FITUG e.V.
Förderverein Informationstechnik und Gesellschaft
FITUG e.V.Förderverein Informationstechnik und Gesellschaft |
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http://www.lawmoney.com/homepage/Display_Story/Previewstory.asp?StoryNum=4126
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