Sowing and Reaping, An insightful Look at the IP World by Professor Jeremy Phillips

sewing kats   grim reaper cat

I was very honoured that Professor Jeremy Phillips agreed to give a keynote lecture at my PCTea Party earlier this week. Jeremy is not just arguably the foremost trademark expert in the world and certainly the foremost IP blogmeister, but is also an excellent speaker. Having a panoramic perspective of the industry, his talks are not merely entertaining, but thought-provoking as well. Jeremy teased me somewhat, but then again, I teased him when introducing him. It was light-hearted banter that the audience appreciated, and neither of us were offensive or offended.

Taking his theme from the book of Koheleth (Ecclesiastes), Professor Jeremy Phillips looked at sowing and reaping in the IP world.  Jeremy noted that Koheleth (Ecclesiastes 1:4-11announced that there was nothing new under the Sun. In Diamond v. Chakrabarty :: 447 U.S. 303 (1980), MR. Chief Justice Burger ruled that patentable subject matter should “include anything under the sun that is made by man”. By combining these axioms he concluded that nothing was patentable!

More seriously, Jeremy’s main message seemed to be that most patents are an expensive waste of resources, as are most trademarks. Most copyright material has no commercial value either. He calculated that the likelihood of a UK company being struck by lightening was far larger than it was that they would be sued for patent infringement, and so he considered infringement liability insurance as a bit of a scam.

 Whilst well aware that less than 1o% of patents generate sufficient income to cover the filing and prosecution costs, he noted that the very small number of valuable patents generated sufficient wealth to justify the system.

Whilst owners of valueless Intellectual Property have a high level of protection, once patents, trademarks or designs are of commercial interest, there were various fair use, research and personal use exceptions and successful patents could be subjected to compulsory licenses and their owners could be threatened with fair trade and anti-monopoly litigation, so it seemed that worthless IP rights are over-protected, but the valuable ones are under-protected.

The main issue that Professor Phillips raised was whether anyone was educating the clients that they are essentially playing a type of roulette? He looked into who made money from IP and, noted that the patent office didn’t, courts didn’t, the owners didn’t and nor generally did pets! Whilst avoiding the big elephant in the room, I think there was implied criticism of the profession for making money by selling pipe dreams to gullible inventors. In the spirit of the Days of Repentance, it seems to me that it was more than appropriate to have the various IP professionals present contemplate their actions and to what extent we were really furthering innovation and to what extent we were feathering our nests at the expense of delusional wannabee entrepreneurs.

In Defense

My regular spiel at initial meetings with entrepreneurs is to the effect that I can help the prey client obtain protection for his invention/design/brand which is my specialty. Being a physicist and engineer I may even comment a little on the feasibility of an invention, but I do emphasize that I am totally unqualified to comment on the commercial viability of product based on a new idea and whether it will succeed in the market-place. Essentially I tell the client that I can help him (almost always a male)  predict the costs of IP protection, but have no idea of the income it will generate. I do warn him that statistically 80-90% of inventions I do a preliminary search for are knocked out as unpatentable, or as likely to receive only a very narrow patent in a crowded field and consequently to have little value in stopping competitors by generating a monopoly. I charge separately for searching and ask the client if her is interested in a preliminary search. I will file an application based on novelty to the best of our knowledge if I can make a case for non-obviousness and if the subject matter is arguably patentable – I do get 101 type rejections occasionally, but can generally deal with them. The boundaries keep changing and the goal-posts keep moving, so I am prepared to accept border-line cases and to fight for them. I do warn the clients that patenting is rarely profitable and is o easy money. I usually ask the entrepreneur if he has discussed the idea with his significant other and if he shouldn’t take care of mortgages, his pension, etc. first. I regularly suggest that I send him a written quotation and that he thinks about it and lets me know the following week. Thankfully enough of such inventors don’t listen that I have a steady stream of income from writing up patent applications of this nature.

I don’t think I am a rarity in showing this altruism. I suspect that very many colleagues and competitors are equally candid. I know that my ex-partner Jeremy Ben-David is speaking at an event later this month on the title of the wrong reasons for filing patent applications. Sending away potential clients with some good advice often has a pay back when the same client comes back, perhaps years later, with a better invention or recommends one to his associates.  The clients looking for a quick route to easy money are more likely to be the ones that leave one with unpaid bills.

