Seven Deadly Myths of Intellectual Property

August 20, 2013

Pragmatic Marketer Volume 10 Issue 1When product executives get together, we’re usually preoccupied with urgent tasks: pricing and positioning, new introductions, social networks, voice of customer, Agile development, etc. We tend to neglect non-urgent issues, even if they have long-term value potential. Intellectual property (IP) is only discussed now and then.

At one former employer, my chief technology officer even took it a step beyond neglect, saying he didn’t want his team reading competitors’ patents—and risking subconscious copying. Then he stated one of the seven common myths about intellectual property.

Myth 1: Even if you can get a patent, technology moves too quickly for it to be important. In fact, the fast-moving tech industry has as many patent assertion actions as all industries put together. Consider these headlines:

  • “Jury awards Apple $1.049 billion in Samsung patent dispute ruling” - The Verge, 8/24/12. (It has since been reduced to $600 million.)
  • “Microsoft Owes Up to $600 million Over Patent Use” - Bloomberg, 3/23/09
  • “A10 Networks enjoined from selling ADCs infringing Brocade patents” - Network World, 1/11/13
  • “Broadcom Granted Permanent Injunction Against Emulex in Patent Infringement Suit”  - PR Newswire, 3/20/12

The last two items carry an especially scary message: If you infringe on a competitor’s patent, they can apply for a court

order preventing you from selling your product. Complying can mean a big waste of time and money reengineering the product. In a worst-case scenario, it could mean killing your product altogether.

In brief, a patent has a description of the invention, drawings and claims that set forth specifically what is covered. It can be a new device, a composition of matter or method. There are also special “design patents” that cover industrial designs and decorations, like those rounded corners on the iPhone.

A patent entitles the holder to sue infringers and nothing more. If the holder prevails, they can usually obtain an injunction preventing further infringement and monetary damages covering the value of the business the infringer won attributable to the technology. Note that companies are only entitled to damages covering prior infringement if the product is clearly marked as patented, along with the patent numbers. It’s the product team’s responsibility to ensure all physical products are marked and all software lists the patent numbers (usually in the manuals or in the “About” drop-down menu).

Let’s look at some of the other misconceptions about patents and intellectual property.

Myth 2: You can’t get a patent on software. While you can’t get a patent for an abstract idea like E=MC2 or a new algorithm to convert octal into decimal numbers, you can generally get a patent on a method deployed in a computer that does something useful. For example, a new type of graphical user interface, a method for evaluating computer code or parallel processing of data arrays.

Myth 3: Don’t bother to get a patent; it costs too much to enforce. While it can cost a bundle to defend a patent case—as much as $6 million to pursue a final verdict if a prestigious top-dollar law firm is chosen—patents are rarely litigated. A primary objective is deterrence or bargaining leverage, as seen in this heavy-handed email from Steve Jobs to the president of Palm, Ed Colligan. The email followed a phone call threatening to sue Palm for patent litigation.

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