What Are the Patent Risks?

Minimizing patent risk is good for the bottom line.

Patent cases are extraordinarily expensive to litigate; patent damages can be enough to bankrupt even large companies. Fortunately, this risk can be anticipated and minimized.

Infringement

The largest risk associated with patents is accidental infringement of another patent. Infringement means that another company is unlawfully practicing the invention of another without permission.

Strategies

Two strategies to minimize the risk associated with patent litigation are (1) conducting a rigorous prior art search before filing your own patents, and (2) obtaining a license to use another invention.

Problem area: Electric Vehicles

There is much prior art in the field of hybrid and electric vehicles. This is a concern because the number of patent applications in this area has skyrocketed. While much of the prior art dates to the 1970's (and is in public domain), there are many protected advances that have been patented.

Problem area: Linux

Since open source software is often written in Linux, manufacturers who use such software are vulnerable. The Open Source Risk Management (OSRM) recently examined the Linux kernel "for patent violations that patent holders could cite in lawsuits against distributors." Unsurprisingly, the report found 283 patents that might come into play.

Relative risk

Given the extraordinary cost of litigation, the risk to small and medium-sized companies who market infringing devices is much smaller than the risk to large companies; no one wants to launch expensive litigation with the prospect of minimal returns. Large companies should implement aggressive risk-management policies, which include vigilant prior art reviews.

References

• Electric and Hybrid Vehicles: Patent Risks and Opportunities
• Linux and Patent Risks
• Pitfalls of Joint Ownership
• New York Times: Boston Scientific to Pay $1.7 Billion to Settle Patent Suits