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can patent holder be forced to license?
Posted by Anonymous . updated on 2/26/2009
Here's a presumably age-old question,
We're thinking of creating a product-service that is close to but does not seem to infringe, as far as I know, on an existing patent. However, to save ourselves future hassles, we're thinking of trying to license that patent anyway and reduce our profits, obviously. The current patent holder has assigned it to a company that is producing and selling a product-service that can be seen as in the same competitive area as ours would be.
There also is not any way to get into that area without that one patent. It is really really broad, bordering on the way-too-obvious to have been granted, but it was granted.
1. Can they choose to not license their patent, at any costs, or so unreasonable that it can't work for us, and effectively keep us out of that field, namely, are we Dead on Arrival?
2. Should we just go ahead and produce our product-service and wait until, and if, they sue us. They may not, after all, and try to settle then if they do?
3. Their patent seems quite broad and is likely to be challenged in court at some point, maybe even by us!. In fact, as it is, it could invalidate many products that simply send information over the Internet to a central server though it applies only to a specific industry where its use might be considered novel, with a stretch. Does that make any difference to the situation, namely don't worry about the patent and proceed and see what or if they do anything
4. By contacting them ahead of time, and risking their refusal to license to us, depending on your answer to 1 above, do we do more harm to ourselves? And do we open ourselves to stiffer penalties later if we proceed since now we've made it clear we are aware of at least that one patent we've been told we may infringe upon?
Answers (4)
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JimIvey
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Quote 1. Can they choose to not license their patent, at any costs, or so unreasonable that it can't work for us, and effectively keep us out of that field, namely, are we Dead on Arrival?
Yes, they can. Does that make you DOA? Don't know.
2. Should we just go ahead and produce our product-service and wait until, and if, they sue us. They may not, after all, and try to settle then if they do?
Don't know. That's a business decision based on the costs and benefits and how risk-adverse you are.
3. Their patent seems quite broad and is likely to be challenged in court at some point, maybe even by us!. In fact, as it is, it could invalidate many products that simply send information over the Internet to a central server though it applies only to a specific industry where its use might be considered novel, with a stretch. Does that make any difference to the situation, namely don't worry about the patent and proceed and see what or if they do anything
Before you do that, you should have a very sound and specific reason to believe their claim(s) is/are invalid. It's not enough to just think, "Hey, those claims are really broad ... they must be invalid." You must have a specific analysis of all the claim terms, prior art that teaches all those claim terms, and perhaps some motivation to combine prior art references if two or more are needed to show invalidity. "Pretty sure" is not good enough when showing invalidity of an adversary's patent claim(s).
4. By contacting them ahead of time, and risking their refusal to license to us, depending on your answer to 1 above, do we do more harm to ourselves? And do we open ourselves to stiffer penalties later if we proceed since now we've made it clear we are aware of at least that one patent we've been told we may infringe upon?
The short answer is that, without the clear and specific reason to believe -- for each claim at issue -- either that you don't infringe or that the claim is invalid, you risk triple damages (triple money owed to the patent owner). As to whether contacting the owner/licensee is hazardous, you ought to talk to someone who litigates (I don't).
Regards.
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JSonnab...
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I do litigate patent matters, and have really nothing of substance to add to Jim's advice. He's really spot-on.
Virtually all of your issues amount to business decisions. From a legal perspective, you'd want to assess your infringement position (i.e., how likely it is that you'd be found to infringe) and perhaps the validity position as well (i.e., how likely it is that you'd be able to invalidate the patent).
Each of these assessments can help you in making informed business decisions. They can also help you position if you decide to approach the patentee for a license.
- Jeff
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freddy46
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Quote Before you do that, you should have a very sound and specific reason to believe their claim(s) is/are invalid. It's not enough to just think, "Hey, those claims are really broad ... they must be invalid." You must have a specific analysis of all the claim terms, prior art that teaches all those claim terms, and perhaps some motivation to combine prior art references if two or more are needed to show invalidity. "Pretty sure" is not good enough when showing invalidity of an adversary's patent claim(s).
Thank you both for your replies. Very informative and helpful.
With regards to "prior art," is it fair to say that prior art can be from any field, not just the one relevant to a particular patent? (by that I mean that if we find prior art (patented or not) in some other unrelated field that expresses exactly the same concept/process covered in the patent but where the patent is in, say health care, but the prior art/technique was in say automotive care or cooking, that it would still be valid as prior art? Or does prior art imply that it must be from the same field?)
PS: and if prior art does imply same field, is that why so many patents were granted in the "Internet" field because methods that may have been used for 100 years (in various fields) were never used "over the Internet" before? (just curious)
Freddy.
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JimIvey
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Quote With regards to "prior art," is it fair to say that prior art can be from any field, not just the one relevant to a particular patent? (by that I mean that if we find prior art (patented or not) in some other unrelated field that expresses exactly the same concept/process covered in the patent but where the patent is in, say health care, but the prior art/technique was in say automotive care or cooking, that it would still be valid as prior art? Or does prior art imply that it must be from the same field?)
Yes.
Okay, that was a compound question, so I guess it deserves a compound answer. Yes. Yes. No.
If I have a patent for a cure for the common cold and a prior art system for crimped PB&J sandwiches infringes my claim, I'm SOL (Shoot! Out of Luck).
Where a particular field of a prior art reference becomes more important is during combination of multiple prior art references. For example, let's say that combination of a known sheep cloning process and automated bowling ball retrieval would be infringed by my claim. The fact that the combined references are from "non-analogous" arts is good for me. The examiner/defendant would have a hard time showing that one of average skill would think to combine cloning and bowling.
The specific language of the claim(s) is/are all that matters. Classification of prior art doesn't matter except when suggesting that different prior art would be obvious to combine.
PS: and if prior art does imply same field, is that why so many patents were granted in the "Internet" field because methods that may have been used for 100 years (in various fields) were never used "over the Internet" before? (just curious)
Yes, of course, we all "know" (without any substantive proof) that patents are being handed out freely, without substantive examination, to anyone with any Internet-related idea. Show me an example and I'll explain why I think it was allowed.
The problem is primarily that "convential wisdom" is at most "conventional" and that "common knowledge" is really just "common."
It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
Some web site attributes that to Mark Twain -- my apologies if someone else said that originally.
The short, responsive answer is that the claims in those "questionable" patents claim something more than everybody says they recite.
Regards.
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