Patents always start out well-intentioned. Companies tell their employees, “We just need a few good patents for defensive purposes. If someone sues us, we need leverage.” Sadly, there is truth to this.
But patents last for seventeen years and the average start-up does not. So, once the company gets into financial trouble, those innocent ‘defensive’ patents can turn into funding to keep the company afloat for a short while longer, or worse, fall into a lawyer’s hands after the fire sale. A classic example of this is Visto, a once exciting Silicon Valley startup that never managed to quite make it ‘over the hump’. In 2005, the company sold equity to NTP (the lawyer group that sued RIM) and agreed to allow NTP access to Visto’s “defensive” patent portfolio aggressively. Visto/NTP have been filing lawsuits ever since.
If patents are indeed meant to be defensive when they are created, and all employers claim that they are, then we should create a contract which codifies this.
What if we could draft a contract, between the inventor(s) and the employer. The contract would give the company rights to the patent so long as the patent is only used for “defensive” purposes only. The patent would not be transferable to other companies. We could distribute this contract freely on the net, and encourage inventors to get their employers to sign them. Over time, hopefully the world would have a lot of “defensive” patents, but not aggressive ones. Of course, the legal definition of “defensive” is pretty tricky. Perhaps a non-transferable patent is the only feasible contract. I don’t know; I’m not a legal expert.
If you are a corporate attorney, and think this is a good idea, drop me a note.