Stop Predatory Patentees

   Posted by: dhcsoul   in Odds & Sods

Patent law’s requirement that a patent attorney be hired every time one becomes
aware of a patent that may relate to their activity is “irrational and
unjustifiably prejudicial,”
The Public Patent Foundation (“PUBPAT”) told the USA’s foremost patent court in a
case argued early February.

Growing increasingly concerned that “holders of wrongly issued patents
on aspects of e-commerce, software and business methods are using the
threat of receiving enhanced damages to extort royalties where none are
justified,” PUBAT decided it needed to act.

In their arguments to the court, PUBAT noted that in some cases
contingency fee attorneys send out patent notice letters to entire
industries, including small businesses, offering licenses for amounts
much less than the exposure the recipients face in litigation. Thye
note that such letters can be skillfully crafted to trigger the
recipient’s duty to avoid infringing the patent (exposing the recipient
to enhanced damages for willfulness), while not providing declaratory
judgment jurisdiction for the recipient to challenge the patent’s
validity. They call for an end to the practice in which  “Predator
Patentees Extort Small Businesses Which Cannot Afford to Challenge
Patent Validity”

Faced with the risk  of having to pay enhanced damages, many businesses
chose to pay royalties for patents that may very well not be valid or
infringed, solely because the royalties demanded are much less than the
cost of litigation, and often even less than the cost of an opinion.

PUBAT is seeking a reversal of the “Underwater
named for the 1983 case that established it)  finding which requires any person or business that becomes aware of any
patent to retain a patent attorney and seek a written opinion regarding whether
or not they infringe the patent.  Failing to do so leads a court to presume
infringement of the patent was willful and to impose a penalty three times
greater than for non-willful infringement.

PUBPAT argued that the Underwater Devices duty causes
two significant harms.

  1. it undermines the goal of patent law, to
    disseminate useful technical information, by encouraging scientists to avoid
    becoming aware of patents.
  2. it unfairly prejudices small businesses
    because the cost of seeking numerous patent opinions is a substantial financial
    burden (
    a written opinion
    regarding a single patent can cost up to $50,000 or more).

For more information Contact:

Daniel Ravicher, Executive Director, Public Patent Foundation:
917-843-3425; info@pubpat.org;

The Public Patent Foundation (“PUBPAT”) is a not-for-profit
legal services organization working to protect the public from the harms caused
by the patent system.  PUBPAT provides the general public, particularly those
persons or businesses otherwise deprived of access to the system governing
patents, with representation, advocacy, and education.  To be kept informed of
PUBPAT News, subscribe to the PUBPAT News List by sending an email with
“subscribe” in the subject line to news-request@pubpat.org.

originally Posted to cep.weblogger.com by David Soul on 2/17/04; 12:37:14 AM
in the IP section.


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Tags: CEP, intellectual property

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