In talking with a client last week, we got on one of our favorite topics: almost nobody has the big picture in mind when it comes to patent protection.
The client was a CEO of a small company with a little revenue and a couple of very broad and early patents in their rapidly developing field. His biggest complaint is that most of the patent and legal experts know their specialty, but cannot integrate it into a cohesive business plan.
He worked for years with another patent counsel who knew only patent prosecution, but little else. He also had a litigator who knew how to sue. But he did not have anyone who could take this knowledge and build a business strategy. Each expert knew his little silo of information, but could not translate that into advice that the CEO could use in running the business.
In one example, the former patent attorney advised to write license agreements with several very small companies before attempting to negotiate with a big company. His advice was predicated on an anecdote that the smaller licensing deals had been used in court as evidence that the patent portfolio was valid in some prior case.
This was about the only strategy that the patent attorney gave the client.
The problem is that the weight of that evidence was not discussed. Even though several small licensing deals may lend some credibility to the validity of the patent, they may also merely indicate that the license was cheaper than challenging the validity, not that the underlying patents had any substance whatsoever.
In building a business strategy, each alternative course of action must be given some weight and be balanced with other courses of action.
The advice given to clients is often anecdotal. This covers the advice giving attorney, since the responsibility for understanding the anecdote is the client, not the attorney. I see this as a shirking of the attorney’s responsibility. The client is paying for advice, which needs to include much more than anecdotes. The client needs someone to tell them that the course of action, in this case licensing to small fry before going after the big fish, has some validity, but is not the only available course of action. Being able to stand up in court and wave several other licensing agreements in the air has some positive value, but not enough to change the whole course of the client’s business.
The client was left out in the cold with this advice. He had one data point that was spoken from the gilded tongue of a $350/hour attorney and taken as gospel. The attorney, ever careful to never be liable for giving good advice, gave none whatsoever. The clients walked away more confused than when they arrived, and considerably poorer.
What the client needed was some analysis of the impact of the course of action. In this case, the attorney should have related the anecdote, but said that licensing to small fry first will not be detrimental. However, you could license to the big fish first if your case was presented well and made business sense. The client walked away with one data point, but no scale by which to judge it.
What is the lesson here? Be very careful in relating anecdotes and “rules of law” that are drawn from case law. Each piece of knowledge must have that critical piece of judgment attached that puts the knowledge in perspective with other factors. While it is important to know the individual data points, it is far more valuable to have proper perspective.