International patent and trademark experts to participate in panel discussion

posted by Elizabeth Gearhart, Ph.D., patent agent at Gearhart Law

Are you an entrepreneur planning to conduct business internationally?  Or do you just want to find out more about global commerce?  Join us for a free symposium. 

For more information or to register:  www.GIPLS.com 

A distinguished panel of patent, trademark and copyright experts from around the globe will discuss international practices and strategies for small companies and entrepreneurs at GIPLS, the Global Intellectual Property Law Symposium.  

The symposium will be moderated by Richard Gearhart, Esq.  The panelists include:

Lucinda Longcroft, Head of the New York Office of the World Intellectual Property Organization (WIPO)

Mindy Bickel, from the New York Region of the United States Patent and Trademark Office (USPTO)

Barry Eagar - Australia

Cristina Guerra - Brazil

Cory Furman - Canada

James Zhu - China

Outi Virtaharju - European Union

David Postolski and Susanne Somersalo - United States

The event will be held in 3 venues over 3 days from 6-9pm:

March 30       Quorum at University Science Center, Philadelphia

March 31       University Hall Conference Center, Montclair State U., Montclair, NJ

April 1             Fordham University School of Law, NYC at Lincoln Center.

The event is free and open to the public; to register go to www.GIPLS.com. 

 

 

Workshop - Protecting a food recipe - trademarks, trade secrets, trade dress, patents

How can you protect your food recipe from pirates and copycats? Do you need a patent? What kind of patent? What about a Trademark? What is Trade Secret or Trade Dress?  

James Klobucar, Esq., Intellectual Property Attorney at Gearhart Law, will answer your questions when he gives a presentation at the

Foodpreneur ® Recipe for Success Boot Camp.    

USE COUPON CODE Foodfeb2015 for $25.00 off enrollment.  

Information about the Foodpreneur program and enrollment on line can be found at www.foodpreneur.com; for additional information send an email to esther@foodpreneur.com. Call 908 685 2035 to ask for Esther or 908 797 9847 to ask for Janis for questions and enrollment.

 

Foodpreneur Bootcamp-Recipe for Success!

 

Monday, February 23, 2015 from 9:00 AM - 5:00 PM 

Affinity Federal Credit Union - Hillsborough Branch
315 U.S. 206
Hillsborough Promenade
Hillsborough Township, NJ 08844

 

What's in the Recipe for Success?

 

The Foodpreneur ® Recipe for Success Boot Camp is an intensive series tailored to new food entrepreneurs who have a great specialty food idea but are unsure of the next steps. The program covers the key ingredients needed to be a successful Foodpreneur. Participants will have an overview of the many facets involved with creating and launching a food or beverage product.

The Boot Camp is taught by food business experts with hands on industry knowledge of specialty foods products. Participants learn experientially through classroom interaction and are provided with tools, resources and information to both learn the food business and develop plans to create sales, manage growth, and create or refine a product. The knowledge gained in the Foodpreneur Boot Camp will increase chances of success in establishing a Specialty Foods Business. Established food businesses can improve their skills in key areas such as food marketing and sales. Participants will be introduced to the Foodpreneur business model strategy of MVP- Minimum Viable Product, designed to clarify their vision and help participants identify and understand what their product is; and how the product should be produced, marketed, and sold. Upon completion of the Boot Camp, participants can head to the checkout line with a personal "Recipe for Success" - a Foodpreneur basic business plan outline.

 

Our seminar reviews key phases that need to be addressed as you launch your food based product. A "taste" of what we will cover over the course of your Foodpreneur Boot Camp;

 

Before You Get into the Kitchen:

 

  • Initial Capital &Time /Company Formation/ Insurance/Legal & Trademark/Feasibility of product concept, who is your consumer and what problem do you solve?

