Obtaining and maintaining dead weight patents doom a patent portfolio to failure

Unfortunately, the issuance of a patent simply does not guarantee that the underlying innovation is of any kind of foundational importance, or that the patent and claims are written in ways that suggest the patented innovation is valuable. Sure, patents are statutorily presumed to be valid, but the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) does not presume patents to be valid during post grant proceedings, so if you have a commercially viable patent that is being infringed you simply cannot assume it will be presumed to be valid despite what the statute says.

For the time being at least this means that patent owners must go farther than ever before to ensure that the rights they are obtaining are going to be able to stand up to challenge, both challenges in the federal district court that afford the patent owner property right protections (and where patents will be presumed valid) and challenges at the PTAB that are one-sided against the patent owner and considered to be fundamentally unfair by many (and where patents will not be presumed to be valid).

Anyone who reads press releases or financial news can attest to the fact that companies, both big and small, repeatedly talk of developing a patent strategy for the twenty-first century that will enable them to compete in the global market place and take advantage of existing synergies and ongoing alliances in a manner that will create shareholder value and bring new technologies to market.

What does that even mean? Truthfully, this seems to be code for “we don’t really have a clue but want to make it sound like we know what we are doing.” This kind of PR patent strategy, which does not seem to appreciate the divergent treatment patents will face depending upon the venue of use, is doomed to fail.

Perhaps patents as a PR strategy is the best many companies can do because the very nature of preparing a patent strategy is something that requires both understanding of the patent laws, a healthy understanding of the business realities of evolving technologies and a sophisticated understanding of the core technology at issue and available business opportunities. In order to plot a course calculated to succeed company leaders need to be cognizant of the actual business realities facing the company, not the talking points of lobbyists or those who write SEC filings or those who get paid to write press releases.  Indeed, a comprehensive understanding of your own research and development, as well as where the industry is heading and what market opportunities are available today and will likely be available tomorrow and next year and three years from now, is crucial when attempting to create the patent strategy that has any chance of succeeding.

[Varsity-1]

Getting whatever you can sneak by a patent examiner probably never was a wise strategy, although it is true that there was a time in the industry when patents were viewed as a numbers game. Once upon a time the patent business viewed patent acquisition, whether by organic growth or outside purchase, as little more than the corporate version of global thermonuclear war. If you want to succeed, the thinking went, you needed to have more warheads than your enemies. The same was true in the patent world. If you wanted to succeed in the rough and tumble high-tech world you needed to have a bigger patent portfolio than your competitors. At times – many times – the quality of those patent assets were at best secondary if not completely irrelevant.

It is a bit of an exaggeration to say that the size of your patent portfolio is completely irrelevant, but today it is worse than useless to have a portfolio full of patents that are low quality. Not only is there a growing cost associated with obtaining patents in the first place, but there is also a growing cost of keeping patents alive. The seldom told story in the popular press is that many patents do not enjoy the full patent term they are otherwise capable of having because to enjoy the full patent term three separate and increasing maintenance fee payments must be made to keep the patent alive for its full term. For example, maintenance fees are due at 3.5, 7.5 and 11.5 years after a patent has issued. For a large entity these fees are $1,600 for the first maintenance fee payment, $3,600 for the second, and $7,400 for the third.

If you are an entity that acquires many hundreds or thousands of patents a year you simply cannot afford the financial burden of keeping low quality assets alive that have no chance of being used either defensively, offensively, or as part of a licensing business model. If you get patent claims that won’t stand the test of time all you are doing is wasting money paying for the issuance of meaningless rights, and then wasting more money to maintain a patent that is nothing more than a dead weight on a patent portfolio. If you are getting and maintaining a patent portfolio full of dead weight patents that have no value or that are likely invalid you are doomed to fail!

This reality, however inconvenient, drives a tangible need for business professionals in high-tech companies to become more knowledgeable about patent law and patent practice than ever before. Without knowing and understanding the rapidly evolving patent landscape it is impossible for proper business decisions to be made, financial resources will be wasted and opportunities missed.

Business professionals, and patent professionals charged with managing outside patent prosecution firms, must become more proactive in order to ensure that a proper foundation for patent rights is being laid and the rights being obtained are not unnecessarily encumbered by careless drafting. It also means that at times hard decisions will need to be made about the continued viability of a patent application, and perhaps filing that next Request for Continued Examination (RCE) doesn’t make a lot of sense. If a patent application is that important you may need to actually file an appeal. Spending good money after bad in a foolish attempt to convince a patent examiner that has made up his or her mind is just as budget reckless as maintaining low quality patents.

Obviously, there are a lot of considerations that go into any prosecution and maintenance strategy, and perhaps stalling and waiting for a better climate is the best strategy, such as in certain software related fields or when dealing with gene patents, for example. No one size fits all strategy can be employed any longer by those who want to achieve good, strong patent rights. This undeniable reality makes it all the more important for a proactive approach by well-informed and knowledgeable business people who continue to have one eye on the prize and another eye on the budget.