Cinderella story – is prior art the hidden beauty of intellectual property?

For some consumer electronicscompanies, prior art libraries havebecome a first line of defence againstpatent assertions and an extremelyeffectively tool against non-practisingentities

Traditionally, companies filed or acquired patents to protect their products and services from copyists. However, changing IP dynamics over recent years have seen companies look to strengthen their portfolio to counter patent assertions. A portfolio acquired for this purpose acts as a deterrent as well as providing counter-assertion collateral in a litigation or claim, even though it may cover subject matter on the periphery of a company’s expertise or in a different industry. Ownership of patents to counter potential aggression is a sound strategy, but invalidating the assertion can have a similar economic effect in a patent battle and can be very effective against non-practising entities (NPEs).

We all know the concept of prior art, but to most practitioners it is what the patent office or a search company turns up. However, if a concerted effort is deployed, it can result in the creation of a meaningful defensive tool. Some consumer electronics companies have used this approach to great effect by creating comprehensive prior art libraries and there is no reason to suppose that it cannot be applied successfully in other sectors.

A prior art library may sound grand, but it is simply a collection of devices, software, manuals, documents, films, project papers, foreign language documents and interviews relevant to possible threats. These artefacts should go back to the dawn of the industry and cover as wide a scope as reasonably judged, relating to potential threats and aggressors.

Let us take a real example: a navigation device and software company decided to research and collect evidence of the history of its industry. They collected dozens of devices, software sold for maps and navigation, manuals, articles and – given that the early systems were built directly into cars – pictures and videos of these. One observation was that few of the core features of these products were patented. A second was that much later patents were granted for these same features. This collection has saved the company many tens, if not hundreds of millions, in neutralising patent claims by invalidation.

With operating companies continuing to search for better ways to deal with NPE attacks because existing portfolios offer no remedy, experience shows that prior art has a key role to play. NPE pre-filing due diligence will include a validity search, often as part of the patent purchase process, but this will be patent based. Often the NPE model is to bring parallel actions against a number of sector players and hope that common ground helps to contain the costs. However, if one of the defendants can bring different prior art to the table quickly, this model is disrupted. This may force the NPE to take an early claim construction position to avoid the art and so jeopardise its claim. If only one defendant has the important prior art, this may provide it with sufficient leverage for early exit.

The US Patent and Trademark Office re-examination scheme has received much publicity and column inches. Suffice to say that devices and manuals clearly show that a reduction to practice and new prior art of a non-patent nature is as well received as any. In one case, presenting invalidation evidence as a real physical example and a video had far more impact than just another patent specification.

It is evident, then, that a well-ordered prior art library has real value. A company might keep this information to itself as a competitive edge in litigation. However, sharing with others in the industry and making the information publicly available are also possibilities. Choosing to share such information will depend on the sector dynamics as much as on the decision of the individual chief IP officer. As the trade in intellectual property grows, the more elements in a portfolio, the better. To give an example, in one consumer electronics sector, those with prior art collections have chosen to collaborate, but do not assist those that have not invested similarly.

While the prior art is needed by the IP team, the collection and collation may be best undertaken by someone with extensive industry knowledge and contacts. The scope of the search needs direction rather than definition. In the navigation example, any handheld computing device and any system with positioning or map display was the brief. The collection needs study and documented provenance so that a claim or competitor’s product can be mapped to the art reasonably quickly. Law firms often find this difficult, as they lack the industry knowledge which would enable them to easily identify or recall relevant material. In addition, law firms have a preference for paper rather than the lab bench! While this process is one of looking back in time, it is more than possible that concepts found will resonate with current R&D, such as where work undertaken some time ago, at a prototype or project level, was abandoned because of inadequate or uneconomic computing power at that time. There are many examples of such technology applied today and now available to consumers at modest prices.

Prior art that invalidates a patent can be considered to be of comparable value to the destroyed patent, but is likely to have cost a defendant much less to acquire and deploy. An alternative would be to buy a patent with a similar economic impact on the asserter, but the cost of that is likely to be far greater than prior art invalidation. Evidently, prior art has real value and its ownership distinguishes defendants to their advantage. Looking to the future, perhaps prior art pooling may be a defence weapon of choice.

Peter Spours is an independent IP strategy consultant and was formerly chief IP officer at TomTom

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