Is Your Company Next

By Kevin Fogarty  |  Posted 2004-11-11 Print this article Print

Companies, particularly non-technology firms, face millions in costs to defend the intellectual property rights of the software they buy or develop.

?"> Is your company next?

Defending patent infringement claims is unfamiliar ground for technology managers, especially at non-technology companies, but it's an area they'll increasingly have to consider, says Andy Gibbs, chief executive officer of PatentCafe.com, a patent management software developer.

To be fully protected, Gibbs advises companies to patent any internally developed software that's sufficiently novel to qualify for protection under the law; keep less innovative technology a secret; publish details of non-critical technology to keep anyone else from patenting it; and get written indemnification from software vendors stating they have full rights to sell the products they're offering.

You shouldn't let concern over patents change the way you develop applications, according to Jonathan Singer, an intellectual property attorney from Fish & Richardson in Minneapolis, who is defending a group of non-technology companies accused of patent infringement.

And yet you can't ignore it.

The number of patent infringement lawsuits in the United States has surged 81 percent during the past 10 years, to 2,814 in 2003 from 1,553 in 1993, according to the U.S. Federal Courts administrative service. Only a small percentage of infringement cases actually go to court; more non-technology companies are choosing to settle and paying up for alleged infringements.

"You really have three choices," Gibbs says. "You can patent something, keep it as a trade secret and hope no one else invents it, or you can publish it as open source so no one else can patent it."

Gibbs advocates choosing three or four core applications—such as a customer identification data-mining application, a specialized transaction module or other software that supports a key part of the business—and patenting them. Gibbs says it costs about $10,000 to get a patent, and little or nothing to publish it.

Why patent your applications?

"If you have something you keep as a trade secret, and someone else invents it and gets a patent, you can no longer practice your own trade secret," Gibbs explains. Patenting your application isn't difficult. The U.S. Patent and Trademark Office issues patents that cover a broad range of functions; in fact, it hands out so many of them that it's almost impossible for one company to steer clear of every potential infringement, according to Gregory Aharonian, editor of the Internet Patent News Service and Bustpatents.com.

"There are over 100,000 software patents," Aharonian says. "You're not going to be able to pay for an investigation of every one. But if there's a specific area you're concerned about, that might be worthwhile."

Next Page: What is a technology executive's first step?


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