Claims of Patent Infringement - need perspective

[motion guru]

In 2002 - my company was accused of patent infringement by one of the largest consumer products companies on planet earth. We took it seriously and we investigated - not having seen anything like what we had done already in the market place. As it turns out, the claim was false, but the company making the claim insisted that we prove that we were not infringing. This turned out to be an effort of putting food on the table for attorneys approaching $50k. The patent had nearly run out and the technology we were deploying didn't exist when it was awarded - and the both the means that we were using and the process alterations we had accomplished were materially different, better, and in complete variance with the claims of their patent.

In addition to this investigation, we put off one of our customers who was interested in the product we had developed until such time that we received a final legal opinion of non-infringement. This customer engaged their own legal counsel and investigated the patent and our design and arrived at a similar conclusion at a similar cost.

Once we were confident of our position, we got back to the large consumer products company about our findings - and they said . . . and I quote:

"Mr. Brown, our legal department is considered a profit center here at (company name) and we take infringement on our patents very seriously. If you do not immediately cease and desist from selling this product into the market place, we will sue you out of existence and then we will go out to dinner and have drinks"​

At that point, my attorney basically said to hang it up and under no circumstances were we to market or sell this project until well after the patent expires. Ugghhhh . . . this didn't seem fair. I gave the news to our customer who went elsewhere for a machine retrofit, and the weeks of time I spent with the IP attorney now had put me further behind on other work that needed to be done, plus I was out nearly $50k, money was tight and I couldn't be distracted any longer. I closed the book on that chapter of my life and we tightened our belts and moved on.

Fast forward to 2016 . . .

Last week, I received a call from this same company about a product we developed but never actually sold. In fact, I received help from members of the Practical Machinist on figuring out how to model a feature of the product in SolidWorks. Several members helped me out and I got the mates working for an animated video in 2010. At this point, the large consumer products company has asked me to review a list of their patents (which are directly related to the product we developed in 2009 - 2010) . . . but the apparent patent application related to this product for the large consumer products company is in 2011.

Do I just let it slide? (we haven't had time to market or sell this new product as we have been too busy doing other things) . . . or do I press the matter with the Patent office and have the patents that we have been claimed to be infringing invalidated. (Which I have been told could be likely by a patent attorney who has reviewed the patent prosecution along with the posts on the Practical Machinist back in 2010).

I realize that a $10-$15 million small corporation taking on a multi-billion dollar corporation makes no sense at all and I really don't have time for this - but at the same time, it is completely against the reason for which patent law was created for this company to be prosecuting (persecuting) companies like mine because they are concerned that we enable their competitors with a technological advantage. Taking them on would be expensive and I am not sure what it would accomplish . . . but the principle of the thing bugs the hell out of me - but I also have 55 employees to think of. I don't care if I live in a trailer - I'll be fine . . . but my employees have kids / college loans / homes / etc. to pay for.

Do the business owners / managers among this forum have any advice? Should I just ignore and let it go? Push back? I need some perspective.

 

[Gordon B. Clarke]

In any other country other than the USA I'd go ahead but in the USA suing seems to be a profitable business.

Have you read their patent to see what it in fact stipulates what is unique about it? Here (Europe) that's one of the first things a patent must stipulate.

 

[dcsipo]

In 2002 - my company was accused of patent infringement by one of the largest consumer products companies on planet earth. We took it seriously and we investigated - not having seen anything like what we had done already in the market place. As it turns out, the claim was false, but the company making the claim insisted that we prove that we were not infringing. This turned out to be an effort of putting food on the table for attorneys approaching $50k. The patent had nearly run out and the technology we were deploying didn't exist when it was awarded - and the both the means that we were using and the process alterations we had accomplished were materially different, better, and in complete variance with the claims of their patent.

In addition to this investigation, we put off one of our customers who was interested in the product we had developed until such time that we received a final legal opinion of non-infringement. This customer engaged their own legal counsel and investigated the patent and our design and arrived at a similar conclusion at a similar cost.

Once we were confident of our position, we got back to the large consumer products company about our findings - and they said . . . and I quote:

"Mr. Brown, our legal department is considered a profit center here at (company name) and we take infringement on our patents very seriously. If you do not immediately cease and desist from selling this product into the market place, we will sue you out of existence and then we will go out to dinner and have drinks"​

At that point, my attorney basically said to hang it up and under no circumstances were we to market or sell this project until well after the patent expires. Ugghhhh . . . this didn't seem fair. I gave the news to our customer who went elsewhere for a machine retrofit, and the weeks of time I spent with the IP attorney now had put me further behind on other work that needed to be done, plus I was out nearly $50k, money was tight and I couldn't be distracted any longer. I closed the book on that chapter of my life and we tightened our belts and moved on.