I enjoy meeting the inventors and so long as meetings don’t go on for more than an hour, am generally happy to do so without charging. Surprisingly often they offer to pay me anyway, realizing that they’ve received valuable advice. In the past I’ve charged for first meetings but offset the fee against future work. It discourages wannabee inventors from doing the mail round and wasting the time of several patent attorneys. If I get the impression on the phone that the inventor is a time-waster or if he tells me that he’s been to see a few other firms and wants a further opinion, I generally charge for the first meeting. It is a good selection mechanism.

We may think that we should be educating the client and can charge for so doing, but clients often don’t want advice. They want a patent application. They don’t pay for advice. Free advice is something you can’t earn a living from giving but can still be sued for.

The interesting thing is that occasionally gimmicky patents do fly. Some kitchen gadgety things that I’ve patented that seemed quite superfluous to mankind have been successfully licensed to my surprise and astonishment. I was confident about the likelihood of the patent issuing but was quite open about my skepticism as to the commercial value of the invention.

Some corporate technologies I’ve patented have been licensed for 8 and 9 figure sums. It does happen. Just not very often.

I have corporate clients that are well aware that some patent applications I draft for then are unlikely to issue but if there is novelty and I can make a case for inventive step., i.e. some sort of argument against obviousness, I am prepared to do so, so long as the client understands the issues.  There are companies that file applications knowing that the resultant patent will be difficult to enforce but who have sound commercial reasons to file the applications anyway. Some companies need to show new features at each annual trade convention and want patent applications for these features. Often we are able to successfully prosecute the applications and patents issue. That said, with corporate clients, I may meet with and interact with the inventor of the head of R&D. Sometimes I meet the CEO or the CTO. I rarely meet the shareholders or investors and these sometimes include international R&D funds, etc. Am I aiding and abetting the managers of a company to defraud the investors or the share-holders if we file something because it helps the manager’s status within the company? Who are we responsible to? What are responsible for.

I think that contemplating these issues is valuable for patent attorneys as we approach Yom Kippur, the Day of Judgement.

The party celebrated 10 years of this blog. The packed auditorium was mostly filled by patent professionals and I received a lot of positive feedback about the event which consisted of an hour’s mingling with free beer, wine, tea and coffee, ice-cream, soft drinks and both savoury and sweet party foods, followed by Jeremy’s talk. I suspect that the professionals who like my blog came along and those that are less enamoured by my reporting style stayed away. It is a shame as I am happy to receive feedback and generally post comments submitted to this blog, unless they are clearly spam.

Most of the attendees came from smaller firms. It could be that the larger firms do enough internal events and have educational programs so that their staff feel less of a need to socialize with their contemporaries and to attend thought provoking presentations. Those that did attend seemed to enjoy themselves and there seems to be interest in doing this type of thing more regularly.
We wish aךl our Jewish readers a spiritually uplifting Yom Kippur, and םור Moslem readers a spiritually uplifted Day of Sacrifice – יום הקורבן.

 

2 Responses to Sowing and Reaping, An insightful Look at the IP World by Professor Jeremy Phillips

  1. Jeremy says:

    Michael, you write: “I think there was implied criticism of the profession for making money by selling pipe dreams to gullible inventors”. If I gave that impression, it was not my intention to do so.

    What I had intended to criticise, and hope I did criticise, was the fact that a gap was allowed to exist between the skills in which the profession are trained and examined, on the one hand, and the knowledge and abilities which are sometimes imputed to members of the profession by clients.

    I don’t believe that the profession sells pipe dreams to gullible inventors, but some may be unaware of extent and the potency of the pipe dreams which some inventors carry around with them before they even knock on a patent attorney’s door.

    • Jeremy,

      I am sure that clients get the wrong impression. I felt that there was a sub-context and that you were gently chiding the profession to consider its actions in the run up to the Day of Judgement. I was impressed that you could do it without raising anyone’s hackles. If you were doing it subconsciously or I was reading into your talk a subtext that wasn’t there. So be it.

      The feedback I’ve had from the audience was uniformly complimentary and I’d like to thank you once again for your continued support. The IPKAT is an inspiration. However, in addition, you’ve always been generous with your time, knowledge and experience, and I am often surprised how a throw away half sentence in response to some issue I’ve raised can get me thinking in new directions or appreciating that others think differently.

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