Getting Your Idea Out of the Kitchen:

  • Recipe Development to Commercial Formulation / Certifications /Viability of Product & pricing /Commercial Kitchen and other manufacturing processes/ Branding, design & packaging/ Forecasting & Accounting/ Raising Dough- finding sources of funding

Getting Your Product on the Shelf:

  • Production/Understanding distribution channels- from specialty stores to supermarkets/How do you get it there? What do distributors and brokers do?/Developing a Sales Pipeline/Pitching the buyer

Getting Your Product onto the Consumer's Plate & into their Hands:

  • What does it mean to develop a "Go to Market Strategy"?/Trade Promotions/Social Media/Advertising

All Foodpreneur "Recipe for Success" Boot Camp Students will receive the following:

  • All PowerPoint presentations, worksheets & course materials
  • Updates and discounts on upcoming educational materials and instructional opportunities

Our Team of Foodpreneur Instructors: Led by Esther Luongo Psarakis, and Janis Hertz Grover, both subject matter experts in their field to provide you with a comprehensive educational "Foodpreneurial" experience.   Additional guest speakers featured:

Our Food Scientist:

 Dr. Marc A. Meyers is Managing Principal of Meyers Consulting, LLC, and is a senior Research and Development Manager with global experience in innovation and new technology development, microencapsulation and delivery systems. He is experienced in the development of functional foods and nutraceuticals, dietary supplements, encapsulated Flavors and bioactives, hydrocolloid applications, and the technical service needs for food, flavor, and functional Ingredient applications. He has been awarded 36 patents, including 19 US patents, 17 foreign patents and 12 PCT's. Dr. Meyers has a Ph.D. from Rutgers University in Food Science and a B.S. from Penn State University in Food Science and is an active member of the Institute of Food Technologists. 

Our Trademark Attorney:

 James Klobucar  is an intellectual property attorney from Gearhart Law, a boutique intellectual property law firm located in Summit, New Jersey. James has extensive experience in both patent and trademark matters, and chairs the firm's design patent practice. He strongly believes in assisting individual inventors and entrepreneurs and has worked with a number of incubators to help these driven individuals make their dreams a reality.

 

About Gearhart Law

Gearhart Law is an intellectual property firm located in Summit, New Jersey specializing in patent and trademark services. The firm's expertise lies in drafting and prosecuting patents, trademark filings and prosecution, drafting and reviewing licenses and agreements, conducting due diligence for both investors and entrepreneurs, drafting legal opinions, patent enforcement and other legal matters related to IP. Gearhart files both domestically and internationally and has attorneys who speak multiple languages.

 

Gearhart Law has over 20 years of expertise in the area of consumer/industrial products and life sciences, as well as software and chemical arts. The firm's clients range from individual entrepreneurs to global businesses. Gearhart Law is located at 41 River Road, Summit, NJ 07901. For more information, call 908-273-0700, email hello@gearhartlaw.com or visit our website at www.gearhartlaw.com and our blog at www.patentpuzzle.com.

 

  

GEAR HART LAW  

 

GEARHART LAW

Patents and Trademarks

41 River Road 

Summit, New Jersey 07901

908 273 0700

 

 

 

Design patents are now easier to file internationally

 

Re-posted from the USPTO website www.uspto.gov
by James Klobucar, Patent Attorney at Gearhart Law

United States Deposits Instrument of Ratification to Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs

U.S. innovators will soon have more options for pursuing multijurisdictional protection for new industrial designs

February 13, 2015

Press Release 15-02

CONTACT: (Media Only)
Patrick Ross or Paul Fucito
(571) 272-8400 or
patrick.ross@uspto.gov (link sends e-mail) or paul.fucito@uspto.gov (link sends e-mail)

Washington – The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) today announced that the United States has deposited its instrument of ratification to the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (Hague Agreement) with the World Intellectual Property Organization (WIPO) in Geneva, Switzerland. This marks the last step in the membership process for the United States to become a Member of the Hague Union. The treaty will go into effect for the United States on May 13, 2015.

