Increasingly of late – particularly since our recent much publicized triumph in court against a patent troll – I keep getting asked for advice on how to combat patent parasites. So… here they are: our top-10 tips for fighting back against and conquering patent bloodsuckers.
First, your applause please for the KL guys behind the tips (and our fight against patent trolls):
- Nadya Kashchenko, Chief IP Counsel
- Dmitry Polyakov, Head of IP Protection & Defense
- Nikolay Borovikov, Head of IP Research & Analysis
- Sergey Vasilyev, Senior IP Counsel
From our various battles over the years with patent piranhas in different countries, we’ve come to a number of conclusions about patent trollism. Of course, every country has its own particular economic and socio-political features, plus its own unique patent legislation, but still, on the whole the pattern pretty much stays the same when it comes to trollism – with just a few minor differences. For both clarity and practicality here I’ll concentrate on specifically the US patent environment, since trollism there is currently the most out of control and problematic for innovative companies.
1. Chill, man.
So, one day you get a mass mailout letter from a patent troll containing a polite request to hand them x amount of dollars as a license payment for use of their patent. You read the letter to find out what this patent is all about, immediately twig it’s nothing but complete and utter *!^#$%@&+, your pulse starts to race, then your body temperature rises, then your blood starts to boil… and then an urge overcomes you to crush these bloodsuckers! No – better would be to torture them first for a good long while… and only then crush them! And you do not give a monkey’s if the author of the patent is some hotshot Harvard graduate.
Next, when the initial anger has died down a bit the reverse effect may kick in – apathy and ‘whatever’ and ‘screw it all’. BUT!: Both the former and the latter reactions – though completely natural and understandable – are in fact the wrong ones: Emotional responses don’t just hinder your dealing with the troll, they also put your business in jeopardy.
Instead of emotion, take the sound advice from the cover of The Hitchhiker’s Guide to the Galaxy – Don’t Panic! After all, trolls send payment-seeking letters to tens of thousands of developers in one go, thinking the more letters – the more chance at least some will get all het up, react inappropriately, and eventually maybe pay the kickbacks. But we’re not gonna do that, right? Right. Then get a grip, drop the emotion, and get your calm-and-collected thinking cap on.
Note from experience #1: We were once sent a claim from Italy for alleged infringement of a patent on some mobile technology. Tagged onto the claim were loads of different demands – from an injunction to paying license fees. The patent was based on really broad formulas that would cover just about anything connected with mobile tech.
Here, this No. 1 rule came into its own: Don’t Panic! We meticulously analyzed the patent, searched for prior art, and started thinking – how could they apply to patent already totally obviously existing technology when they did? And after having dug about in Italian legislation it turned out that the ‘patent’… wasn’t quite a patent! The Italian patent body had granted the ‘patent’ without checking it for novelty (to verify that it was actually some new bit of tech), and only a formal examination had been conducted. The Italians have a system whereby publications on the existing levels of technology aren’t considered (er, hehhh-LO???); however, there were such publications! So, having mentioned politely (and calmly, remember?!) to these Italians that they appear to have made a big mistake coming at us with pseudo-patents, well, let’s just say their stream of letters came to a stop all of a sudden.
Curiously, our correspondence with Italy was conducted with a very respected professor in the field of intellectual property (IP). Despite having his own legal firm and all the IP expertise and experience that goes with it, he nevertheless didn’t seem to understand the simple – proven! – and blatantly obvious fact that he was wrong!
2. Ask for more.
If you receive a full ‘claim chart’ detailing your ‘infringement’, go straight to the next tip – No. 2. But if all you’ve received so far is a mass mailout letter, what you need to do after following tip No. 1 (keeping cool) is to try and get to the bottom of how the troll’s patent might apply to your technologies.
What you need to do here is make the troll work up a bit of a sweat – to send it a long, complex list of clarifying questions. For you can be 100% sure that the troll will do the same and hit you with such a list. But beware – you’ve only 30 days to reply to their questions, (as have they).
Some think that the best thing to do is to simply not answer the troll’s questions – hoping that the troll will give up its pestering and just forget the matter. That could happen, but there are at the same time risks with such an approach: If the matter eventually gets to court and the troll says that it had ‘wanted to settle amicably – but the accused infringer acted in bad faith and didn’t want to do the right thing and have a friendly chat to sort things out like adults’ – then this of course would be a big minus for the respondent (patent legalese for a defendant). And should the court ultimately rule that a patent was in fact infringed, the respondent may be deemed to have willfully infringed, because it knew about the infringement (it was told about it in the mass mailout). And this is not what you want at all, as willful infringement can increase the sum of court-ordered payments to the troll by three times.
