Richard Lloyd

Dominion Harbor Group, a licensing company formed by eight former-IPNav employees, has published a list of six best practice principles, in another attempt by a monetisation business to help improve standards in the patent market. The principles are designed to distinguish DHG from bad actors in the market and to encourage greater self-regulation among the patent community.

In a statement DHG said: “It is it our view that all interested parties, licensors, licensees and other representatives, must adopt a self-imposed, rational approach to licensing and, when necessary, litigating intellectual property rights. Dominion Harbor Group stands ready to take the lead in elevating standards that will increase efficiency, reduce transaction costs and preserve the patent system.”

Although the principles were designed before fundamental patent litigation reform legislation stalled last week in the US Senate, they were clearly designed with thje prospect of change in mind. Talking to this blog DHG chairman and CEO David Pridham admitted that they were keen to go public before any bill that the US Congress might pass in future. “We’re trying to get the industry ahead of any reform in these standards that we’re releasing; we don’t want to wait for the next Congress to act.” 

The six principles that DHG proposes adhering to in tandem with its clients are:

  • Pre-filing letters – DHG will not work with any clients that send serial demand letters in the hopes of extracting “cost of defense” settlements.
  • Patent pleading – DHG will only work with clients that agree to provide clear, concise and detailed disclosure regarding their claims early in the process.
  • Litigation efficiencies – DHG believes that litigation is inherently inefficient and that parties to litigation should do everything possible to expedite the litigation process and thus reach resolution of the material issues at minimal litigation cost.
  • Revenue threshold for licensing – DHG believes that small companies should not be the target of patent litigation where their use of a particular invention may be incidental and small. Accordingly, DHG will not represent any client in a case where the alleged-infringing company has less than $25 million in annual revenue.
  • Rational pricing – DHG recognizes that not all patents are granted on $100 million inventions and that litigation costs should not be used to prop up the value of patents with low damages. DHG invites potential licensees to engage in an early disclosure of revenue information so that both parties can arrive at a rational price for licensing IP.
  • Fee shifting – DHG is in favour of fee shifting that punishes any party engaging in litigation abuse. This should not just apply to a patent plaintiff but rather should apply uniformly to any party that takes unreasonable positions in patent litigation.

In an effort to make litigation more efficient, DHG said it would encourage its clients litigating in the Eastern District of Texas to opt for the district’s new ‘track B’ expedited litigation schedule. On the fee-shifting point DHG added that it was in favour of the recent US Supreme Court decisions in Octane Fitness v Icon Health and Highmark v Allcare. DHG’s move has obvious parallels with similar announcements made by Conversant and Finjan. Pridham insisted that a degree of self-regulation was crucial given the changes made by the AIA as well as the threat of further reform in the US.

“One of the problems and one of the drivers behind the reforms has been the increase in suits post-AIA as a result of the new joinder rules,” he commented. “The market has to adopt a rational approach to patent licensing.” A key part of that, Pridham asserted, was ensuring the free flow of information across both sides of the table in a licensing negotiation so that the value of a patent asset could be properly determined and to help achieve a faster resolution.

DHG was formed at the end of last year by a team led by Pridham who originally helped establish IPNav in 2003 and who then took over as CEO in 2011. Former senior IPNav employees Matt DelGiorno and Brad Sheafe joined him in the new venture. Pridham insisted that the split from IPNav had been amicable and pointed out that a number of IPNav clients including the PIPCOs Marathon Patent Group and Patent Properties were now among DHG’s customer base. Since it started the new business has grown to 15 people, has built up a roster of 50 clients and has pulled in $20 million in gross awards for its clients through licensing agreements.