Ex Parte Reexamination and NPEs – Speaking Softly, Big Stick!

As recently detailed by Gene Quinn at IPWatchdog.com, Sony has partnered with Article One in order to better defend itself against what it calls “low quality patent assertions.”  Gene gives an excellent description of the services provided by Article One.  However, no matter how excellent  a research firm may be in combing through patent and non-patent literature, when an alleged infringer has their damning reference in hand, the question remains, what now?

 

Non-Practicing Entities (or NPEs for those into the whole brevity thing) have been the target of much derision and venom, with some being more deserving than others.  While not debating the merits, or lack thereof, of NPEs, the fact remains that they are asserting patents that are presumed valid, they have the right to do so, and they are (for the time being) not going away.  A neighbor of mine recently recounted his own encounter with a cease-and-desist letter, and how, after paying a settlement, had a bad taste left in his mouth.  However, being the owner of a small company, settlement was the only viable option for him.  By and large, patent litigation is simply not an option for start-up business owners like my friend.  The immediate demand for cash associated with defending against such a charge is simply out of the question by no fewer than one order of magnitude.

I freely admit that this is armchair (well, couch) business owner-ing, and my chutzpah might be diminished if I were making the decision, but I think ex parte reexamination, coupled with a search firm such as Article One, may be the answer for someone with the will to fight, but not necessarily the means to litigate.  I can quite clearly imagine a scenario where, after receiving a C&D, a search firm is retained and digs up prior art casting doubt on the validity of the asserted patent.  Suddenly, the pursuer becomes the pursued.  The last thing an NPE wants is to have to defend their patent’s validity, at least until they are playing ball with heavy hitters.  Even then, this strategy appears to have gained favor.  And the fee for ex parte reexamination, currently $2,520, while by no means cheap, pales in comparison to the expense of litigation, and after accounting for the risk of the patent’s validity being maintained, may very well be a good option for a feisty target of an NPE.

Mostly, I think ex parte reexamination offers a third option to litigating and capitulating.  It’s a way for the not-so-big guy to assert himself without breaking the bank.  It offers the chance to stand up and fight for what he believes is right in an otherwise grim situation.