August 4, 2016
Patent ownership is a very important subject, and easy to overlook. IP Frontline recently posted a summary of common pitfalls to help outline road blocks in assignments. A company can only enforce a patent that is assigned to it, and even managing ownership within one’s own company can be tricky. Patents will be assigned to inventors by default and will, therefore, need reassigning to the company, and clauses need to be in place in employment contracts to ensure companies own the IP via this mechanism. They also need to ensure that any IP acquired via e.g. M&A activity is assigned to the correct entity in the case of enforcement, as patents can only be enforced by the owner or those with a license to enforce.
Additionally, fragmentation of a patent portfolio among subsidiaries can make tracking competitors’ IP a tough task, a fact exploited by some NPEs who scatter their patents amongst a vast number of shell companies to make it difficult to assess what they own, so it is important to have a complete list of shells/subsidiaries of an entity when assessing competitors portfolios in order to avoid missing any patents, showing that both enforcement and defensive behaviour require a full understanding of patent ownership to avoid pitfalls.
Last week, Blackberry startled attendees at their summit by not announcing a new device. According to a report in The Register, the once dominant smartphone manufacturer is looking to follow the model of another former leader in mobile devices, Nokia. Nokia moved away from device manufacturing and instead licensed other companies to manufacture under their banner, and Blackberry making a similar move, with an externally manufactured BlackBerry device reportedly showing up in regulatory reports. This would mean the manufacturer has a license to all the IP associated with the Blackberry brand and software in the device, in order to manufacture and sell it. This goes to show that even when the business itself looks like it is going downhill, the IP can still remain of significant value to a company, and the option of licensing that IP can unlock a new revenue stream.
As we published recently, the last few years have been tough for NPEs, with Alice-based invalidations hitting their software patents and added legislative changes in the US hitting them hard. It would appear that 2016 is continuing where that left off, with IAM reporting that the number of cases filed in the first half of 2016 was down considerably compared to the first half of 2015. At the time, it was thought that perhaps this was due to a rush in filings in the lead up to December 2015, when changes were made to pleading standards in order to demand a higher standard of evidence. That was somewhat true, with Q2 picking up to the “normal” level of cases filed per quarter. However, a further analysis has revealed that operating companies’ cases filings have been comparable with the equivalent period last year, which contrasts those of NPEs, whose case filings were only at 2/3 of the level they were at in the first half of last year. For the time being, the US looks set to become an increasingly hostile environment to NPEs, and Europe may need to watch out when the Unitary Patent comes into effect.