Colleen Chien on "doing nothing"
Before IPBiz could write a response to Colleen Chien's post The Best Way to Fight a Patent Demand May Be to Do Nothing, PatentlyO had already criticized the Chien work.
The Chien post begins:
The best way to deal with a patent demand may be to take a deep breath—and then do nothing.
The prospect of a patent lawsuit can be terrifying for a startup. Entrepreneurs often imagine that legal action will empty company coffers, throw the business out of joint or scuttle a round of financing.
Out of that research, a surprising finding emerges: More than a fifth of survey responders resolved the threat by “doing nothing.” This means, for example, looking at the claim, determining a license isn’t needed—and then filing the letter away, rather than responding.
**As a first point, the "doing nothing" strategy has been suggested for some time, so that idea is not exactly new to people following the issue.
For example, Foley & Lardners 10th Annual IP Conference, held more than one year ago on Sept. 19, 2014, had a session
Emerging and evolving strategies to mitigate the impact of abusive tactics by NPEs, including:
Implications of recent Supreme Court decisions
Incorporating the potential impact of legislative proceedings
Effective use of joint defense groups; addressing indemnification issues
Advanced pre-litigation and litigation strategies
Kevin Cranman, General Counsel, Ericsson Television Inc.
Karen Kaiser, Chief Intellectual Property Counsel, Ingredion Inc.
Matthew Miller, Deputy General Counsel, Groupon, Inc.
Michael Shpizner, Vice President and General Counsel, Fujitsu America, Inc.
wherein, if LBE remembers correctly, Mr. Miller pointed to the benefits of ignoring
threatening letters from NPEs (aka PAEs).
**As a second point, the Chien piece did not point out that a strategy of a patentee might be to seek an injunction, which can be far more threatening than money damages. Chien wrote:
Other times, patent holders aren’t looking for a quick settlement but seek high damages from a jury. In those cases, they will be more willing to pursue a claim. One approach is to plead poverty. There is evidence that patent trolls, like other patent holders seeking settlements, target firms with cash on hand. A company might want to share financial information confidentially to convince a troll it isn’t worth its time.
The threat of an injunction can be used to dissuade smaller entities from "doing nothing."
**The PatentlyO piece begins:
Professor Colleen Chien has published an unfortunate new Wall Street Journal essay titled “The Best Way to Fight a Patent Demand May Be to Do Nothing.” Chien’s factual bases appears spot-on: a large and increasing percentage of companies are refusing to even respond to patentee correspondence. The unfortunate aspect of the Chien’s essay is her suggestion that this really may be “the best way to deal with a patent demand.”
An unfortunate aspect of Chien’s suggested triage system is that it does not focus on merits – is the patent actually being infringed; is the patent valid? Rather, the focus is simply whether the patentee has the wherewithal and propensity to sue and whether the triaging-company can slide under the radar
BUT, recall Chien's text:
More than a fifth of survey responders resolved the threat by “doing nothing.” This means, for example, looking at the claim, determining a license isn’t needed—and then filing the letter away, rather than responding.
Of course, as to both PatentlyO and Chien, the determination of whether or not there is infringement (need for a license) is not easy to answer. Some NPR litigation turns on infringement, not on the underlying validity, of the claims of the NPE. Recall Selden's suit against Henry Ford. Selden's claims were NOT invalidated.
**Separately on Chien, see