So yes, first thing – make sure you reply (within 30 days); second thing – it’s best to make sure those replies are always on paper, and delivered by courier. Such correspondence can last months; the main aim is to get from the troll clear and detailed explanations regarding how its patent might be being infringed, and to make it send you a claim chart with an explanation of all the terms (that is, definitions) used.
This is a stage for making preparations, and for getting an understanding of what’s really going on; that is, to work out if the trolls might be just small time heisters trying to scare you and make an easy buck or million. At the same time, doing all the above during this stage protects you should things eventually go to a trial – from being accused of willfulness.
And the troll can accuse you of willfulness for just about anything under the sun. Example: in March of this year a lawsuit was filed with a Delaware court by mega-troll Intellectual Ventures (IV) against Symantec for alleged infringement of several patents. IV’s filing asserts willful infringement by Symantec, citing certain references to IV’s patents contained in Symantec’s own patents. Thus, IV claims that Symantec knew or should have known about the existence of technologies patented by IV, which in turn testifies to the fact that, in its opinion, Symantec is guilty of willful infringement, which incidentally incurs triple damages!
3. Strategy and tactics. Noninfringement.
A word there’s no getting away from.
Here the bare bones of the patent need to be compared with the bare bones of your tech, clarifying questions (the more the better) need to be prepared, how this patent might have affected other innovative companies (and if it has – which companies in particular) needs checking, how the patent got into the troll’s grubby paws in the first place needs ascertaining, possible scenarios of how things will go need to be envisaged, and defense tactics need to be fine-tuned. All these actions allow you to decide on the best defense strategy for a pre-trial settlement and what your hand of cards looks like should you end up in court. It’s quite possible that you’ll find that there’s no overlap at all between your tech and that under the patent.
The strategy of seeking noninfringement is best used when you receive a mass mailout letter (against which, btw, there’s an active battle going on).
Note from experience #2: Over the years we’ve received numerous patent claims which we successfully settled before court without any payments to the trolls. How? Easy. We decided to conduct real extensive research of the patent and to compare it with our tech. The result? The two differed to such an extent that it got us wondering whether the troll even understood exactly what it was accusing us of!
4. Strategy and tactics. Invalidity.
Is everything in the presented patents correct and proper? Look for contradictions in the patents, study all the examinations of them, and do a patent and nonpatent search for prior art. Again, doing all this will help you devise your defense strategy for a pre-trial settlement and give you as much ammunition – data – for fighting with in court if things get that far. You might find some prior art, and then the tables will be turned – it’ll be you that’s going after the troll.
Note from experience #3: A patent can be invalidated for so-called inequitable conduct. This covers all attempts at lying, falsification or distortion of the facts with regard to a patent application, which could have influenced the decision of the patent office (the United States Patent and Trademark Office (USPTO)) to grant a patent. One troll we came up against was stripped of a number of patents in a court case for one very simple reason: not all the authors of the tech involved were given in the patent application that was submitted to USPTO.
Other types of inequitable conduct that can lead to invalidation include the following:
- Premeditated non-presentation of prior art materials upon submitting a patent application;
- Premeditated concealment of information about known publications (regarding the tech that’s seeking a patent) in foreign languages, and also translations of such publications, either in whole or in part;
- Distortion of the facts with regard to the patentability of a claimed invention, including under oath.
Note from experience #4: We endured some very long-winded non-legal wrangling with a well-known company regarding the tech for placing suspicious objects into quarantine – patented way back in 1995 Over the course of the eternal toing and froing by letter, we developed several possible scenarios of noninfringement and invalidity of patents – and in several regions. While the main scenario was being developed (wrongful inclusion in the original application’s text of corrections, and subsequent changes in the formulas in accordance with the changes), another was also developed, mostly just in case the main one fell through. This back-up entailed a search of prior art and publications that could refute novelty at a reexamination. We had plenty of time for this search – in fact a whole 10 years (!) passed before the reexamination actually took place – and eventually we did find some prior art. So then, after a few negotiations in which we expounded all our findings and arguments, the opponent, seeing how we could easily force it to be stripped of the patent itself, quietly left and dropped its ‘case’ against us.
What’s important to note about patent invalidity is that it’s not only a very long, tiresome process; it’s also rather expensive – in this case about half a million dollars. A snip at the price.
So what else can be recommended invalidity-wise? Plenty. Tomes can be filled on this topic. But there is one other thing I should mention here: Make sure you have a real good delve into the past of the author. Where did he study, who were his associates, what libraries did he frequent, what printed works did he publish? There must be something on this gifted individual somewhere – be it on the net, in Harvard’s alumni records, or in the Library of Congress – something you could use to help your defense.
For example, have a chat with a former teacher or classmate… maybe a colleague was dropped as a co-author? If so, then you’ve got invalidation due to inequitable conduct right there. From poking into the past of the author you might even find that the ‘invention’ was not an invention at all, and already known about – and uncover proof thereof.