Currently, U.S. applicants wishing to pursue protection for industrial designs in multiple jurisdictions must file individual applications in each of the respective jurisdictions where industrial design rights are desired. When the Hague Agreement enters into force for the United States, it will be possible for U.S. applicants to file a single international design application either with WIPO in Geneva, Switzerland, or the USPTO to obtain protection in multiple economies. The Hague system for the protection of industrial designs provides a practical solution for registering up to 100 designs in over 62 territories with the filing of one single international application.

“U.S. accession to the Geneva Act of the Hague Agreement will provide applicants with the opportunity for improved efficiencies and cost savings in protecting their innovative designs in the global economy,” said Deputy Under Secretary for Commerce for Intellectual Property and Deputy Director of the USPTO Michelle K. Lee. “We are extremely excited about joining the Hague Union and contributing to the continued expansion and development of the Hague system which facilitates protection of industrial designs in design registration and examination systems alike.”

The
Hague system offers applicants increased filing efficiencies and potential cost savings in pursuing protection for their innovative industrial designs. As envisioned under the Geneva Act, the United States will continue to substantively examine design applications and to grant design rights in the form of U.S. design patents, whether the application is filed pursuant to the Hague Agreement or as a United States design patent application.

USPTO will soon publish the Final Rules governing USPTO processing and examination of international design applications filed pursuant to the Hague Agreement in the Federal Register.  The Agreement, Title I of the Patent Law Treaties Implement Act of 2012 (the implementing legislation for the Hague Agreement in the United States), and the USPTO’s Final Rules are all expected to go into effect on May 13, 2015. U.S. design patents resulting from applications filed on or after May 13, 2015 will have a 15 year term.

The Hague system is expected to experience significant growth over the next few years with recent and expected additions of several countries to the member list. In addition to United States membership taking effect on May 13, 2015, South Korea became a member effective July 1, 2014, and Japan is expected to become a member in the same time period as the United States.  Canada, China, and Russia are also among the countries exploring membership in the near future.

For non-press inquiries please contact David Gerk, Patent Attorney, Office of Policy and International Affairs (OPIA) at 571-272-9300.

Stay current with the USPTO by subscribing to receive email updates at our Subscription Center at
www.uspto.gov/subscribe.

 

Global Intellectual Property Law Symposium

The Global Intellectual Property Law Symposium organized by Gearhart Law

Are you an entrepreneur or small business owner who's ready to expand to the global stage, or do you just want to learn more?  Join us in either Philly, Montclair, NJ, or Manhattan for a powerful panel presentation.

Patent professionals from six countries will discuss the business climates and the best way to protect Intellectual Property in their countries.  Our panelists include attorneys from China, Europe, Australia, Brazil, Canada and the U.S.  The presentations are in the evening so you may schedule meetings with the attorneys during the day as time permits. 

Space is limited so reserve your spot soon!

 

Apple's latest patent - no more pausing the movie

written by Matthew G. Miller, Patent Attorney at Gearhart Law
www.GearhartLaw.com

Apple Wants You Snack Freely While Watching Netflix

            A few short weeks ago Apple, Inc. was granted a patent on a piece of technology that, if implemented, will change the living room forever. Ever since January of 2007, when Apple released the first generation of the Apple TV, the Cupertino company has been attempting to integrate themselves into the living room. With the issuance of United States Patent No.: 8,918,822 (“the ‘822 patent”), Apple has continued this trend.

            The ‘822 patent aptly describes a problem that we have all experienced: “…a group of people may sit in a room with the fixed display system and begin watching a movie or other content. Then, during the viewing when someone decides to leave the room (e.g. to prepare a snack), the other viewers must either pause the viewing while they all wait for the departed viewer to return, or let the presentation continue and the returning viewer may miss some of the presentation.

            This system works by first viewing content on a screen via a fixed display system via any device that is capable of receiving and transmitting streaming content to a separate device. Such devices include a set-top box, a network-enabled DVD player, an Apple TV, a Google TV, a Roku Streaming Player, a digital video recorder (DVR), and video game consoles (such as an Xbox 360).

