Tuesday, May 23, 2006

 

Patent Business Primer - Openings Available


You may think the purpose of a patent is to protect your exclusive right to do something. Au contraire. The real purpose is to prevent someone else from doing something. A patent is an important exception to the Hobbs Act, which defines "extortion" as "the obtaining of property from another, with his consent, ... under color of official right". For example, suppose you could threaten to shut down the Blackberry wireless email service. How much do you think Research In Motion would pay you to stay in business? A million? Half a billion? More? Did you guess $612,500,000? OK, now guess how long it would take you to make that much providing the service yourself. Long time, huh? OK, you get one more guess. What would it be worth if you could do the same thing to a bunch of other companies? Today you learn how.

There are actually two similar, but distinct, businesses built around this application of the patent law. While these could be considered "mechanisms" or "business methods" that under current patent office practice could themselves be patented, no one thought of that before I applied for such a patent, just before this posting. So don't get any ideas.

The first method is to discover something about a natural function, such as a gene or cell and how it works, and then patent it to prevent further investigation into the process. The current patent office will even give you a patent on parts of the human body, such as a stretch of chromosome. There does have to be something previously unknown about it. You can't patent a finger or toe, for example the finger known as the "bird". It is already in common use, and besides, it would be impracticable. If you tried to enforce it you can imagine the reaction.

But if you are a drug company, you find out new stuff all the time. If you just patent a particular drug, some other guy might create a different drug that does the same thing, maybe even better or, heaven forbid, cheaper. But if you patent the WAY your drug does something, like preventing a virus from attaching to a cell, you can kill off any further research that border on that, and hopefully prevent any further "cures". If the disease is killing or maiming a lot of people you can imagine what you can charge for your pill.

The problem with this first business method is that you actually have to discover something, which takes time and effort. Therefore it is not what you are looking for. The second method overcomes this problem. Not only that, but it can be done by non-scientists, lawyers for instance. First, you choose some company with a technology or method that is crucial to their business. Then you search the records for some previously issued patent that looks close enough to what they are using. "Close enough" means that you think you might be able to convince a jury of it, or, better yet, convince the company you can convince a jury of it. Then buy the patent and send your infringement letter. Note that you can do it the other way around, buy a patent and look for a company doing something similar, but it is not recommended. Suppose you find one that doesn't have any money?

This is easier than you might think. First, there is no such thing as a totally new idea, as everything builds on what has gone before. As Sir Isaac ("Zack")said “If I have seen further than others, it is because I have stood on the shoulders of giants." Second, while patents are suitable for framing, usually not much comes of them. There is a lot of risk, cost, and work creating a new business around a patent, and most inventers are not business types.

It is also easier than you might think to convince a jury your way. Remember, 70% think creationism is a science, and maybe a quarter believe dinosaurs cohabited the earth with man, but reject the idea that man and the chimpanzee may have evolved from a common ancestor. Note: that is the general population. If you work at the jury selection, you should be able to improve those percentages, and you won’t have to spend as much time selecting your stalking patent.

One final note. The patent office issues a ton of patents and feels that there is really no reason to worry about validity if nothing is ever going to come of them. Their idea is that on the few where validity becomes an issue, they can check it out then. This is why so many are later nullified. But in this business, you don't have to worry about the patent office declaring your patent invalid. Patent review is slow, and if you can get your jury to rule it valid, it doesn't mater what the patent office says. The judge will take the opinion of the jury over that of the patent office any day. You saw that in the Blackberry case.

Companies in this exciting field are called Patent Holding Companies. If you are not a lawyer and would like to get into this business, there are contingent fee patent trial lawyers that will assist you in your noble venture. One blog says it this way: Those trying patent lawsuits on behalf of individuals, small companies and holding companies should expect to be attacked on the grounds that they are "pirates," that they "don't make a product," that they are "suing for money" and that their motives are somehow sinister. The fact is these attacks are unfair and, at their core, fundamentally unsound. If it's your privilege to represent a small patent owner in the face of such arguments, don't be apologetic and don't be afraid to attack these arguments head on. Most jurors understand. Enforcing patents is a noble endeavor. Doing so on behalf of those facing formidable opposition is nobler still.

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