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How to Avoid Patent Trolls - Mini Law Lesson

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What growing patent litigation means to the marketing world, according to Brian Heidelberger. …

What growing patent litigation means to the marketing world, according to Brian Heidelberger.

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  • 1. Mini Law Lesson How to Avoid Patent Trolls Brian Heidelberger bheidelb@winston.com Twitter @briheidelberger Info @ www.winston.com/bheidelberger
  • 2. IMPORTANT DISCLAIMER • I am not your attorney. • This is not legal advice. • But I am a Jr. inventor and you owe me some $$ … 2
  • 3. What Are “Patent Trolls”? • Buy patents and assert them in litigation • Settlement offered are well below cost of litigation • Litigation is expensive, risky and costly • So majority of troll cases settle • Cost agencies $10MM/year 3
  • 4. How They Take Advantage of the System? • Patents have “fuzzy boundaries” • It’s time and cost prohibitive to search all concepts before use 4
  • 5. How it Impacts the Ad World • Agency’s traditionally:  run preliminary trademark searches  Create original works or obtain a license  Get insurance • But with patents  Running search is hard/expensive  Creating original work doesn’t remove liability  Can’t get good insurance • All agencies are doing digital • Patents are hard to interpret • Asserted over commonly used technologies 5
  • 6. Patent Infringement Cases/Claims • QR Code-related Patents Asserted • Alleging that using QR codes containing a shortened link in marketing materials constitutes patent infringement. 6
  • 7. Patent Infringement Cases/Claims • Text Message Patents Asserted • Alleging patent covers sending a text message that includes a URL within the notification. 7
  • 8. Patent Infringement Cases/Claims • Network Scanning Patents Asserted Alleging patents cover hooking up a scanner and e-mailing a PDF. • Demanding $1,000/employee 8
  • 9. How Agencies Can Protect Themselves? 4A’s Patent Risk Guidance • Advertisers should assume all risks  They know searching is time and cost prohibitive  They are asking agencies to act as insurers • Agencies should factor risk into pricing  Could get several claims up to $200Kish • If indemnifying at all, indemnity should limit/cap liabilities 9
  • 10. How Agencies Can Protect Themselves? 4A’s Patent Risk Guidance (Cont.) • Agency should also:  design software so that its flexible  use features that have been the market for a long time  watch for other patent claims  do patent searching when using new technologies  investigate insurance coverage  Attempt to disavow 3rd party responsibility 10
  • 11. How Agencies Can Protect Themselves? 4A’s Patent Risk Guidance (Cont.) • Some Additional Thoughts:  Do you really want to do digital? • Is the risk/reward worth it?  Can you subcontract liability away? –Subcontractor must have appropriate insurance coverage or size to make it viable  Develop an internal process for considering these issues for each new project 11
  • 12. How Advertisers Can Protect Themselves • Client’s view:  Agency is the expert in digital  Agency shouldn’t take on work in which it is not expert  Agency is in the best position to determine what should be searched and what risks are out there  Agency is traditionally responsible for any claims and this is nothing different 12
  • 13. How Advertiser’s Can Protect Themselves? • Have agencies undertake liability • But …. Not Foolproof • Additional steps must be taken • Internal polices/searching/monitor • Factor several up to $200Kish settlements into marketing budget 13
  • 14. Agencies and Advertisers Could Collaborate • Share risk  Commonly used technologies  Maximum caps on agency liability  Minimum threshold on agency liability • Take Legislative Action Together Via AAAA and ANA • Undertake Proactive Patent Challenges Together 14
  • 15. Follow me on Twitter @BriHeidelberger 15
  • 16. More Mini Law Lessons youtube.com/AdAge.com & youtube.com/BrianHeidelberger 16

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