 

            When a user wishes to view the streaming content on their portable electronic device (mobile phone/tablet), they have a number of options. First, if the content is coming from a specific provider that has a proprietary application on the portable electronic device (e.g. Netflix, Hulu), the system can interface directly with that application. Alternatively, the system may allow a user to choose from a number of active data streams. If the previous two methods are not available, the system also provides for the ability to mirror the content on the portable mobile device.

            As is clear, Apple is making strides to provide its customers with a seamless viewing experience. Interestingly, this is directly in line with the late Steve Jobs’ proclamation that he would like Apple to “create an integrated television set that is completely easy to use ... It would be seamlessly synced with all of your devices and with iCloud ... It will have the simplest user interface you could imagine. I finally cracked it."

            Whether the contents of the ‘822 patent will ever make it to market remains to be seen, however, this type of innovation is indicative of future advances being brought to a living room near you.

 

EAT MORE KALE trademark

 

EAT MORE KALE: One Man’s Showdown With A Corporate Giant

   

By: James Klobucar, Patent Attorney at Gearhart Law
www.GearhartLaw.com

Back in 2001, Bo Muller-Moore, a Vermont resident, started using the phrase “Eat More Kale,” a seemingly innocuous phrase, to promote the green leafy vegetable. Mr. Moore generated some attention amongst his local Vermonters once he began making t-shirts and other items bearing the phrase. Fast forward about a decade, and Mr. Moore decided to capitalize on what was beginning to become a burgeoning business by filing a federal trademark application with the United States Patent and Trademark Office (USPTO) on the phrase “Eat More Kale.” However, receiving the federal trademark protection he so desired was going to be no easy task.

Enter Chick-fil-A, a fast food chain with over 1800 locations nationally. Chick-fil-A first sent a cease and desist letter to Moore in 2006, a full five years before his federal trademark application filing. The letter did not have its intended effect and by and large the corporate giant left Moore alone. Once the federal trademark application was filed, however, Chick-fil-A increased the legal vices on him considerably. The company in a subsequent cease and desist letter claimed that Moore’s phrase “Eat More Kale” was too similar to Chick-fil-A’s trademarked “Eat Mor Chikin” slogan. 

About four months after that initial trademark filing, Mr. Moore received the first rejection of his application on minor technical defects in the application that were easily curable. However, a mere four days after this rejection was issued, “someone” anonymously submitted information to the trademark examiner encouraging them to examine Moore’s application in light of Chick-fil-A’s trademark registrations, which by the way is a perfectly legal procedural maneuver. 

A few months later, a new rejection was issued for Mr. Moore’s application under Section 2(d) of the Trademark Act as his trademark presented a “likelihood of confusion” with the Chick-fil-A trademarks so kindly brought to the trademark examiner’s attention. Under this section, registration of a trademark is barred if the applied for trademark “so resembles a registered mark that it is likely that a potential consumer would be confused or mistaken or deceived as to the source of the goods and/or services of the applicant and registrant.” The legal wrangling between Moore and Chick-fil-A had thus begun and subsequently took on a life of its own through the media.

Moore, to his credit, was able to collect tens of thousands of Facebook followers and obtain equally large numbers of signatures to a petition supporting his cause. This was one man’s showdown against a corporate giant, and he wasn’t prepared to go quietly. By leveraging the powers of social media and attracting the support of Vermont state officials, Moore was able to receive the help of pro-bono lawyers including law students from a legal clinic at the University of New Hampshire School (UNH) of Law to assist him in fighting the legal technicalities involved with his case.

