Leverage If You Are Threatened with Patent Infringement (and why you should ignore FOSSpatents)

Gene Quinn over at IP Watchdog has some good information on "What To Do If You Are Sued for Patent Infringement".  Go read the entire article.  Whatever you do, please ignore the advice of non-attorney commentators (such as Florian Muller @ fosspatents) because they can be shortsighted and are not qualified to provide the complex legal analysis and advice you will need.  (e.g. from one of Florian's latest posts about the Lodsys patents, any patent attorney should be able to recognize that Florian does not understand the law regarding patent infringement and numerous other issues.)

For example, some commentators (including Florian Muller @ fosspatents) are advising targets of patent trolls to roll over and pay the license fee; Florian is even advising you that the license agreement that has not been made public is acceptable for you to sign.  I very much question the soundness of this advice, especially considering the above article at IP Watchdog. Contrary to the bad advice and legal analysis put forth by Florian, there are options available to companies threatened by patent trolls and even if the outcome is a license agreement, Florian's legal analysis and advice is not solid. (I could write a white paper explaining why Florian's analysis is messed up, but I don't have the time right now.  If anyone requests me to provide more detailed analysis, I will put it on my to-do list.)


For starters, in my opinion, Lodsys probably LOVES Florian's analysis and opinions.  (I have no connection or contact with anyone at Lodsys, Apple, and no longer any contact with Florian).  He seems to be making all the arguments that support the troll's business plan - you can't afford to fight, don't even try, the trolls arguments are decent, just give in and sign the license.  Florian dismisses prior art searching, dismisses non-infringement arguments when he clearly does not understand the law, ignores invalidity arguments, misinterprets the claims to determine that Lodsys has a case that is possibly good enough to go to trial (remember, he is not an attorney), and makes statements such as "app devs will lose" unless they have blanket coverage from someone else.  (note - of course, Florian includes CYA language in his posts so that he can have wiggle room out of his responsiblity for misleading people.)

Generally, this is why Florian is wrong:  "In order to be a party at the peace talk table, however, you need to have leverage of some kind, otherwise you are not a party to talks as much as you are having terms dictated."  See Gene Quinn's article.  Gene does not provide a list of what that leverage might be, but he alludes to invalidity or reexam arguments.

To expand on that article, here are potential strategies that could add leverage during negotiations for a company threatened by a patent troll:
- have a non-infringement opinion
- have an invalidity opinion
- have a reexam prepared to file or filed
- file a motion for summary judgment
- file a declaratory judgment action
- consider counter claims (tortious interference, antitrust, etc...)
- have IP insurance provisions
- help fund a joint defense agreement
- hold off settling until a Markman opinion

Many of these strategies can be implemented by a small company.  Some companies may even implement more than one of these strategies at the same time.  As I have said before and Gene notes: "The advice you need, and will get if you hire an attorney, will be tailored to your unique circumstances."  There are many variations of these strategies and others that can be implemented that will NOT cost one million dollars.  You need to determine the right strategy for your company based on your circumstances.

Any good negotiator (which IMO excludes Florian) will tell you that you do not negotiate with yourself.  Thus, I have no idea why Florian claims to be supporting application developers when he writes analysis that attempts to shred their potential leverage arguments and advises them to pay what Lodsys is asking.  If someone was truly supporting the application developers, they would be trying to bolster the application developers leverage arguments (as I have been trying to provide on this blog).


Another issue I have with Florian is he seems not to recognize the value of a non-infringement or invalidity opinion, which can reduce a significant amount of risk for a comparatively small cost.  Just another fail in his analysis.  (I think his excuse for will be that none of the accused application developers have the resources available for any strategy other than pay the fee.  Again, I think this shows why Florian is not qualified to advise anyone on strategy or risk concerning patent litigation.)

On a personal note, Florian accused me of being an "anonymous smearer".  While I am doing this anonymously, my response still stands:  "FYI rebutting factually inaccurate statements does not make me a "smearer", it makes you uninformed".

If you are threatened, whatever you do, hire an attorney to advise you for your particular circumstances.  There are many options and strategies available to you whether you fight or negotiate.

Just my opinion, go hire your own attorney for legal advice.
-USPA