Material adapted from Patent Offense: 7 Steps to a Safe, Secure Patent Portfolio by: Craige Thompson.
The Crisis In Patent Quality
Failure to apply Litigation Quality Patents (LQP) principles have led patent owners to a place where I see a crisis in patent quality that exacerbates the pressure on everyone’s budgets for patent portfolios. I say that because the perceived value of a patent is decreasing. There are far too many cases that I see being transferred to my firm that have been improperly written from the very first step. The most important step.
The step is missed with such frequency that I have to say something because of the tremendous waste that it leads to. That waste is represented by countless patents of low-quality and therefore low value to the owners. They are low-value because there is no way to monetize the value of them beyond the level of nuisance suit.
Let’s get it out into the open and have an honest discussion. I know this may be controversial, but in my opinion great amounts of money are being spent on very low-quality patents that are never monetized, and never can be monetized. Such patents would be found invalid by the ever increasingly popular inter partes review at the Patent Office.
The consequences of a misallocated overinvestment in a bad, unworkable patent application are compelling. The numbers are stunning, and the stakes are very high.
Inter Partes Review
To illustrate this, I recently did a quick survey of inter partes review outcomes. A major milestone is whether the USPTO accepts the inter partes review or rejects it.
In one 30-day period I reviewed last year, the PTO accepted 24 out of 24 timely filed inter partes reviews on utility patents for trial. Only two design patents and two late-filed requests were rejected. The expected outcome of these 24 cases is likely to be that a strong majority of claims will be canceled or amended to a narrower version.
Although this is a preliminary indication, it portends a wave in patent invalidations—and that is just the tip of the iceberg in terms of the mass of patents currently in force. Many of the weakest patents would not even be brought to litigation so that accused parties would file the inter partes review.
Keep in mind, the inter partes review is only based on a likelihood that the claims are invalid over prior art publications. Other defenses are not eligible for inter partes review. With this high of an acceptance rate, it is consistent with my long-held belief that most patent claims are highly vulnerable to an invalidity attack.
While not meaning to brag, I have yet to be asked to kill a patent that I have not been able to kill or design around.
I do believe there are many solid patents out there and we applaud those that do survive the acid test of litigation. But sadly, many mistakes are made that could be avoided if the proper information is considered and accurate thinking is provided to the PPM as pre-requisite input to the application draft.
7 Step Strategic Patent Assessment
In our process, the 7 Step Strategic Patent Assessment, we routinely assess and apply a range of essential concepts. At a high level, these concepts fall in two key domains:
1.Identifying a Point of Novelty (PON) that is patentable; and,
2.Assessing how much economic value we can expect from protecting the identified Point of Novelty.
In other words, what “exactly” do we think is patentable, and if we could get a patent on that, will it make you enough money to get a sufficient return on your investment (ROI)?
You might start to notice how the Point of Novelty is the starting and ending point. The Point of Novelty should precede the application because it is on center stage at the end of the game when the litigation starts or when the claims are subjected to intense scrutiny under inter partes review.
Only a tiny percentage of patents are actually litigated. I believe that is partly explained by the pervasive low-quality problem that leads most patents to sit on the shelf until they lapse or expire. However, I approach every patent as if it is going to be monetized in some form, and that my client would rather get litigation patent assets than junk patents.