According to one of the lawyers involved with the case Attorney and UNH Professor Ashlynn Lembree, “we presented evidence and arguments [to the trademark attorney] that the marks are different, particularly in light of the connotation evoked by spelling differences and emphasis placed on the direct object of a command sentence, combined with the point that KALE and CHIKIN are different; that the abundance of third party uses of EAT MORE _____ on t-shirts means that consumers are attuned to placing emphasis on the third word to differentiate source; that comparable parallel marks in the same goods have been allowed to co-exist on the U.S. Trademark Register; and that consumers of the respective products from these two sources are sophisticated in their purchasing decisions in light of political and nutritional views that tend to be connected with the respective sources.”

Thanks to the thorough and well-versed arguments presented in the attorneys’ response to the rejection, the trademark “Eat More Kale” was allowed by the USPTO on December 9, 2014. In making the allowance, the trademark examiner provided no explicit reasons for allowing the application. This is not particularly surprising given that it is not required that any reason be explicitly enumerated. Thus, we may never know exactly why the trademark examiner allowed the application nor why Chick-fil-A seemingly gave up the fight they so wholeheartedly invested in and fought many times before. My guess is there’s at least one guy out there who really doesn’t care.

Overall, the victory is considered by many to give credence to small business owners, the local/farm food movement, and even the state of Vermont. Being a graduate of the University of New Hampshire myself, it’s great to see the type of assistance that exists in the legal community that enables it to play a pivotal role in assisting small start-ups and entrepreneurs and helps them prevail on the merits against any entity big or small. As Vermont’s governor Peter Shumlin said “The message is out: Don’t mess with Vermont. And don’t mess with Bo. In Vermont, we care about what’s in our food, who grows it, and where it comes from. That’s what Bo and Eat More Kale represent. And that’s something worth fighting for.”

Further reading:

http://tsdr.uspto.gov/#caseNumber=85412053&caseType=SERIAL_NO&searchType=statusSearch

http://www.washingtonpost.com/business/apnewsbreak-artist-wins-eat-more-kale-trademark/2014/12/12/9182c642-81cb-11e4-b936-f3afab0155a7_story.html

http://www.adweek.com/news/advertising-branding/chick-fil-loses-legal-battle-block-eat-more-kale-t-shirts-161984

Russia Modernizes its Patent Legislation

 

written by Susanne Somersalo, Ph.D., Esq., patent attorney at Gearhart Law
www.Gearhartlaw.com

It is now safer for foreign companies to enter the Russian markets--- Russia modernizes its patent legislation

The IP laws in Russia have come a long way since the Soviet Union collapsed. The Soviet Union used to provide something that was called an Author’s Certificate to an inventor. However, inventions were state property and anyone could use the inventions without the author’s permission. The author, however, was entitled to a compensation for the exploitation of the invention. The maximum compensation was regulated by the laws.

The Russian Federation adopted a new patent law in 1991 which was based on the Soviet law. This law has since been amended twice and in October 2014 there was yet a new amendment which considerably improves the rights of inventors. From the perspective of foreign business owners, the amendments are especially important.

There are two basic ways to protect inventions in Russia: the invention may be protected by a patent or by a utility model. In addition to these two forms one can also protect a design.

The requirements for a patent have been similar to what we have in the United States, in that the invention has to be novel, it has to have an inventive step, and there has to be an industrial use for the invention. However, unlike the U.S. or European patent laws, the Russian law did not set any specifications as to what extent the claimed invention had to be described. The new law requires “sufficient description” which is similar to the US law requirement that the description be “enabling”.

A remarkable change in the law is the novelty requirement for the utility models. A utility model is very similar to utility models or petty patents in various other countries, such as Germany or China. A utility model is valid for a shorter period than a patent and it is usually examined and issued faster than a regular patent. What was the huge flaw in the Russian patent law, especially from the view point of a foreign company, was that only documents published in Russia were considered as prior art for utility models. This resulted in situations where foreign companies trying to enter Russian markets without patent rights in Russia got sued by Russian ‘trolls’ who had gotten rights in Russia by filing utility models for what the foreign companies had already patented or practiced outside Russia.   This is now made impossible by amending the definition of prior art to include publications from anywhere in the world.