Fast forward to 2016 . . .

Last week, I received a call from this same company about a product we developed but never actually sold. In fact, I received help from members of the Practical Machinist on figuring out how to model a feature of the product in SolidWorks. Several members helped me out and I got the mates working for an animated video in 2010. At this point, the large consumer products company has asked me to review a list of their patents (which are directly related to the product we developed in 2009 - 2010) . . . but the apparent patent application related to this product for the large consumer products company is in 2011.

Do I just let it slide? (we haven't had time to market or sell this new product as we have been too busy doing other things) . . . or do I press the matter with the Patent office and have the patents that we have been claimed to be infringing invalidated. (Which I have been told could be likely by a patent attorney who has reviewed the patent prosecution along with the posts on the Practical Machinist back in 2010).

I realize that a $10-$15 million small corporation taking on a multi-billion dollar corporation makes no sense at all and I really don't have time for this - but at the same time, it is completely against the reason for which patent law was created for this company to be prosecuting (persecuting) companies like mine because they are concerned that we enable their competitors with a technological advantage. Taking them on would be expensive and I am not sure what it would accomplish . . . but the principle of the thing bugs the hell out of me - but I also have 55 employees to think of. I don't care if I live in a trailer - I'll be fine . . . but my employees have kids / college loans / homes / etc. to pay for.

Do the business owners / managers among this forum have any advice? Should I just ignore and let it go? Push back? I need some perspective.

File a claim with the PTO for prior art to have their patent dismissed. Let them fight the govt. You may still need to IP lawyer, but would cost a lot less.


dee
;-D

 

[6061Mike]

Well, this is probably (almost certain) to be of no help, but a friend of a friend thing...

Company A says they have technology A patented. Company B says you are full of shit, your patent is full of holes. Company B wins on 'default' because A doesn't really 'know' what their patent entails...


SO, all I can say, is do your homework. You are right, big companies have big lawyers (and big budgets) to drag this out....

 

[makezee]

Im not a lawyer, and I'm not your lawyer. I suppose the questions you have to ask yourself (and legal rep)are, are you in fact infringing on the patents in question, what will it cost to defend your claims, what do you stand to benefit if you win, what do stand to lose if you lose.

Can you modify your product or process to not infringe on this patent for less money than it would take to defend your position? Can you patent your product or process independently of the current patents and void the infringement claims. Patents aren't always about the exact product or process, but can also include the industry or application they will be used in. DOnt have enough details really contribute on that front, but it maybe easier to look for away around them, rather than confront them directly.

To be honest i got a little lost in your explanation, and not sure what problem exactly you are facing. It sounds like you have developed something desirable to a customer/customers and a very large company is demanding you cease selling it? Am i correct or did i miss the point entirely?

-Adam

 

[Milland]

Motion, I'm not sure if this is of any help, but a Google search on "fight back against patent trolls" (no quotes) may come up with some useful references. Frankly, there should be a law that requires large companies acting against small ones to cover all costs in the event of a finding of no infringement, otherwise there's nothing to stop them from steamrolling small players as you've been.

Is the large company now asking you to aid them in determining what technologies you may be infringing on now (even though you came up with them first)? Or is this not infringement, but just to confirm you *don't* have competing prior art? I don't remember when "first to file" came into being, but that may make your prior tech moot if you didn't move to protect it with an application.

Or I'm just confused about your question. That's very likely...

 

[Bobw]

I'm a bit confused (as usual), but you put this whodickey out on this here website (made it public) in 2009-2010, and
then they patented it in 2011..

Seems kind of open and shut to me..

Is their legal department just fishing around looking for something to do to justify their existence?

They sound like a bunch of assholes.. Certainly the type of company I'd avoid at all costs if I knew who they were.

 

[Gordon B. Clarke]

I'm a bit confused (as usual), but you put this whodickey out on this here website (made it public) in 2009-2010, and
then they patented it in 2011..

Seems kind of open and shut to me..

Good point. If an idea is made public then it can't be patented afterwards. Try researching on what happened with the first watch using quartz technology when it was shown at an exhibition in Switzerland. They should have patented before they did that and today they'd have made Trump look like a pauper.

