In a piece she wrote for the Wall Street Journal, Professor Colleen Chien notes that many companies resolve threats of patent demands by simply not responding. In “The Best Way to Fight a Patent Demand May Be to Do Nothing,” Professor Chien shares her findings from surveying hundreds of venture capitalists, entrepreneurs, legal experts, and service providers who have been approached with patent demands.
More than a fifth of the survey responders did not engage with the patent assertions. The companies looked at the claim, determined a license wasn’t needed, and then filed the letter away without responding.
Below are some excerpts from Professor Chien’s article, “The Best Way to Fight a Patent Demand May Be to Do Nothing.”
Why Some Patent Demands Are Made
Often, the entities that bring suits are doing fishing expeditions, asserting the same patent against many defendants so that they achieve economies of scale.
The same logic holds for campaigns that target entire industries because they use someone else’s technology, often bought off the shelf. Forty percent of the companies I surveyed reported receiving a patent demand for their use of another’s technology, such as Wi-Fi.
Reason to ‘Stay Under the Radar’
Research suggests that the harms from patent demands often flow not from the fact of being sued, but from being in a drawn-out, expensive dispute. Stories of small companies winning in the courtroom, but spending so much time and money on a case that they damage their business, are unfortunately commonplace.
Cautionary Note
Sometimes a larger competitor, or “patent bully,” will go after a small company, trying to achieve a strategic outcome. Although motives vary, incumbents have been known to file lawsuits against startups to force merger or licensing agreements, disrupt the startup’s business or squash the competition. These attacks aren’t likely to go away if ignored.
Read the full article: “The Best Way to Fight a Patent Demand May Be to Do Nothing.”
Read more of Professor Chien’s research on patent assertion entities and startups:
Colleen Chien is an associate professor at Santa Clara University School of Law and and is nationally known for her research and publications surrounding domestic and international patent law and policy issues. She has testified before Congress, the Department of Justice, the Federal Trade Commission, and the US Patent and Trademark Office on patent issues, and serves as a consultant to the White House Office of Science and Technology Policy. From 2013-2015 she served as White House Senior Advisor, Intellectual Property and Innovation, working on a broad range of patent, copyright, technology transfer, open innovation, educational innovation, and other issues.