5. Strategy and tactics. Indemnification.
There’s another strategy for solving the troll claim issue. It can transpire that the tech that’s attracted the attention of a troll is licensed from another company. If that’s so, the troll isn’t your problem, it’s the problem of the company that owns the patent and licensed it to you. Of course, on the other hand, if you’re the one doing licensing out (the licensor) your licensee can – and by rights should – simply shift to you its troll-caused headache. But anyway, whether you’re the licensor or licensee, the main thing is to make sure to correctly document the legal relationship of the licensing, in particular to include a solid indemnity clause covering potential infringement of the patent rights of third parties.
Motions seeking indemnity payments make up a good half of all patent claims. They’re a feature of quite a few companies: They get hit with a claim and write to all their partners something like ‘we license this and that from you; therefore, in view of the litigation against us we are seeking from you indemnity as per our agreement’. However, the ‘this and that’ might not have anything to do with the patent. Thus they try to take you for ride. The least they might get is some free analysis of the claim from you.
Sometimes this reaches absurd heights lows. After having admitted liability in a patent suit, a licensor asks its partners to share the expenses!
6. Strategy and tactics. Third party license cover.
You can’t enter a river twice. Same with patents. If you license a patent from, let’s say, Microsoft, then software using the functionality of Windows (covered by that same patent) has immunity against infringement of the patent. Not good if your software is multi-platform.
Note from experience #5: In our recent court battle with Lodsys we were accused of infringing its patent on the functionality of Live Chat on our sites.
Live Chat was written in Java and licensed from Oracle. Oracle licensed the required patents from Lodsys; therefore, in this part of the lawsuit the court ruled to reject the claim against us and many other respondents.
7. Money and brains.
A smaller tech firm assailed by patent trolls could well say: ‘It’s easy for you, you’ve got the budget and the lawyers!’ Well, yes, but for the same reason that’s often why the trolls come after us and not them in the first place.
If a conflict goes to a trial, the budget needs to be real big, no – fairly massive. For example, our last two defenses against US trolls cost us $1 million and $2.5 million. But if there’s no money, and no patent expertise, don’t lose heart – there is another way…
That way is connecting with the other targets of a particular patent shake-down, joining forces to work together, and all chipping in to hire a legal representative. You could turn to an advocacy group like EFF, or to private non-commercial activists who can offer support against patent madness. Be calm, assured and logical, and make a firm stand for what’s right. Public opinion is on your side, and there’ve already been many instances when trolls have been taken on and beaten.
But if there are some funds kicking about waiting for a rainy day – this is that rainy day. You need to stand up and fight on your own – without the others. Here are several reasons why:
First, the situation regarding noninfringement will be different among the defendants, and for you it may simply be inapplicable or irrelevant. Everyone’s technology is different, so everyone will probably have a unique position in the case.
Second, with each respondent comes a unique viewpoint, and coming to a consensus won’t be that easy; a bit like Congress trying to agree on raising the debt ceiling!
Third, it can’t be taken for granted that the firm you all chip in to hire will come up with the goods…:
Note from experience #6: The firm you hire may not find prior art that would enable invalidity, even though prior art is in fact out there. We had experience of this in our case against IPAT. We had to endure a phone conference about the strategy for the court case with several dozen lawyers, with whom just the polite introductions took half an hour. After a further 30 minutes of their making a din, some half sensible ideas started to appear – but that meeting was a well-managed one overseen by an experienced moderator. Imagine one without!
In the end we hired a British company, which sure got down to work but… didn’t find anything. ‘If you want something doing properly do it yourself’, the saying goes, so that’s just what we did: we undertook the search for prior art ourselves. And found it! We also found two respected gurus of the IT industry who not only supported our position but also came up with some great advice for our invalidation strategy regarding IPAT’s patent.
8. US courts – due the utmost respect!
Let’s say your case finally gets to court and you get hit with a summons. You’ve followed the above recommendations to the letter and those of others, which means your guns are loaded – and cocked. Now, keeping tip No. 1 in particular in mind (stay chilled), it’s time to go to the next stage of the operation.
This is the ‘discovery’ stage: giving testimony and so-called ‘claim construction’.
The main thing here – you need to tell it exactly as it is, everything included. This is because if it should be revealed later that something was concealed, wasn’t presented in time, or contradictions were contained in testimonies, the troll will pounce on such ‘irregularities’. It will even attempt to demonstrate to the court that, since you’re such a bad ‘un, the judge might as well rule ‘guilty’ and fine you right away. I kid you not. The gall of these parasites.
Next comes the questioning in court. You basically have to always tell the truth, the whole truth, and so help you god, and answer all questions clearly and accurately. Remember that any inaccuracies or confusion on your part will be used against you.