 

[dcsipo]

Motion, I'm not sure if this is of any help, but a Google search on "fight back against patent trolls" (no quotes) may come up with some useful references. Frankly, there should be a law that requires large companies acting against small ones to cover all costs in the event of a finding of no infringement, otherwise there's nothing to stop them from steamrolling small players as you've been.

Is the large company now asking you to aid them in determining what technologies you may be infringing on now (even though you came up with them first)? Or is this not infringement, but just to confirm you *don't* have competing prior art? I don't remember when "first to file" came into being, but that may make your prior tech moot if you didn't move to protect it with an application.

Or I'm just confused about your question. That's very likely...

check this.

The only thing you need verifiably published information

222-Citation of Prior Art and Written Statements

and

224-Time for Filing Prior Art or Section 31 Written Statements

dee
;-D

 

[dcsipo]

In 2002 - my company was accused of patent infringement by one of the largest consumer products companies on planet earth. We took it seriously and we investigated - not having seen anything like what we had done already in the market place. As it turns out, the claim was false, but the company making the claim insisted that we prove that we were not infringing. This turned out to be an effort of putting food on the table for attorneys approaching $50k. The patent had nearly run out and the technology we were deploying didn't exist when it was awarded - and the both the means that we were using and the process alterations we had accomplished were materially different, better, and in complete variance with the claims of their patent.

In addition to this investigation, we put off one of our customers who was interested in the product we had developed until such time that we received a final legal opinion of non-infringement. This customer engaged their own legal counsel and investigated the patent and our design and arrived at a similar conclusion at a similar cost.

Once we were confident of our position, we got back to the large consumer products company about our findings - and they said . . . and I quote:

"Mr. Brown, our legal department is considered a profit center here at (company name) and we take infringement on our patents very seriously. If you do not immediately cease and desist from selling this product into the market place, we will sue you out of existence and then we will go out to dinner and have drinks"​

At that point, my attorney basically said to hang it up and under no circumstances were we to market or sell this project until well after the patent expires. Ugghhhh . . . this didn't seem fair. I gave the news to our customer who went elsewhere for a machine retrofit, and the weeks of time I spent with the IP attorney now had put me further behind on other work that needed to be done, plus I was out nearly $50k, money was tight and I couldn't be distracted any longer. I closed the book on that chapter of my life and we tightened our belts and moved on.

Fast forward to 2016 . . .

Last week, I received a call from this same company about a product we developed but never actually sold. In fact, I received help from members of the Practical Machinist on figuring out how to model a feature of the product in SolidWorks. Several members helped me out and I got the mates working for an animated video in 2010. At this point, the large consumer products company has asked me to review a list of their patents (which are directly related to the product we developed in 2009 - 2010) . . . but the apparent patent application related to this product for the large consumer products company is in 2011.

Do I just let it slide? (we haven't had time to market or sell this new product as we have been too busy doing other things) . . . or do I press the matter with the Patent office and have the patents that we have been claimed to be infringing invalidated. (Which I have been told could be likely by a patent attorney who has reviewed the patent prosecution along with the posts on the Practical Machinist back in 2010).

I realize that a $10-$15 million small corporation taking on a multi-billion dollar corporation makes no sense at all and I really don't have time for this - but at the same time, it is completely against the reason for which patent law was created for this company to be prosecuting (persecuting) companies like mine because they are concerned that we enable their competitors with a technological advantage. Taking them on would be expensive and I am not sure what it would accomplish . . . but the principle of the thing bugs the hell out of me - but I also have 55 employees to think of. I don't care if I live in a trailer - I'll be fine . . . but my employees have kids / college loans / homes / etc. to pay for.

Do the business owners / managers among this forum have any advice? Should I just ignore and let it go? Push back? I need some perspective.

They cannot take you on the filing the prior art claim, but they could retaliate other ways, suing you for things where they feel that you encroached on their patents. Balancing act in a sense, if you feel you have a strong claim and it would cost them more than to let you leave it alone...etc. They surely being a ass about the thing. Also i am not certain that you are exposed to the patent owner till the claim is examined and found in your favor by the PTO.

dee
;-D

 

[Pattnmaker]

I wonder if the "court of popular opinion" is the court to have this heard in. Meet with your employees and tell them no layoffs coming despite what you might read in the paper.

