Comments on: Patent arms race http://www.thinkipstrategy.com/ipthinktank/344/patent-arms-race/ Trusted advisors to the world's most innovative companies Mon, 16 Jan 2012 09:10:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Duncan http://www.thinkipstrategy.com/ipthinktank/344/patent-arms-race/comment-page-1/#comment-1296 Duncan Fri, 18 Jul 2008 00:19:44 +0000 http://localhost:100/thinkipstrategy/?p=344#comment-1296 <p>Hi Michael - thanks (sorry about the delay in publication of your post - there's a second button to hit after you post your comment for it to go live.)<br />Right.  But be careful of taking confort from this without making everyone think about it properly.</p> Hi Michael – thanks (sorry about the delay in publication of your post – there’s a second button to hit after you post your comment for it to go live.)
Right.  But be careful of taking confort from this without making everyone think about it properly.

]]> By: Duncan http://www.thinkipstrategy.com/ipthinktank/344/patent-arms-race/comment-page-1/#comment-1295 Duncan Fri, 18 Jul 2008 00:16:30 +0000 http://localhost:100/thinkipstrategy/?p=344#comment-1295 <p>Thanks Jackie - great points.<br />As you say, understanding your opponent is obviously critical as it leads to understanding how they might 'play the game'.  However, there's a lot more to the game than that.  There's 'terrain' for example (which probably roughly equates to the rules of the game).  The rules of the game are different depending on the country you're in and the industry.<br />In your example, you sit down to play chess against an 8 year old, you find out he's not a chess master, but a novice.  However, it turns out that you're not playing chess, but  'go' - and you don't know the rules.<br />So, to pick up the example I gave before - in pharmaceutical litigation in the US, it is all about Paragraph IV certifications and generic companies fighting for 180 days of exclusivity.  There is no point at all in acquiring other patents and counter-suing the innovator company - because of the regulatory overlay in that game.  There's a lot more point in forcing a co-marketing agreement with the innovator, which gives the generic earlier access as an 'authorised generic' and allows the innovator a cut of the generic version's sales as well.<br />Similarly - most other jurisdictions award attorney's fees to the winning party in any litigation.  This and other procedural factors acts as a large dampener on counter-suit based on acquired patents.  It simply doesn't happen any where as frequently outside the US as it does within the US.<br />There are other factors besides the nature of your opponent and the terrain but maybe this is better for a subsequent post.</p> Thanks Jackie – great points.
As you say, understanding your opponent is obviously critical as it leads to understanding how they might ‘play the game’.  However, there’s a lot more to the game than that.  There’s ‘terrain’ for example (which probably roughly equates to the rules of the game).  The rules of the game are different depending on the country you’re in and the industry.
In your example, you sit down to play chess against an 8 year old, you find out he’s not a chess master, but a novice.  However, it turns out that you’re not playing chess, but  ‘go’ – and you don’t know the rules.
So, to pick up the example I gave before – in pharmaceutical litigation in the US, it is all about Paragraph IV certifications and generic companies fighting for 180 days of exclusivity.  There is no point at all in acquiring other patents and counter-suing the innovator company – because of the regulatory overlay in that game.  There’s a lot more point in forcing a co-marketing agreement with the innovator, which gives the generic earlier access as an ‘authorised generic’ and allows the innovator a cut of the generic version’s sales as well.
Similarly – most other jurisdictions award attorney’s fees to the winning party in any litigation.  This and other procedural factors acts as a large dampener on counter-suit based on acquired patents.  It simply doesn’t happen any where as frequently outside the US as it does within the US.
There are other factors besides the nature of your opponent and the terrain but maybe this is better for a subsequent post.

]]> By: Jackie Hutter http://www.thinkipstrategy.com/ipthinktank/344/patent-arms-race/comment-page-1/#comment-1294 Jackie Hutter Thu, 17 Jul 2008 12:01:24 +0000 http://localhost:100/thinkipstrategy/?p=344#comment-1294 <p>Duncan, I am not sure that I would say the need to search for third party patents varies with industry or country.  Rather, the need varies based upon the sophistication of the attorney, company or company funding source on the other side.  Using your term "arms race", one defends against an "enemy" with the ammunition that is needed.  </p> <p>If the product is a low tech consumer product, but the defendant is a large and sophisticated company, I would certainly recommend doing a search for third party patents because this defendant could have the knowledge and inclination to use an offensive patent acquistion strategy to defend against a lawsuit.  In your Tom Tom example, I expect that the folks managing this company had the knowledge to understand this offensive strategy or they had the funding to hire expensive patent litigators who recommended this strategy.  </p> <p>However, even if the technology is high tech, if the defendant or his attorney is not sophisticated or money is tight, then the offensive strategy of third party acquisition is either not going to be thought of, or if it is, they will be less able to execute on the strategy.  So, a search may not be the best way to use the litigation budget.</p> <p>On balance, I think you have to think about patent litigation as you would any other "game".  The subject matter is less important than indentity of the players.  To use an analogy, if you are playing chess against a 8 year old chess prodigy, it matters more that they are a chess prodigy, than they are an 8 year old, right?  </p> Duncan, I am not sure that I would say the need to search for third party patents varies with industry or country.  Rather, the need varies based upon the sophistication of the attorney, company or company funding source on the other side.  Using your term “arms race”, one defends against an “enemy” with the ammunition that is needed. 

If the product is a low tech consumer product, but the defendant is a large and sophisticated company, I would certainly recommend doing a search for third party patents because this defendant could have the knowledge and inclination to use an offensive patent acquistion strategy to defend against a lawsuit.  In your Tom Tom example, I expect that the folks managing this company had the knowledge to understand this offensive strategy or they had the funding to hire expensive patent litigators who recommended this strategy. 

However, even if the technology is high tech, if the defendant or his attorney is not sophisticated or money is tight, then the offensive strategy of third party acquisition is either not going to be thought of, or if it is, they will be less able to execute on the strategy.  So, a search may not be the best way to use the litigation budget.

On balance, I think you have to think about patent litigation as you would any other “game”.  The subject matter is less important than indentity of the players.  To use an analogy, if you are playing chess against a 8 year old chess prodigy, it matters more that they are a chess prodigy, than they are an 8 year old, right? 

]]> By: Duncan http://www.thinkipstrategy.com/ipthinktank/344/patent-arms-race/comment-page-1/#comment-1293 Duncan Wed, 16 Jul 2008 21:34:00 +0000 http://localhost:100/thinkipstrategy/?p=344#comment-1293 <p>Thanks Jackie<br />Do you agree that the need to do this varies with country and industry?  (Not really a problem at all in pharma in the US, for instance and rarely a problem in other industries outside the US.)<br />Most definitely a major problem in the US in IT / Communications industries, though.  This reinforces the logic behind patent pools such as <a href="http://www.alliedsecuritytrust.com/" rel="nofollow">Allied Security Trust</a>, <br />What do you think?<br />Are there other contexts in which the need to search for third party patents is much lower?</p> Thanks Jackie
Do you agree that the need to do this varies with country and industry?  (Not really a problem at all in pharma in the US, for instance and rarely a problem in other industries outside the US.)
Most definitely a major problem in the US in IT / Communications industries, though.  This reinforces the logic behind patent pools such as Allied Security Trust,
What do you think?
Are there other contexts in which the need to search for third party patents is much lower?

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