Another major change is the amendment regarding assignments and infringement. Firstly, the new legislation bans payment free assignments. In practice this means that there has to be some sort of consideration. Also the new law requires recordation of assignments and licenses.

Secondly, the new legislation improves the rights of the infringed party. From the beginning of 2015, the infringed party can ask not only for an injunction but also for compensation from the infringement act. The compensation has been limited to be between 10,000 and 5 million Rubles which equals to $300 -$150,000. This may not sound like much, but considering that before this there was no way to get compensation, this is a major change. Instead of an injunction the infringed party may also allow the infringer to continue using the technology with a license that has double the price that would usually be imposed in a similar case.

In conclusion, the amendments modernize the IP legislation of Russia and bring it into conformity with international norms. This modernization will help foreign companies to enter the Russian marketplace as well as help Russian companies and inventors to protect their intellectual property against infringers.

Steve Jobs - Still Getting Patents After Death

written by Elizabeth Gearhart, Ph.D., patent agent at Gearhart Law
www.GearhartLaw.com

Can you get a patent on your invention after you die? Yes! To cite a famous example, Steve Jobs, the recent CEO of Apple, has received 141 patents since he passed away. Not surprising that one of the most inventive, sharpest business men in America would value patents so highly. 

 

Now what happens? We thought we’d answer a few of the more obvious questions:

 

Q. Who gets the rights to those patents and what happens if an inventor has passed away before the patent has issued?

A. Since patents are ‘intellectual property’, they are treated like property. The rights of an inventor can be transferred or sold (assigned), or passed down as part of his/her estate. If, for instance, your parent had a patent and passed away while it was still valid, he/she could bequeath the rights to the patent to you in their will, and you would own the patent to either sell or to use yourself. If the patent application had been filed but the patent hadn’t yet been allowed or issued, the rights to the application pass down to you and you can assign the application or prosecute the patent application to issuance of the patent itself if you so choose.

This is true even if the inventor is still alive. He/she can assign their patent rights to another individual or to a company.  This is often done when someone sells their patent, or when they work for or own a company and assign their rights to the company. For instance, Apple’s latest patent, “Display screen or portion thereof with graphical user interface” issued on December 2, 2014, has four inventors, two in Cupertino and two in San Francisco, but the patent belongs to Apple as the assignee.

 

Q. What happens if you just leave the deceased inventor off of the patent application?

A. Bad things can happen, that’s what. If all of the inventors aren’t listed on a patent application, the patent that issues can be ruled invalid. Then everyone loses their patent rights, even the living inventors. 

This is true too if all inventors are living and one or more are left off of the application. In the case where one inventor has a dispute and refuses to sign the patent filing papers (the declaration, for instance), the patent application can still be filed with a statement saying that the inventor refused to sign. But his/her name must be on the application as an inventor or the patent can be invalidated.

 

Q. If I inherit a patent and want to sell my rights, but there are other inventors, can I sell just my rights?

A. Yes, absent any previous agreements that would prevent your doing otherwise. It would be wise to consult an attorney first in this case. Once you sell your rights, however, you have no say in how the patent is managed. The rights to that go to the assignee, and the other inventors retain their rights. They get to control how to use the patent to make money. If you’ve sold your patent for an on-going share of the income from sales of the product it protects, you should make sure you have an attorney review the contract to make sure there are clauses that help ensure that the assignee makes a good faith effort to sell the product.

If you sell a patent application instead of a patent, the assignee and other inventors get to decide how best to prosecute the application and you get no say in it.

