effectively prevent others from practicing this technology until the expiration of Mr. Harman’s patents. In short, today Mr. Harman, his company and his investors likely effectively own the patent rights to this pioneering technology and they can control who can and cannot use this technology. Given the apparently broad scope of these patent rights, I would bet that Mr. Harman and his investors are expecting to obtain a hugely rich payback for licenses directed to the existing patent rights.
But, are Mr. Harman and his investors sitting in the proverbial “cat bird seat”, and should they be preparing to print money based on their broad patent rights in Mr. Harman’s technology? Don’t bet on it. Indeed, it is quite likely that other inventors, particularly those at large companies who do not want to be shut out of this revolutionary technology, are preparing patent filings that are calculated to limit the scope of Mr. Harman’s patent rights. Put simply, smart people are today are working diligently toward blocking Mr. Harman from practicing his own revolutionary technology. How can this be? A simple example is useful to illustrate the concept of blocking patents.
Say that Big PharmCo owns patents to a pioneering drug that will prevent hair loss. However, in its inventive activities, Big PharmCo has focused all of its efforts on the development and testing of the active ingredient of the drug, and little, if any, development on manufacturing a formulation that will allow the drug to be delivered to a patient in an effective manner. Seeing that Big PharmCo has not obtained patent protection on a method of actually making a formulation containing the drug, Drug Inc. then performs preliminary testing to determine the most effective method to make a formulation containing the hair loss drug. Drug Inc. can then file for a patent claiming the formulation. If this formulation is the most effective and/or most industrially suitable for the delivery of the drug to the user, Big PharmCo can be stopped from selling its drug to the public because it cannot put its drug into a formulation without obtaining a license to the formulation from Drug Inc. Of course, Drug Inc. cannot make the formulation either because Big PharmCo has the patent on the hair loss drug. But this strategy has allowed Drug Inc. to thwart the business plans of Big PharmCo, and the latter’s payback from its investment in the hair loss drug has been essentially derailed by the former’s strategic patenting efforts. This is the essence of a blocking patent strategy.