Small Companies Understand Patents – Mostly

After walking the Hardware Show last week and talking to many different people, the conversation often turned to patents and patent strategies when I handed them my business card. I am a sucker for a good inventor-makes-good story, and there were lots of them at the show.

On the whole, I was quite impressed with the basic understanding of almost everybody with regard to patents. Almost everybody understood the basic concept of protecting their intellectual property and the basic business strategies that go along with it.

However, after the basics were covered, many people had some rather fundamental questions, such as misunderstanding a PCT filing, improperly marking their products, and not knowing when and if they should file new patents to cover new ideas.

Invariably, the people who had these questions also were afraid to call their patent attorney because they didn’t like getting billed by the hour. This speaks to a failure on the part of the attorney to really follow through and make sure the client is fully served, a failure that is precipitated and exacerbated by the attorney’s billing practices. Even through the attorney was not asked to give the client advice on many of these issues, the attorney could be held liable for malpractice if the client thinks the patent attorney is looking out for any potential problems, even though the attorney was not asked to address each and every issue.

Taken to an extreme, this leads to various behaviors. In an effort to distance himself from liability, the bill-by-the-hour attorney may send several letters identifying issues that he is specifically not addressing. These letters can take a tone that invites further business with the client, such as offering a service for reviewing the patent markings on the products, with an appropriate disclaimer that should the services not be requested, the attorney shall not be liable. These after-the-filing services may be quite lucrative.

At the other end of the spectrum, the fixed-fee attorney may require periodic meetings just to keep abreast of any changes to the products or business strategies. These meetings may be free of charge just so that the attorney can ensure that he is not exposed to any more liabilities than necessary.

In either case, having frequent contact with the clients after the patent filing is a win-win situation for the attorney and client. However, it seems from my unscientific sampling at the Hardware Show, not all patent attorneys are taking advantage of it.