Crucially, before every response to a specific question you can always add information, which hopefully will be interpreted in your favor.
Then there’s claim-construction – typically silly patent-world jargon for ‘defining terms’. This is a very tricky stage. If you go for noninfringement, the terms you use need to be defined narrowly. If you go for invalidity – widely. In any case, all your hard work covered in the tips above should indicate to you how to best define terms – so they work in your favor when used in court. Claim construction can be done on your own, or together with a group of respondents. The final result of claim construction will be a lengthy document (a real page-turner), like for example this one on Lodsys’s site.
As you can see, Lodsys defended its interpretations of terms, the group of respondents did the same for theirs, while we had interpretations of our own.
Next: you need to demonstrate to the court your total respect thereof, together with both openness and complete readiness to bring the respective long-winded sorry tale to an end asap once and for all. The era of courts sympathizing with trolls for reasons only known to themselves has passed. For, despite the demanded impartiality, judges are also human, also read the news and what’s on the Internet, and are well aware of the insidious nature of patent parasites. So help the court deliver a fair verdict.
Just be ready for the trolls doing everything to complicate this task. Like in Quest, you’ll be given difficult, contradictory and absurd tasks (‘hey, give us your source code – of all your versions, also all your documentation, together with all notes and sketches that accompanied the development’!). They’ll pelt tons of documents at you, bombard the court with all sorts of submissions, try and provoke hysterics with their brazenness, and so on, and on, and on… all to demonstrate to the court the malice and the arrogance of the boorish deviator that is its opponent. Main thing: treat this as you would a game (of Quest!) – don’t get worked up. Better: calmly analyze the actions and motivations of the trolls to get an understanding of what they’re all about. This allows you to keep your composure and your wits about you; to use your intellect and reason, and not let emotion take hold.
All correspondence, phone calls, Skypes, e-mails, everything, everything, EVERYthing that relates to the case needs to be formally recorded (copies, logs, audio recordings, screenshots, videos…) and archived. The troll will keep trying to knock you off balance and continue to shower you with requests for such things. The court understands perfectly the nature of these requests, so if you demonstrate speedy reaction times and complete readiness to cooperate, then (i) you’ll earn useful brownie points, and (ii) you’ll give the court the possibility to swiftly bring the troll down a peg or three.
Note from experience #7: In our defense against Lodsys we were suddenly asked to present screenshots of Skype correspondence with an expert who was speaking in court on our behalf. It was clear that Lodsys just wanted to exclude our arguments from the case. In principle, if there hadn’t been any screenshots, the court wouldn’t have paid any attention to their absence – since there were other, more convincing confirmations of our position in writing. However, both the availability of the screenshots and our openness demonstrated the seriousness of our intentions and the thoroughness of our preparations. Thus, Lodsys’s respective petition was left without consideration by the judge.
9. Media campaign
Shout it from the rooftops, on the telly, on the net, in the papers, in magazines… and tell it all – all the facts about patent troll court cases. Give interviews, put out press releases, tweet, do Facebook and even Instagram; write an anti-troll rap and get it on YouTube. Anything goes! Do this yourself and also together with other respondents. Besides a boost to your confidence you’ll also get some good feedback – support and useful advice. And of course it also helps demoralize the trolls.
10. The final frontier
The nearer a court case gets, the more scary it gets.
But this goes for the trolls too. At this stage we need to once again return to tip No. 1 and read it three times, then maybe watch Rocky, and then do some tweets full of certainty (better – a lot of tweets). Then you start carefully reading the new incoming correspondence from the troll. It will of course start attempting to give your collective brains a good washing, state its admiration of your persistence, and drop a hint or 10 that an amicable out-of-court settlement for a modest amount might be the best solution for all.
Every case is of course different, but if you’re 100% certain of your innocence – don’t give in to these overtures of the troll. You need to fight to the end! Especially at this late stage – you’ve come so far. It’s the law of the playground: You need to stand up to a bully. You have to remember that a troll really hates it when a case gets to court (key: patent invalidation = loss of licensees), and there’s a very high chance it’ll drop its suit.
But whatever you do, never celebrate a victory before the court hands down its decision, since your ‘certain’ victory might just be the troll playing with you – getting you relaxed while developing another mean attack.
Note from experience #8: Hints at an amicable settlement may start to appear long before court. And the nearer the court case, the smaller the appetite of the troll. We usually don’t react to them at all, and throughout mediation we insist on our position – noninfringement, and also directly tell them and the world that they’re nothing but swindlers – dishonest wrongdoers through and through.
So there you have it folks – the low-down on laugh-a-minute legal wrangling with patent trolls. Of course, there’s a lot more to it than what’s written here, but we’re ready to share it. Just ask in the comments or send us a message to our dedicated anti-troll email address!