Prioritizing Patent Protection in 2010

For both businesses as well as lawyers, 2009 is a year many of us would like to forget. Investor scandals, the heath care crisis, the credit crisis, market instability, and increases unemployment all led to a largely unproductive business year.

This year also saw for the first time a decrease in domestic patent application filings. Many businesses strapped-for-cash have opted not to seek the advise of counsel when it comes to protecting their business ideas. More problematic, these companies have become apathetic when it comes to patent protection. Many have viewed cases like In Re Bilski as a suggestion that patents are no longer worth what they once were. In addition, many industries like banking and e-commerce have simply come to a belief that the Patent Office doors are no longer open to them. This is all untrue on multiple levels.

For whatever the reason, this apathy has led many companies to abandon or greatly decrease their budgets for patent protection. Moreover, it has virtually eliminated most mainstream enforcement proceedings relating to patent and trademark rights. Instead, many companies have opted to simply allow competitors to trade off their ideas and goodwill instead of shelling out money to the lawyers.

The result is two fold. First, the pipeline of innovation has slowed such that when there is a market and economic rebound within the next 24 months (which yes, there certainly will be in some form) there will be a shortage of registered intellectual property in which to enforce against the competition. Second, as many companies have allowed infringement to occur for several months if not years, there will be a greater basis for affirmative defenses sounding in latches or acquiescence if you do finally sue.

Here are three realistic points regarding selection of patent counsel in 2010:

1. Choose the Right Firm

The proverbial idea of “bigger is better” no longer holds true. Hiring the New York or Washington DC firm is not the answer – many secondary markets have just as good patent attorneys.

Also, the big patent firms have greatly decreases their number or attorneys – and many of the better attorneys from these firms have left to set up smaller boutique practices within the past year. In addition, many of the larger firms are charging more for patent applications than others. Many others are charging high rates for patent applications, because their overall volume of patent filings are down. Realize this and you are already far ahead of the game.

Look for a balance – an attorney who wants to be your patent draftsman who has some experience, will work with you on pricing, and will not nickel and dime you for the benefit of a larger firm with high overhead costs. Look for the team player.

2. Look toward Flat Fee Patent Filings

Patent application preparation and filing can be done under a flat fee based largely upon the technology subject matter. Patent lawyers who know what they are doing can draft patents based upon a pre-set budget. Moreover, if there are several patents in the subject matter which will lend to the same background of the invention and/or specification – an across the board discount may apply – which can lead to greater value for the company and more patent protection down the road.

The key is recognizing that preparing several patents in a technology field at the same time can increase the number of patents in your portfolio while at the same time creating a more effective per patent filing end cost. Also, realizing that paying more up front may lead to a better bottom line is important. Planning and budgeting on your part – and effective communication with patent counsel - may end up creating more end value on both sides of the table.

3. Bargain Basement is not the Answer

There is a wise old statement that I have used a lot in 2009: “you get what you pay for.” This certainly applies for pricing for patent applications. I have heard many a potential client call and say “I talked to another attorney in town and he is willing to do it for half your fee.” I have also heard a lot of start up companies talk about going to invention disclosure companies, instead of a traditional firm, because of an advertised price on a website.

Remember always that cheapest isn’t always best. Many of those same folks who one year ago called and said they found someone cheaper went with those groups – and then late came back to me – after spending lots of money on hidden costs and failed promises. This caused the end costs for their patent protection to be higher than if they had gone with me in the first place.

With decreased budgets businesses cannot afford to prepare two patent applications, one with the cheapest firm and the other with the firm that knew what it was doing. There are certainly a higher number of patent attorneys out there that say they can help you – just don’t be fooled by low end pitches.

You don’t go to 10 doctors and say, “I don’t care about how good you perform open heart surgery, are you the cheapest?” – and then go with the cheapest cardiac surgeon in town. Think about that next time you hire your patent lawyer.

CONCLUSION

All market indicators suggest 2010 is going to be somewhat better than 2009. Let’s hope so. Let’s also pray that many of the lessons learned in 2009 will lead to a more productive and better business year in 2010. That being said, don’t forget that innovation is what drives this country – and without adequate patent protection, those market drivers will not be there to create a competitive advantage when things do finally get better.

For more information regarding patent drafting services, go to http://www.patentlawmiami.com/ or http://www.floridaipattorney.com/.

Wishing You the Best This Holiday Season !

