Issue link: http://read.dmtmag.com/i/81895
Be Careful for What You Wish E LEGAL LINE veryone either knows from bitter experience or was told in childhood to be very careful about what you wish for…and this caution- ary statement never holds more weight than in litigation. Th is was brought home recently in a rather painful patent lawsuit. Th e result was a completely unintended con- sequence that was not, but should have been, fully envisioned by the company that fi led the lawsuit. Th e company that started the fi ght was a victim of both short-sight- edness and a less-than-fi rm grasp on reality. In this situation, a successful company had developed a product line that consisted of drilling tools that made '"one-pass" holes in any number of hydraulic parts, so that the standard o-ring fi tting could be used. As commonly known, any industry that uses hydraulic hoses and fi ttings adheres to a set of standards for fi ttings and ports, so that a hose from Dubai will fi t a loader in Davenport. Since the company had enjoyed some good initial feed- back on its tools, it took the steps to patent the drilling tool con- cepts, hoping that it could create a competitive advantage with a patent. Th is in itself did not cause a problem initially, and the patent application sailed through the Patent Offi ce with no major issues. Th e patent was issued with nomi- nal changes from the application. Soon aſt er the patent was issued, the inevitable happened. Th e company found that a com- petitor was making a nearly iden- tical tool line and promptly sent the competitor a "cease and desist" IDA UNIVERSAL September-October 2012 letter. Th e competitor ignored the letter, since it had been making and selling its tool line for several years before the patent applica- tion was even fi led. As expected, the patent holder saddled up its lawyers and fi led a federal lawsuit, claiming that the competitor was infringing on the patent. So far so good. However, the competitor - a signifi cantly smaller company - decided to fi ght, since it had already designed and made its line of tools for several years, well before the patent was issued or even applied for. As is usual in federal court lawsuits, the two companies were in front of the judge to explain their positions and negotiate the timetable and processes of the lawsuit. At this point, the pat- ent holder had one of those "oh, sh…t" moments, as the court sug- gested that the suit might not be that viable due to the prior sales by the "target" company. A short lesson in patent law is needed here. In any patent process in a country with decent patent laws, the patent offi ce is a blank slate, and the entire process depends on the inventor applying for the patent to completely and candidly disclose other relevant patents - anything in the com- mercial world or industry that might be important, all focused on what is called "prior art." Th is means that to obtain a legitimate and enforceable patent, an inven- tor must come up with something that is truly new and unique. Th ere are no patents for rehash- ing existing patented inventions, inventions that have been made and sold in general commerce, or Robert W. McIntyre IDA Association Legal Counsel "disguised" combinations of prior patents or inventions. In this case, the inventors should have known about the competitor's tool line and told the patent offi ce in the application process. But that most certainly would have done nothing more than generate a concise and to- the-point response from the pat- ent offi ce – "claims rejected" -so instead, nothing was said or done. Although this strategy might have seemed attractive at the time, it was nothing more than lighting the fuse on the bomb...and hoping that any future target for patent infringement lawsuits would fail to look into the matter further and settle quickly and quietly. Th is type of litigation is a common strategy in enforcing a patent: fi nd a possibly weak target, strike hard and fast, and get a settlement that includes a "confi rmation" of the validity of the patent. Knock off a few of these small fries, and pretty soon you have a string of court orders "legitimizing" your patent. Th en, if and when you turn your guns on a harder target, you have prec- edents to wave in front of a judge in that case. In this situation, there was a completely unintended conse- Continued on page 56 23