Maximize Your Patent Portfolio Using Helferich-Style Claims

Patent owners often obtain patents to protect products, as well as complementary products or use cases associated with those products. However, when selling or licensing the patented products, a patent owner may inadvertently extinguish potential revenue streams associated with the complementary use cases due to the doctrine of patent exhaustion. Patent exhaustion follows the basic idea that if a company sells or licenses a patented product to a buyer, the company cannot sue the buyer (or a third party that the buyer provides the patented product to under the license) for patent infringement for using the product. Patent owners should take care when preparing and licensing patents to ensure that infringement claims for complementary products or use cases associated with patented products are not exhausted by the sale or licensing of the patented products, as shown by the Federal Circuit case of Helferich Patent Licensing v. New York Times, 778 F.3D 1293 (Fed. Cir. 2015).

The Helferich Example

In Helferich, the patent owner obtained multiple patents related to mobile device handsets. A first set of patents covered an apparatus and method of receiving and/or requesting certain content by a handset (the “handset patents”). A second set of patents covered a system and method of storing and updating the content and providing it to handsets (the “content patents”). The patent owner licensed the handset patents to almost all handset manufacturers in the country. Later, the patent owner sued multiple content providers for infringement of the content patents. The content providers argued that the infringement claim was exhausted by the licensing of the handset patents on the premise that the content patents required use of a licensed handset. As the handset patents had already been licensed by the patent owner (exhausting claims related to the handset patents), the content providers argued that the complementary content patents were also exhausted by the license.

The Federal Circuit disagreed, pointing to the Supreme Court case of Morgan Envelope Co. v. Albany Paper Co., which held that the patent exhaustion doctrine does not apply “in circumstances where the alleged infringement involved distinct, though related, validly patented inventions.”  Here, the Federal Circuit held that the claims of the content patents were separate and patentably distinct from the claims of the handset patents, even if the content patents were designed to be used with the handsets covered by the handset patents. For example, the Court compared the claims of the handset patents to the claims of the content patents and found that there were no double patenting issues. Additionally, the Court emphasized that, although the two sets of patents shared a common specification, the USPTO issued numerous restriction requirements. The Court found that the absence of double patenting issues and the presence of the restriction requirements “tends to confirm the independence or distinctiveness of the separated claims.” Moreover, the Court reasoned the patent owner had taken numerous steps to specify that the handset patents were licensed and the content patents were not. For instance, the licenses of the handset patents included a disclaimer that indicated that the patent portfolio contains many claims that would not be infringed by a handset manufacturer because those claims “expressly recite material additional operations that are carried out (or material additional structure that is added) by Third Parties, including . . . Content Provider[s] . . . and/or are not substantially embodied in the products, services, or methods within the scope of the Licensed Fields.” The licenses generally disclaimed any grant of rights to such content providers and reserved the patent owner’s enforcement rights against them. Therefore, the Court concluded that, even though the handset patents were complementary to the content patents, the licensing of one did not exhaust the other.

Maximize Revenue—Carefully

In light of Helferich, patent owners should take care to prepare and license patents for products and complementary products or use cases to maximize potential revenue streams from a patent portfolio. Here are a few things to consider:

• When preparing the patent applications, ensure that the claims covering the product and the claims covering the complementary product/use case are separate and distinct such that the claims are independently patentable (if possible). For example, claims should be prepared with each claim set having at least one patentably distinct feature, following the standards of the double patenting rules. In some cases, claims can be prepared from different perspectives (or different devices), emphasizing the distinct features from each perspective. Using the handset example from Helferich, the handset patents covered requesting content by the handset device, whereas the content patents covered providing content to a handset (not necessarily the inventive handset covered by the handset patents).
• Consider the market and revenue streams of the product early on. Patent applications should be filed directed to each type of market participant or revenue stream identified.
• Identify patentable distinctions between the types of claims directed to different market participants/revenue streams. Draft different claim sets directed to the different market participants/revenue streams, focusing on the patentable distinctions.
• Draft licenses narrowly in a way that makes it clear that only certain patents are licensed for certain participants and activities. Consider including a disclaimer that identifies the participants, products, services, and/or patents that are not licensed.

In summary, patent owners should consider filing patent applications for complementary products or use cases whenever possible to maximize the revenue stream from a patent portfolio. However, in doing so, the patent owner should be careful when preparing and when licensing the patents to make sure that the licensing of one or more patents does not exhaust the rights of complementary patents.