For both startups and well-established businesses, intellectual property is a core asset that drives both innovation and brand development. As a result, it is crucial to preemptively protective one’s resources from potential challenges by outside firms whose sole business practice is instigating litigation against operating companies.
These “patent trolls” seek to buy up intellectual property through a variety of means – from buying assets of liquidating companies to working with smaller firms with niche patents – in order to seek damage claims in court. Without broad reform of the nation’s intellectual property regulations, these companies have successfully issued legal challenges against major companies ranging such as Blackberry (see BBC News), despite having no operating businesses outside of patent holdings.
Many companies face growing IP challenges from these companies as a result of friendly District Courts, as well as contingency fee structures for challenging attorneys, which limits the downside risk of filings. In order to protect your business from patent trolls and future defensive litigation, there are several steps you can take:
• Actively monitor patent filings to see if they apply to your business
There are a number of prominent services which provide businesses with an update list of patents that could potentially be applicable to a particular field of operations. Generally released on a quarterly basis, by reviewing these new filings for potential risk factors, companies can stay ahead of the curve by ensuring that its products are on solid legal footing. In particular, companies can generate ideas which will allow them to apply for more direct patents, modify existing designs to ensure full compliance with IP law or to preemptively negotiate a license from a company.
• Invest in patent infringement insurance to hedge your risk
Specialty corporate insurers offer risk-adjusted premiums to protect a company’s major products against patent infringement challenges. Although premiums are generally high, as there is no standard, accepted actuarial structure and a limited market at this point, companies can protect themselves against excessive legal costs that can emerge from challenging intellectual property lawsuits. Although the offerings are limited, it’s best to review premiums and coverage from a number of specialty insurers before deciding on an investment in patent insurance.
• Work with an intellectual property law firm to preemptively build a case for your major patents
If a company’s flagship product appears to be particularly vulnerable to 3rd party legal challenges, it may be beneficial to build up a legal case for the uniqueness of the product design and function in advance of any potential filing – this will ensure that a company’s operations can continue in earnest by directly challenging any potential lawsuits in court (as Blackberry did in advance of its settlement). This case can form the basis for a potential out of court, early settlement, a design around process that circumvents the filing through modifying the existing product or an opposition proceeding, where companies can challenge the validity of a contested patent.
• Join an industry protection group, such as the Allied Security Trust
A number of collaborative, industry groups have emerged to provide shared litigation support and intellectual property rights across companies. By joining an IP protection group, a company can pool resources to protect its IP assets.
Today’s article was submitted by Guest Barista Maya Richard, who writes about high speed internet.