In the competitive world of innovation, there is always the possibility of patent infringement. Patent disputes can be highly technical and time-consuming. How can businesses minimise the risk of patent disputes?
What is a patent dispute?
Intellectual property disputes come in all shapes and sizes. A highly publicised patent dispute occurred in 2013, when a Manhattan federal jury ordered Nintendo Co. Ltd. to pay Tomita Technologies International, Inc. more than $30 million in damages in a patent infringement case concerning 3D technology. Tomita claimed that Nintendo’s 3DS hand-held video game system infringed on Tomita’s patent, titled “Stereoscopic image picking up and display system based upon optical axes cross-point information”. The complaint alleged that Nintendo’s infringement was “willful”. Nintendo dismissed the claims but the court ruled in Tomita’s favour. For every 3DS sold, Nintendo had to pay Tomita $9.80. In 2016, the court reversed the initial decision which invalidated Tomita’s original award.
As the IP landscape becomes more complex, so does the interpretation the courts continue to place on the concept of patentability. Recent Supreme Court decisions have altered patent eligibility and substantially affected patent litigation. In 2014, the United States Supreme Court issued a landmark decision in the intellectual property case Alice Corp. v. CLS Bank International. Melbourne-based Alice Corp. attempted to patent a computerised system for limiting the risk of one party in a financial transaction defaulting on its obligations. In a unanimous decision, the Supreme Court maintained that the patents granted to Alice Corp. by the United States Patent and Trademark Office (USPTO) were invalid because the software-related inventions were abstract ideas and therefore not patentable. Prior to Alice, complaints were rarely dismissed at the pleading stage because all patents were presumed to be valid. However, this Supreme Court decision – followed by a heightened pleading standard – have resulted in higher dismissal rates for business method and software patents.
Originally the USPTO, in common with other Patent and Trade Mark offices worldwide, was developed as a haven for innovation, protecting inventors and their IP. But over the last two decades, many PTOs have struggled to cope with an increasing volume of patent applications, and have been rocked by constant technological change and developing legislation. Companies should consider the necessary steps to protect their own IP portfolios and invest in the best processes to protect their ideas. The revocation of patents is a difficult process to complete, involving lengthy infringement lawsuits and hundreds of thousands of dollars. To minimise the risk of experiencing a patent dispute, proactive IP management which includes research is key.
Protection from patent disputes
Not having a strong patent search strategy and a variety of other reasons can explain why a patent dispute may occur. But there are ways to minimise the risk of an infringement allegation. One way is to ensure that products and services do not encroach on existing patents; yet another is to build a strong patent portfolio that can be used in negotiations with competitors (oftentimes necessary for reaching a commercially acceptable solution that gives you access to a market for your products). So how can organisations obtain protection from patent disputes?
Companies need to ensure their R&D departments are on top of a rapidly changing IP landscape and that IP teams are monitoring the patent activity of competitors. In an era of constant technological change, information that was valid last year or last month can quickly lose relevance. For innovative companies this can pose a serious challenge.
By harnessing the power of patent data, organisations can understand what competitors are working on and the new innovations they are patenting, sometimes years ahead of product launches. This insight will help companies to avoid investing in previously patented ideas, and guide their R&D strategy. Read how our Innovation Intelligence Report helps organisations to study patent activity and harness the power of patent data.
Further, competitor intelligence services use big data to generate information about emerging industry trends, enabling companies to stay ahead of the competition. And, as happens in most mature markets, companies often work on similar projects at the same time (which is when disputes may occur), making competitor intelligence even more important as companies prepare to mitigate the risks involved. Read more from our IP guru Ed White on how to generate competitor intelligence – it’s easier than you might think!
IP teams must have the time to dedicate to patent filings and administration to ensure new innovations are secure. IP departments may be overstretched, but an external team extension could relieve the burden of a number of administrative IP tasks. This allows more time for harvesting new innovation ideas from R&D, while producing an improved IP pipeline for the future.
Read how big data can be used to better manage this influx of information here.