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EDN.COMMENT: Patent protection: guard dog or cash cow?

In December, I attended the IP07 Conference in Grenoble. One of the keynote talks I found more than a little worrying. Mike McLean of Semiconductor Insights gave it, and the topic was, “State of the art in patent-licensing support”. Whether or not you would have found it worrying, too, likely depends on what you think patents are for. The speaker did make the point that he was outlining an evolution of the use of patents in, and by, companies.

You might assume that patent licensing means something along the lines of: you invent some device or technology, secure a patent on it, then either receive legal protection to exploit it, or license it to someone else to develop, turn in to a product and then market— they make money, you are rewarded for your ingenuity, everyone is happy.

You might indeed assume that—but only if you are as naïve as I was on the topic. No: this particular approach to extracting value from the patent process appears to mean something a little different. Let’s suppose that, as a corporation you have acquired a library of patents over the years, which you may or may not presently be exploiting. McLean says that typically only 5 to 10% of any organisation’s patents are in use at any given time. To improve that figure, you firstly “mine” those patents to identify any ideas that might be useful in step two, which is: you scan the market trying to spot any product that might use a principle similar to one that figures in one of your patents. It doesn’t matter if that device or principle was developed completely independently of the process that led to your patent—if you find someone that fits the profile, you assert your rights to benefit from their use of your discovery. McLean does say that you should be willing to licence your patents before you embark on the process, and you should be willing to endanger existing business relationships— which gives you a feel for where this is going.

You would then invite the alleged transgressors to enter into a licence agreement or, more likely, await a counter claim, and settle in for long process of writing cheques to the legal profession during the inevitable war of attrition that would follow.

At the risk of—I’ll say it again—appearing naïve, I would like to think that the patent system, among other attributes, allows inventors and engineers, and/or their employers, to enjoy the rightful rewards of their efforts while permitting them to make the sort of peer-group disclosure that takes place at events such as IP07. And that that process is one of the engines that keeps technology moving forward at a healthy pace. I can’t think of anything more likely to stifle innovation and the enlightened exchange of ideas for mutual benefit than the thought that round every corner there’s a team of lawyers with electron microscopes, forever looking for an angle.

This licensing concept appears to be, for the most part, a big-corporation pastime: they are likely to have the patent portfolios to back such an exercise. And the deep pockets. If you are the little guy and you see a big company (and its army of legal advisers) coming after you, you might just pay up to make them go away—whatever the merits of their claim.

This has all the appearance of a rather American outlook on legal processes, as they apply to the engineering world. But that does not mean that it affects any other location any the less; in recent months, the US courts have been more and more inclined to view the entire world as being under their jurisdiction. It is all about a legalistic view of the world, where strict precedence matters more than the fact that, for example, few engineering developments take place in a vacuum. Others may reach the same conclusion as you, at about the same time, without having looked over your shoulder.

By coincidence, almost simultaneously, my colleague Margery Conner was reporting on a court case in the US, in the following terms: “Lawsuit has implications for digital control of power subsystems”:

“A federal court jury found that Artesyn Technologies’ digital POL (pointof- load) PMBus-compatible product had infringed on Power-One’s Z-One digital-power-management-and-control patents. In the lawsuit, Power-One claimed that Artesyn infringed on its patent that applies ‘to a digital-powercontrol system for controlling and monitoring an array of point-of-load regulators using a serial bus for communication with, and control of, the point of load regulators.’ ” (Read more at www. edn.com/article/CA6506580.html.)

Here, on the face of the matter, is a “standard”—the PMBus—(“standard” quickly becomes a loaded word in these circumstances) on which many powersector players were basing expectations of a harmonised approach to digital power; now it appears it is the property of just one company. Is this strictly the same issue as the patent-licensing scenario that I referred to above? Perhaps not; but it displays a similar readiness to bring legal processes to bear. The word I began with was “worrying”…