The Patent Law Miami Blog wishes you and your loved ones a safe, happy and rewarding holiday season.

Should you desire additional information regardng the preparation and filing of domestic patents, feel free to visit www.PatentLawMiami.com. Likewise, should you need information regarding preparation and filing of United States Trademark Applications, information is avaiable at www.MiamiTrademarkLaw.com.

Thornburg Honored as 40 under 40

Miami patent attorney Robert H. Thornburg was recently honored as one of the 40 under 40 outstanding lawyers of Miami Dade County. Mr. Thornburg was the sole Registered Patent Attorney and patent litigator featured in the 2009 class. For more information, visit www.PatentLawMiami.com or www.TrademarkLawMiami.com.

The Importance of Electronic Records Hold Letters and Pre-Suit Mirror Imaging.

In December 2006, Rule 34(b) of the Federal Rules of Civil Procedure was modified to include provisions relating to electronically stored information (including electronic files such as word processing, spreadsheets, databases and email). Now almost three years later, there is a wealth of authority as to the importance and complexity of electronic discovery (also referred to as E-Discovery for those in "the know").

The new Rule 34(b)(ii) allows discovery of electronic evidence in two forms: (i) in a form that is reasonable searchable (i.e., OCR TIFFs or PDFs), or (ii) in a native electronic format.

With these new rules, it is more important than ever to issue an Electronic Records Hold Letter at the advent of suit. Under recent Florida case law, it may be prudent for such a hold letter to be issued upon a reasonable threat of suit (i.e., even before a lawsuit is filed against you or your client).

The litigation hold letter should go out to the in-house counsel or executive tasked with oversight of the litigation. However, both the litigation attorney and in-house counsel should ensure it gets to the right people that may have discoverable information (like records custodians). Morover, it should be explained in English the purpose of such hold and the proper scope of the hold.

Drafting of an e-discovery hold letter represents an art unto itself, but can be extremely valuable should an accusation of spoliation be made by counsel later in the suit. While costly, the imaging of implicated drives by an outside forensics expert may also be a prudent step to avoid inadvertent deletion of potentially discoverable information.

The Supremes Grant Cert in Bilski - When is Code patentable?

Today, the United States Supreme Court granted cert to review the Federal Circuit's recent opinion in In Re Bilski. The Bilski opinion deals with creating a proper test whether a patent claim that includes some form of machine readable code (i.e., a computer program) is patentable subject matter under 35 U.S.C. Section 101. A mathematical formula, by itself, is not patentable (i.e, E=MC2). However, in some circumstances, application of a specific algorithm to a problem may be proper subject matter to satisfy Section 101.

Many patent attorneys (including myself) have viewed the Bilski test as an unworkable and anti-patent standard, which has resulted in several duly issued patents to be found invalid by various Federal courts. This has been exceedingly frustrating in the new world of business method patents. The result has been a large amount of uncertainty and uncomfortableness in the business world whether to spend the money on seeking to acquire patent protection and/or to attempt to enforce patent rights, where a claim includes some form of computer program.

While it may take some time (likely 9-12 months), lets hope the Supremes, at the very least, articulate some clear standard. Perhaps, we can even pray that the High Court shall articulate an opinion that reverses the current anti-patent climate we are now in.

The Pitfalls of not obtaining a Patentability Search prior to Filing a Utility Patent Application

Due to the recession, many small companies and solo inventors are opting to file for utility patent applications without aide of a prior art search to provide some form of pre-filing patentability opinion.

While this can save initial costs, such prior art searches can be done for less than a $1,000 by a qualified searcher in Washington, D.C. Moreover, these searchers typically use the same search tools at the United States Patent & Trademark Office as an the examiner who will ultimately review the application.

Search results can be submitted during prosecution in the form of an Information Disclosure Statement (IDS). By having the patent examiner review these references during prosecution, the later issued patent is stronger and likely more enforceable during subsequent litigation. For example, a detailed IDS reviewed by an examiner can help create a valuable defense to a later claim of inequitable conduct during a patent infringement suit.

With the Downturn in the Economy, Businesses look outside of Big New York IP Firms

As more evidence that cost conscious companies are looking at more effective ways to secure and enforce their intellectual property rights in this recession, New York based Fish & Richardson has reported trimming 35 members of its IP legal staff.

Earlier this year, Fish & Richardson had admited 49 attorneys and technical specialists had been asked to leave the firm due to "unprecedented levels" of economic uncertainty.