Then write up a press release with all the facts maybe hire a journalist to write up the press release. How big bad consumer product company is acting as a patent troll and is out to screw little guy and may cause local layoffs and hurt local economy. Obviously have your lawyer read as well and have him tell you if this idea is a stupid idea in your situation and state. If lawyer says OK maybe send to big Corp marketing dept before sending to local paper.

Bad press is far more damaging for a consumer products company than a B2B company who has a handful of customers where you have a much closer relationship with your customers.

That threatening email could be very damaging to a large consumer products company especially in the current anti establishment atmosphere.

 

[hanermo]

This may be useful, or not...
I am not a lawyer or Your lawyer, but
did employ 18 different lawyers in different cases in the past, and
we own a law office with 10+ lawyers, and my wife is a lawyer, so , ...

1.
What do You want ?

2.
Mostly, when and if the facts of the matter are clear, very very simple and cheap legal manouvers are needed.
It is not relevant if the other side is exxon, bp, apple, whatever.
Likewise, if and when the facts of the matter are clearly / obviously on your side, it can be easy to win the first case.

But...
To win, mostly, your own participation will be needed, for (a lot of) hours.
The cost (presumed quality) of the lawyer will not affect your winning.
More expensive lawyers are not better.
No, they are not.

3.
Any case can be dragged on by one party, if they have money $$ to burn, and don´t care to spend it regardless.
This does not mean you have to spend lots of money. Mostly.
Unless they go into absurd overburn, and for example send briefs with 10.000 attesting examples / "facts" etc. Unlikely in a patent case.
They also need to pay for the same.

I won against no-possibility (labour) cases due to simple facts-based presentation.
I won against Fortune-100 companies due to my prep, mostly, not the lawyers.

4.
My suggestion.
Disagree.
Send a legal notice. Disagree/business letter/Cease & desist letter, whatever your lawyers advises, when your lawyers *know you wont litigate for now*.

In legal terms, if whenever, later, it needs to be fought out, the notice is enough.
Legally, you don´t need to go to court to disagree officially.
But you do need to disagree officially, to contest whatever they claim or may claim.

If they, whoever, wants to, they can sue You for whatever, weather You did it or not.
Thus, your letter is not likely to change this.


Consider:
Do you have the time ?
How important is this to You personally ?
Can You get Your costs legal or other, recovered ?
In some places this is dead easy. In some, not at all.

The Us is a special case.
Unlike all the rest of the world, in the us lawyers can/will sue, if you have insurance, because they can/may collect fat fees eventually, regardless.

In the rest of the world, fees are less, insurance wont pay $$$, and judges toss crap suits out, and there is no tort / silly high-$$$ awards for people or lawyers.
More justice, less lawyers, good in my opinion.

So, no opinion.
Reflections, examples, things to take into account.
Your choice.
I wish You good luck, as I consider You a gentleman of the old school.

 

[Limy Sami]

Bypass the lawyers and go straight to the company / owner of the patent and ask them straight ;- do they know what's being done in their name? .......who's f'n who about?.

Or arrange a face to face with the lawyer handling the claim, and take Big Vinny with you as your associate.

 

[WILLEO6709]

I think it comes down to how much you want to spend on principal. Win or lose their lawyers get paid..... so does the patent office. It will take YEARS. You call them up looking at your watch, they are looking at the fiscal calendar- for 2031.
Get a patent attorney. Have your patent attorney send a letter to their patent attorney and and see what their reply is.

 

[hanermo]

Avoiding crap lawsuits...

Further to this...

Some of the fully legal, allowed, practices You might do, imho.

1.
Hive off the IP off the company.
Know-how- skills, patents, procedures.
It is 99% likely You have not agreed in any financing (in a small biz) to custody of same.

Set up a separate subsidiary-of-subsidiary company for same.
Make sure a legal letter of assignment of rights to use, for now, to this existing company, as-is, exists.

2.
Split off assets.

3. Split off Your personal assets and or liabilities.
If-where some liabilities exist, acknowledge them fully, document them.

4.
Split off operating company from ownership of assets.
Bankers, and any notes on machinery, mostly wont and dont mind, when the assets go with the notes re:machinery or PPA (Plant Property Equipment).

5.
Split off personnel liabilities and contracts. At 50+ plus, there will be no IRS issues.
If you have pension funds or assets, move them to this entity.
Personnel will/should love this, as they get all the profits, and none of the risks.
Tell them why You do this.