 

If you have any questions about patents, trademarks, or copyrights, feel free to call us at Gearhart Law at 908-273-0700 or email us at hello@gearhartlaw.com

 

Back to Steve Jobs and his patents:

The Smithsonian Institute has put together an online exhibit of Steve Jobs’ patents and trademarks titled:

The Patents and Trademarks of Steve Jobs: Art and Technology that Changed the World

You can access it at:

http://www.si.edu/Exhibitions/stevejobs  

Matthew Hintz recaps the trademark expo

                       

Matthew Hintz, Esq., an attorney focusing on trademark and intellectual property issues and friend of Gearhart Law, recently attended the USPTO's 2014 National Trademark Expo. I talked to him about his experience there. He provided me with the following information:

The event lasted two days in October and drew about 15,000 people. The first day, Friday, October 17th, drew a lot of school fieldtrips. The second day, Saturday, October 18th, drew both the adults and children.

The event had two facets:

1)     presentations for small business owners to learn about trademarks, registration and overviews of the USPTO's online tools and resources

2)     booths with examples of different ways trademarks can be done

Most people think of a trademark as a word or symbol, but shapes, configurations, and sounds can act and be registered as trademark as well. Below is an example of a soundmark that recently issued:

https://tmog.uspto.gov/#/issueDate=2014-11-18&serialNumber=86048417

Matthew volunteered at the American Bar Association Intellectual Property Law section booth. 

The booth featured two games for the event. One was a brand memory game with cards showing the color and font of a brand’s trademark, but without the trademark. The participants were then challenged to guess what the trademark was and who owned it.

The second game, for younger kids, Matthew helped developed. The game featured showed registered trademark shapes or product configurations and asked the kids to guess the product. For instance, the shape of a  PEEP chick, a registered trademark, was shown and the kids had to guess the shape was a PEEP chick. Other shapes in the game were the Sun Chips' ruffled chip and Pepperidge Farm's goldfish cracker shape.

This is an annual event, so if you missed it this year, you can attend it in October 2015.

 

Insuring Your Start-Up Against Litigation

 

written by James Kobucar, Esq., Patent Attorney at Gearhart Law
www.GearhartLaw.com

            About a year ago, a crowdfunding campaign was run by Ditto.com to raise money for its business. However, this wasn’t your typical crowdfunding campaign. Ditto was attempting to raise money to fight an allegation of patent infringement made by a “non-practicing entity (NPE)” or patent troll.

            Many in the start-up community are aware of the existence of these entities and the high level of damage such an allegation can cause to a start-up. According to John Amster, CEO of RPX, Corporation, “if a start-up gets hit [by an infringement suit], it’s a catastrophic outcome.” Indeed, statistics show that the average cost of a “small” case (with projected liabilities under $10 million) is about $1.25 million to litigate, with the alternative being a settlement which may or may not be warranted. 

Thus, RPX has found a niche in the business of providing patent risk management services. The company identifies and purchases patent assets they deem of high value and then charges a fee to companies to have access to these patents for defensive purposes. Currently, the company owns about 4,900 U.S. and International patent assets. The model has thus far proved successful for the six-year old company with membership fees for companies ranging from about $65,000 to $6.9 million and expected revenues this year of around $256 million.

            Obviously, such fees are not practical for most all start-ups and entrepreneurs who rely on every cent to make their dreams a success, but recently RPX rolled out a line of lower cost insurance options. This includes patent litigation insurance premiums starting at $7,500 for $1 million in coverage. Unlike the company’s previous offerings, there's no limit as to the size of the company seeking coverage and RPX will even insure pre-revenue companies. This should prove advantageous for the entrepreneurial community as larger companies are much more willing to take on these NPEs leaving the smaller companies as vulnerable as ever.

            Thus, if you are a start-up (especially in the tech community) some form of litigation insurance may be another avenue to explore to secure your company’s position. It should go without saying, but there are many, many more terms, exceptions, and limitations involved with such insurance than those mentioned in this blog and other forms of protection may be available as well.

Overall, it seems the business community as a whole is taking a harder stance against the NPEs. Hopefully, this is another step in the right direction to help protect the innumerable start-ups and entrepreneurs working to establish themselves in the business community.