Change In U.S. Patent Requirements: Bane or Benefit To Law Firm Business?

Although the law doesn’t change until 2013, firms should consider rewriting their business strategy now.

In March, the U.S. will reconcile its previous patent system with the first-to-file system practiced by the rest of the world. Entrepreneurs can say goodbye to the first-to-invent method of protecting their intellectual property, and hello to the Leahy-Smith America Invents Act.

As a result, this Spring, American businessmen will be racing to the U.S. Patent and Trademark Office instead of the nearest law office to file their claims.

The race is seemingly to the benefit of corporations and the detriment of individuals. But, what does it mean for lawyers.

“In a race of established, well-funded businesses with defined intellectual property protection strategies (and patent attorneys in-house or working closely with the business) versus entrepreneurs that may not have any experience with the patent system and the funds to pursue robust patent strategies, the advantage clearly goes to the businesses,” claims Patrick Richards of Richards Patent Law PC in a recent article for Forbes.

Larger law firms or in-house counsel should be kept busy with new filings under this law for their ambitious corporate clients. This doesn’t preclude, however, attracting new business by offering affordable rates to navigate the new patent law for small businesses or individuals.

But, with this new streamlined and fast-tracked system, complicated and costly patent litigation is likely to decline.

In fact, some veteran entrepreneurs believe that the new law liberates individuals from seeking professional services. Because, for example, individuals will find the system easier to understand, they might also be motivated to file a patent on their own.

“In addition to aligning with international patent offices that are all on a first-to-file system, it is materially easier to operate. First-to-invent is just too hard to measure.  It is practically impossible to know if a prior invention is lurking that hasn’t yet been filed; as a result, a first-to-invent system inhibits investment in new technology areas,” says Chris Gladwin, founder and CEO of Cleversafe, also author to over 300 issued and pending patents relating to dispersed storage technology, according to Forbes.

With less cumbersome requirements for prior art searches, patent seekers may stop searching for intellectual property legal services, as well.

Despite these potentially ominous consequences within patent law, certain firms remain undeterred. Cisco Systems Inc., for one, is taking their strategy on the offensive.

The networking-equipment maker has drummed up new litigation by writing strongly worded legal claims against two patent troll companies.

Cisco’s current suit is against Chicago-based Innovatio IP Ventures LLC, which—unlike typical patent trolls—is targeting the customers of alleged patent infringers.

Cisco, based in San Jose, Calif., and co-plaintiffs Netgear Inc. and Motorola Solutions Inc., claim that Innovatio has sent 8,000 “threatening” letters to coffee chains, hotels, and other retailers using Wi-Fi equipment that includes the three companies’ technologies. The plaintiffs argue that the letters are “misleading, fraudulent and unlawful,” reports The Wall Street Journal.

Cisco’s lawsuit claims Innovatio’s actions amount to an extortion scheme and are therefore in violation of federal antiracketeering laws, reports The Wall Street Journal.

It turns out, when the going gets tough, the tough get going.

So, where does your law firm stand when it comes to the changes in patent filing requirements? And, how will your firm position its business strategy to attract (not dispel) new clientele?

-WB

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