Innovation Spotlight: Patent Litigation Down, Again; So Now What?
by: Tom Hochstatter, President
Most all of the patent litigation data folks have posted or summarized their annual litigation statistics and no surprise 2019 was another down year across the board for both District Court and the Patent Trial and Appeal Board (PTAB). I provided a quarterly brief up and through Q3 here last October.
Source: Unified Patents
As I mused in my October update blog post I continue to wonder what’s next for 2020, selfishly for Techson of course, but equally important for patent holders and patent professionals. With all the stats down, what are folks doing with their “extra capacity? I render a couple of thoughts:
1) Patent holders are ready to sell or monetize
We have seen an exponential increase in demand for monetization services and zeal of large /r patent holders’ openness to sell or license their portfolios. Not statistically reliable, but we are seeing a fairly even split between veteran sellers and first time licensor prospects. And the chasm of capabilities among the experienced and first-timers is vast. But in that disparity rings opportunity for Techson and other IP professionals.
The important distinction among us - being proactive.
There is much to counsel on with regards to how best to monetize and license portfolios, but equally important is advising on when your client is hit with an infringement notice.
If you are current counsel for operating companies (either “prep & proc” or litigation counsel) pre-suit is the time to counsel your clients on what might be coming their way in the near future. No need for “bomb threat” scare tactics. Just make plans now to bring not only the GC’s office up to speed, but the C-Suite and General Managers that run the largest revenue lines for the company too. Patent litigation panic is usually mitigated when you have a well informed client ahead of the first notice letter.
The great news is this kind of dialog should open other opportunities for you within the Innovation Supply Chain that lead to more engagement and client billing. Nothing wrong with that.
2) Patent professionals, namely IP attorneys need to get strategic, now
Techson launched its IP Advisory practice in August under the steady and seasoned hand of Dan Spaeth. Our strategy engagements are increasing at a rapid rate. We are also busy creating educational materials and CLEs for our current patent research (law firm) clients helping them make the transition from reactive to proactive engagers.
Here is an interesting summary from Norton Rose Fulbright’s 2019 Litigation Trends Annual Survey about corporations and what’s on their (legal) mind (hint: IP is high on their list of concerns):
“Although labor and contract disputes are the most numerous by far, organizations find other types of disputes more concerning relative to their occurrence. The scatter chart shows a group of dispute types falling above the line where the level of concern outweighs the occurrence. These include cyber, antitrust, regulation and class actions. IP stands out as one of the more common types of dispute that is very concerning.”
Bottom line is whether or not your clients have vocalized concern about IP litigation yet, it is clearly on their minds. What are you doing to prepare them for that eventual call? Or, what are you doing to help them become the aggressor and defend their intellectual property against the infringers?
In either case, this is much more than a legal conversation; it is a business strategy conversation including many individuals and departments you and your firm may never have engaged.
3) Operating companies better get educated on patent litigation and infringement analysis/defense
With 1) and 2) growing with such force this year more operating companies are going to be accused of patent infringement. More important, many of these on the wrong side of the “v” will be first time defendants. This will not be the time for the Litigation 101: What To Do When You’ve Been Sued seminar. That should have been done years ago - and refreshed annually around your client’s major operating divisions. A good corporate partners or consultant would have anticipated this kind of activity and prepared their client for in advance.
The hidden opportunity in this education will absolutely lead to addition work for you and your firm. In preparing for a defense you are likely to uncover other areas within the Innovation Supply Chain that also may need addressing - increased prosecution, better patent maintenance, identifying patents for their own monetization or exit from your client’s portfolio.
There is simply no good reason not to launch these engagements right now. What I can tell you is that our highest billing law firm partners are using this strategy to become a trusted partner in their client’s organization. There is little chance they will be ousted when a crisis hits. Quite the opposite, in fact.
As I mention herein, IP strategy and consulting is and will forever be a Techson calling card. Sitting around waiting for the panic “we’ve been sued for infringement” call or idling until a new Invention Disclosure hits your email, or worse not proactively creating a tangible ROI on Innovation will be a sure client loss for you and your firm.
Too many others will have set the foundation and just beaten you to the punch. Good news: we’d like to work with you - whether you are a large patent holder or the law firm representing one. We have an extremely talented and experienced team of IP Advisors ready to help.
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