End result.
It will be unprofitable for someone to legally attack You in a long-drawn-out expensive process, since the core assets cannot, practically, be attached.
Since You are doing this in an operating, profitable, company, and You are paying everyone vs skipping on debts, and your are an ongoing concern, there is no point to trying to overturn the processes, as they are legally valid.

None of the above is expensive, legally.
None is wrong, legally.
The only problems are that lots of all sorts of speculators and sleazebags have used similar stuff to skip on debts, pensions, benefits. Thus, to avoid image problems re_ workforce, communications imho are very important.

Especially in the US, as elsewhere most of these options are regulated differently (for small businesses).
But when Your are paying everyone, as now, there is zero problem.

I fully understand Your POV - and have shared it, many times.
More importantly...
Think of the problem from the POV of the hired guns, lawyers, at the other side.
If they cannot, ever, "get meat" ie $$$, and their success rate or probability is low ...
and they still must justify all attacks/actions to their bosses. And their heavy spend in $$$...
And they never go for actions where they will lose, in monetary terms, unless it´s a core brand issue.

E.g.
A client had an idea with "apple" products.
When the 300+ page legal brief arrived from apple (we received it), with cease & desist, the client shelved it.
The e.g. apple lawyers are on staff, they are not against any product as such or the company or You. They just work for salary.
Apple probably spent 300k on the brief ..
but it was right in that case imho, for "apple" as it was a core brand issue.

The product idea in this example was not anti-apple by any means .. but was not for apple fully controlling their ecosystem.
Thus they (apple) had to defend it, regardless.

---
I am not saying to fight this. Just trying to point out a POV.
Hope this helps.
Any practical help will be private, if You want.

 

[SND]

If I was sure that its "mine". If it has any decent value but I have no intent to go further. Either offer it to them for a price. OR... I'd see if a big player in China wants it, sell it to them for tons of cash and let big company test their patents against china, who likely really does not give a crap who they think they are or what patents they think they have.

If its not something of much value, and again no desire to do anything with it anytime soon, I probably wouldn't even give them a reply or waste any time looking at their "patents".

but I'm not always very diplomatic so maybe that's not good advice...

 

[motion guru]

The granola case described above is very similar to our situation in 2002. Open and shut case where we did not infringe, but we were going to be bled to death defending ourselves from a claim of infringement. We stopped the bleeding just shy of $50k by capitulating and giving in to their demands.

Today - the same company is seeking to get us to evaluate whether a product we are displaying is in fact infringing. A cursory review of their patent (I am not a patent examiner) shows that we are likely infringing on that patent. However, the video and product description on our website (and discussed on the PM 6+ years ago) predates the patent application by a year. We can absolutely prove that we publicly disclosed the product prior the application by months at a minimum.

A bit of googling yields ample evidence that this company does this on a regular basis. Perhaps a news story played out in the public forum would provide the right kind of leverage. This kind of patent trolling can cost a company well into 5 figures all triggered by a simple phone call and registered letter from an attorney with a company that has money to burn.

This is not a brand related issue - it is a technology issue where we figured out a way to allow a machine to operate at significantly higher production rates with a few simple changes. These changes made to a specific type of machine (that they buy from a machine OEM) are what they do not want their competitors to have.

The product is described well here -> http://www.practicalmachinist.com/vb/cad-cam/solidworks-barrel-cam-design-202095


I guess the question is - do we go forward with seeing if we can have their patent(s) invalidated or just ignore or ???

 

[JS]

Not a legal advice just a hypothetical...

Find someone well versed in Doing a certificate of dishonor or COD...

Then after it matures if they sue you have proof of dishonor by a third party usually a notary or lawyer. Not many of them know or are willing to do the process.
The last time , someone I know did this it took 60 or so phone calls to find a lawyer who was well versed in the process...

Commercial law it's either honor or dishoner.
Non response, argue = dishonor
Agree, conditional acceptance = honor

Or let the patent office deal with them, but make sure your paperwork is in order...

 

[gbent]

Before you proceed, look up the story about Robert Kearns. Mr. Kearns patented the intermittent windshield wiper starting in 1964. He fought the automakers for decades before he received any money at all.

Mr. Kearns was shafted, no doubt about it. But he allowed the infringement to so totally consume his life it drove away all his friends and family.

You may well prevail in the end. But what personal cost are you willing to pay?

 

[Limy Sami]

Or turn the tables, getting out your cheque book you ask ''Okay, how much do you want to settle this?''