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[FYI] Internet IP litigation on the up
- To: debate@fitug.de
- Subject: [FYI] Internet IP litigation on the up
- From: "Axel H Horns" <horns@t-online.de>
- Date: Thu, 4 May 2000 19:22:27 +0100
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- Organization: PA Axel H Horns
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http://www.lawmoney.com/homepage/Display_Story/Previewstory.asp?StoryN
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04 May 2000
Internet IP litigation on the up
E-commerce and business method patent, trademark and copyright
disputes will be the future of intellectual property (IP) litigation,
according to a survey of US IP lawyers. But the US Patent and
Trademark Office (PTO) has been slow to address the concerns of the
new economy, according to the lawyers.
Over half of the lawyers said that the Internet will diminish the
ability of IP owners to effectively enforce their e-business process
patent rights and 80% of lawyers believe that filings for the
infringement of business method patents are increasing. In terms of
economic damages, 91% of lawyers are involved in or expect to be
involved in IP litigation over $100 million. Lawyers expressed
concern at the US PTO, with 88% saying it does not adequately address
prior art issues during its review of business method patents. The
survey was carried out by PricewaterhouseCoopers, the global
professional services firm.
Jonathan Band, IP partner at US firm Morrison & Foerster, says:
"There will be a lot of litigation in the short run, because the [US]
PTO is issuing a lot of Internet patents, which are broad and some
are of questionable validity. So much money is at stake and therefore
people are pursuing royalties and litigating against those who are
not paying royalties. There is already a lot of litigation, but I
think there will be more."
With the speed of the evolution of the Internet, businesses do not
want to be delayed by litigation proceedings. Band says: "It forces
early settlements, or people may have business arrangements, so they
do not face injunctions. Instead they deposit a royalty with the
court and if it is found that they are infringing rights, they make
the payment to the plaintiff. They want to avoid the injunction."
Peter Gowdey, IP partner at US firm Pillsbury Madison & Sutro, says:
"Patents are public once issued or published. That being so, the fact
that the Internet will be making use of any such patent rights will
only make the potential damage base larger. The big issue with the
Internet is how do you control who is having access to what, who is
making derivative works of copyrighted material and how do you limit
or otherwise control access to licensed rights? Maybe you do not and
you have to consider how you contract with users and how you charge
for the licensed rights at the front end."
Gowdey adds: "There will be a lot of shaking out and IP litigation,
such as business method patents, linking and deep-linking agreements.
We are already seeing those cases. People are trying to look into it
very carefully. People are being trained to think about the pitfalls
to alleviate some of those. There will be a lot of use of mediation
and arbitration, instead of federal courts."
The PTO has responded to growing concern by announcing the addition
of a second tier of review for e-commerce-based business method
patents. Band says the PTO is trying to limit the number and improve
the quality of Internet patents issued: "There a lot of proposals on
refinement and elaborations. These include getting public comment on
patents before they are issued and the need to prohibit patents
generally, or at least the ones that are nothing more than existing
business methods."
Band thinks that at some point patent issues will take care of
themselves with fewer issued. He suggests having a database of prior
art, a similar view to one held by Gowdey. Gowdey says that a central
database containing all software patents published will make a usable
and sortable function, increasing the searchability of existing
patents worldwide.
Yesterday Lawmoney covered the case involving MP3.com, the music
service provider, which was found liable for copyright infringement .
There have been many initiatives to protect IP rights, such as those
launched by the European Commission and Andersen Legal , the global
legal services network associated with Andersen Worldwide.
Andrew Crooke
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