The Prior Art

Lawyers getting patents: What should the rules be?

I've written several times about patent lawyers who acquire and assert their own patents. Now I'm going to use the blog to ask for folks' opinions and thoughts on this issue, and what the policies should be at law firms, and beyond.

In my last post, I wrote about a court case involving a law firm that has had rules in their contracts since 1999 regarding patent experts getting or asserting their own patents. I've also written about Scott Harris, a former Fish & Richardson attorney who became embroiled in a serious conflict with his firm after getting his own patents which were then sold and used to sue Google, a firm client, and several other IP lawyers filing their own patent lawsuits.

It's clear there are widely varying policies (or lack thereof) around this issue. It's possible that some law firms have instituted policies recently, perhaps in direct response to the Harris case.

Need to file a patent lawsuit? Just cut & paste. Carefully.

Caddell & Chapman is a Texas law firm with a very nice website.

But their most recent complaint is less impressive. Earlier this week, they filed suit in Wisconsin against Northwest Airlines on behalf of patent-holding company WNS Holdings, LLC, and Mark Eberwine. After the paragraph explaining how they will suffer "irreparable injury" if the judge doesn't stop this outrage Northwest has committed, they continue walking down the well-trodden path of allegations to note that "UPS' infringement of each of Plaintiffs' Patents is willful." (PDF)

Wait... UPS? Oh, right. That would be United Parcel Service, the company they sued two weeks earlier over (mostly) the same patents. Well, this stuff all looks the same after a while. Whoops.

Saw this one on IPLaw360. (very expensive registration required)
Like I said, kids... don't bury the lede. Makes my job too easy.
 

"Patent Trolls" — with them or against them?

Folks are choosing sides—first Howrey LLP (against), and now a veteran IP executive (against). Hat tip to Joff WIld's IAM blog for this one.

Dan McCurdy's new company, PatentFreedom, is an online community for companies to get and share intelligence about the non-practicing entities some critics call “patent trolls.” Membership is limited to “operating companies” with over $100 million of revenue that’s not from licensing, enforcing, or selling patents or other intellectual property. (Such revenue sometimes comes from the sale of “products,” which can be found on the shelves of most stores not located in North Korea.)

“Patent trolls know a lot about operating companies,” McCurdy told me today. Their targets, conversely, frequently know nothing at all. “Are they the only company being approached, or one of a thousand? Who funds them? How well funded they are?”

PatentFreedom will fill that void both with its own research and by creating a community where operating companies can exchange information, anonymously, if they desire.

But in order to found the new company, McCurdy will have to split from ThinkFire, the company he co-founded with Intellectual Ventures chieftain Nathan Myhrvold in 2001. The reason? Worries about conflicts of interest.  ThinkFire has an IP consulting and brokerage practice, as well as a group that provides licensing and litigation support to companies asserting patents, many on a contingency basis. It also helps companies defend against patent-infringement claims, billing hourly, like a law firm.

Also like most big law firms, ThinkFire plays both patent offense and patent defense. But PatentFreedom’s "fight-them-trolls" business model was too much; shortly before the April 14 launch, ThinkFire’s board decided it couldn’t play both sides on this one, and decided it will spin off  PatentFreedom as a separate company. McCurdy will officially move over to PatentFreedom in July.

Says McCurdy: “ThinkFire made the decision that it was not in its clients’ best interest to constrain the kind of advice that ThinkFire might be able to give to them, simply to meet the needs of PatentFreedom.”

Fear of conflicts, and perhaps hope for a competitive edge, already caused law firm Howrey LLP to actually agitate against so-called “patent trolls,” like the one pictured above, in its ads, as The Recorder reported in March. (free reg. required)

While we talked, McCurdy tapped into his database from his home office in Pennsylvania, browsing through electronic dossiers on—get ready—94 non-practicing entities, 249 affiliates, and more than 4,700 patents they’re known to hold. (Way more than the shuttered Patent Troll Tracker!) But McCurdy says he has no grudge against NPE’s; he’d just rather beat ‘em than join ‘em.

“When I walk into a cocktail party, I feel much better about myself saying that what I do is help companies defend themselves against NPE’s, or ‘patent trolls,’ than saying ‘I attack companies with patents I bought,’” he says. “I’m not saying that NPE’s are wrong… they have every right to pursue what they’re pursuing.” But targeted companies deserve tools that “at least somewhat equalize the playing field.”

So far close to 10 companies have joined, all “household names,” says McCurdy, and all confidential. He expects up to 20 by the time he officially leaves ThinkFire in July, and 50 members by year’s end.

Annual membership starts at $50,000. (Might make you feel like a subscription to IP Law & Business is a real bargain.)

Will the IP bar split over 'patent trolls?'

File under interesting timing: the lawsuit against Troll Tracker was reported the same day my colleague Zusha Elinson reports on Howrey's new advertisement urging clients not to support law firms that litigate for "patent trolls," which they call a "scourge on legitimate businesses everywhere." (article is here, free registration required)

I've had off-the-record conversations with folks at various firms about their opinions on taking work for patent-holding companies. Some say their high-tech clients are pushing them to not do such work; others have said there's no such pressure.

Definitely worth reading. I doubt IP will ever be like product liability or personal injury litigation, since (most) big companies that defend against lots of little-guy patent suits still think of themselves as potential plaintiffs. But the issue looms: will the big firms continue to be able to "work both sides of the street," as Henry Bunsow puts it? Or are we seeing the development of a new, more clearly  defined plaintiffs' and defense bar? There's certainly a fissure of tension, and Howrey's ad isn't shy about sticking itself in there.