DALLAS (Legal Newsline) - The head of a Dallas-based patent licensing company says there is very much a need for a set of established licensing practices.
David Pridham, CEO of Dominion Harbor Group, which launched in November 2013, said adopting and sticking to a list of “best practices,” such as those recently developed by Silicon Valley cyber security company Finjan and his own company, could help in eliminating the bad behavior exhibited by some non-practicing entities.
“I think if what Finjan and what we’ve proposed was adopted universally, there would be no need for further legislation,” said Pridham, who in the last 15 years has negotiated more than 500 intellectual property agreements, including licensing and patent purchase agreements.
“Litigation also would be way, way down.”
Dominion Harbor, which established its list of best practices soon after its launch, is among the many reputable licensing companies that oppose patent litigation abuse and additional legislative reform, including much of the bills introduced this Congress.
Pridham argues that the line between legitimate and abusive patent assertions simply needs to be made clearer, which is where best practices come in.
“It is our view that all interested parties -- licensors, licensees and their respective representatives -- must adopt a self-imposed, rational approach to licensing and, when necessary, litigating intellectual property rights,” the company states in its principles.
“We have the opportunity to put an end to the unintended consequences and collateral damage that patent reform has caused and threatens to continue to cause.”
Pridham, an attorney himself, contends lawyers are the only ones getting rich.
“It’s not about what a patent is or what it’s covering or what an inventor invented anymore,” he said. “It’s about who has the most money and the most resources.
“What we need to do is get to a place where licensors and licensees can figure out in a rational manner how much a patent is worth.”
While Pridham admits there are some things that could be fixed through legislation, for the most part, the system should be left alone.
“The patent system in America was developed by the Founding Fathers in order to get away from the British system,” he explained. “In their system, the bigger the company, the easier it was to get a patent.
“Things like the Innovation Act could bring us closer to the British system. We’re actually moving backwards.
“(Lawmakers) are wiping away the ability of small companies to develop innovation.”
One of those lawmakers, U.S. Rep. Thomas Marino, R-Pa., said he’s on board with the idea of licensing best practices. Marino was one of the dozens of lawmakers Finjan reached out to after adopting its standards.
But Marino, one of the more conservative members of the state’s delegation, said he doesn’t think it’s the end-all, be-all answer to the so-called patent “troll” problem or the great compromise lawmakers are searching for; however, it is promising.
“I think the proposed best practices are a good step forward and could cut down on the high volume of frivolous litigation,” he said. “However, there are unfortunately too many bad actors out there who are profiting from litigation abuse, and that is why we need strong legislation to rein in the abuse. We have got to start checking what has gone unchecked.”
That being said, he doesn’t think the situation is too far-gone that a set of principles wouldn’t make a difference.
“Clearly we have got to employ multiple tactics to even begin fixing this issue, so moving more than one approach forward at once can be effective,” Marino said, noting he is still very much interested in passing patent reform legislation.
“The absence of patent reform is like the absence of sunlight in a forest. The light is necessary for growth and renewal just as smart, meaningful and commonsense legislation is necessary to fuel the innovation engines of a modern, competitive and prosperous America.”
Marino said he wants to see greater transparency and clarity in the information included in demand letters.
Specifically, he plans to put forth a measure that would prohibit an entity from claiming the opposing party engaged in “willful infringement” if the petitioner did not list the adequate information in the demand letter.
“What I am asking for is simple and reasonable: basic information like the patent number for each alleged infringement, and information pertaining to the identity and location of the rights holder,” he explained.
Marino said he also plans to put forth a measure to reduce “excessive” discovery requests by requiring the petitioner put up a bond to cover the costs of requests.
“These excessive discovery requests are nothing more than an abuse tactic that drives up the cost of litigation and is often times unnecessary,” he said.
When asked for its take on the idea of licensing best practices and possibly establishing a similar set of standards, the U.S. Patent and Trademark Office declined to comment.
A spokesman for the PTO said the office could not comment on “third-party ideas.”
From Legal Newsline: Reach Jessica Karmasek by email at firstname.lastname@example.org.