The patent system has been intended from its very earliest days to create the very scenario complained about by those who erroneously claim that patents harm innovation. Patent are by specific design intended to give the patent owner an exclusive right to prevent others from making, using, selling and importing products (or services) covered by a U.S. patent. The exclusive rights of a patent, which come with virtually no real fair use rights except in the very limited scenario of pure research, forces industry to come up with other ways to move forward that do not infringe on the patent. That is specifically why patents promote innovation rather than harm innovation, and it the point missed or more often completely ignored by critics.
The short of it is this: When an innovative person is blocked by a patent they design around. This is precisely why the Supreme Court has typically focused patent eligibility considerations on whether an idea would be preempted by a patent. If an idea as a whole is preempted then no patent can issue. If, on the other hand, there remain ways forward then it is incumbent upon the second comers to either find those ways forward that do not infringe, or to simply stand clear of the rights granted the patentee. Instead, what we have today is an awful lot of people complaining that they can’t do what they want to do and, therefore, that has to mean that patents harm innovation. Simply not true. What it means is we have a lot of uncreative people throwing up their hands and giving up rather than innovating around, and forward, as the patent system is designed to encourage.
It is impossible for critics to understand, but it has always been the rigid exclusive nature of patents that has caused innovation to move forward. As one area because saturated in order to provide better functionality or reliability an entire new paradigm must be discovered, refined and perfected. It is those paradigm changing innovations that we all say we want, including the critics, but paradigm changing innovation doesn’t occur in a world where copying goes unchecked. Paradigm shifting innovation happens only when there is a sufficiently high barrier facing the innovator. Then and only then does the innovator create.
The comment concluded that this fellow found himself in a terrible position with no good choices. On that point we can likely all agree. But the interesting question is why is he caught between a rock and a hard place, in a catch-22?
In my experience those who find themselves facing a cease and desist letter, or a patent infringement lawsuit, have failed to do several important things prior to launching a product or service. First, in most cases the party facing the lawsuit did engage in any kind of evaluation before launch to determine whether they would be infringing any patents. While such an investigation prior to launch is not required, by not doing such an evaluation you are really doing nothing more than engaging in an exercise of hope. Hope is not a business strategy, particularly when there is a patentee who believes their rights are being infringed.
Second, those who find themselves in this situation always cite the $2 million figure, which is the industry agreed upon average attorneys fees to litigate a patent infringement matter to conclusion. They rightly point out that they don’t have $2 million to spend. But the next, obvious question is whether they have insurance. So far I’ve never seen a situation where those being sued for patent infringe actually have patent infringement insurance to cover defense costs. Patent infringement insurance is available, but seldom purchased.
Simply stated, if you have not engaged in any kind of research to determine the likelihood that you are infringing, and/or you do not have patent infringement insurance, then the terrible choices you face after you get sued or receive a cease and desist letter are really of your own making. Poor business choices are what has so many claiming foul rather than any defect in the patent system. The patent system is operating exactly as designed.
Now for one big caveat: We all know that there are parties engaging in abusive litigation tactics and taking advantage of large and small companies. They exploit inefficiencies in the judicial system and leverage that to extract small, less-than-nuisance-value settlement payments. Something needs to be done about patent trolls; there is no doubt about that.
But even still, who now doesn’t know that there is a patent troll problem? It is all over the news; even President Obama speaks of patent trolls and abusive patent litigation. Yet, even knowing that hungry sharks are swimming in the shallow water just offshore you decide to get into the water anyway? Fine, but should you be in a boat rather than in a wet suit camouflaged like a seal?
Simply stated: If you know there is a patent troll problem and you are not going to take steps to protect yourself, as through procuring patent infringement insurance, then the problem you face is your own fault. Failure to operate your business in a business responsible way shouldn’t, and doesn’t, mean that the patent system is the problem.