Chip Law : Semiconductor Lawyer & Attorney : Perkins Coie Law Firm : Intellectual Property, Patent Litigation

When conducting an infringement threat assessment in your industry, don't write off the foreign companies. Foreign companies can and do file in US courts, whether against domestic or foreign competitors. As the US market becomes more competitive and foreign companies become more sophisticated, a greater diversity of plaintiffs' country of incorporation can be expected.

Japan-based Nichia Corp. filed a patent infringement lawsuit against Chinese solar products company Jiawei North America Inc. The complaint was filed in, of all places, the U.S. District Court for the Eastern District of Texas. Nichia alleges that Jiawei has infringed four LED-related patents.

This is not the first time Nichia has been to the Eastern District of Texas. Previously, Nichia settled two lawsuits filed by Seoul Semiconductor Co., also involving LED patents. It would appear Nichia now has a taste for Texas.

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The Senate today confirmed the appointment of IBM's David Kappos to the position of Director, USPTO.  It is likely that Mr. Kappos will overhaul aspects of the USPTO's practice.

Judiciary Committee Chairperson Committee Chairman Patrick J. Leahy (D-Vt.) issued a statement that he looks forward to working with the new Director on patent reform.

See prior blog entries on Kappos' signals and IPReview article.

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Just how do you figure out how much a patent is worth?  Valuation of a patent portfolio may be useful when, among other things, an entity desires to:

• determine whether to pursue a patent application;
• evaluate a company's value (e.g., for merger, acquisition, or stock price); or
• estimate damages.

The value of a patent can depend on a multitude of factors including but not limited to: 

• breadth of a patent claim;
• scope of the patent claim given up during prosecution;
• validity of the patent given changes in patent laws;
• price customers would be willing to pay for a product embodying the claimed invention;
• license fees paid for similarly important components;
• costs to substitute the claimed technology with an alternative.

Often, the value of a patent is not publicly known because parties often settle matters out of court.  Other times, the value of a patent becomes abundantly clear after a blockbuster court case.  For example, a jury recently awarded nearly $1.7 billion to Johnson & Johnson, whose patent the jury determined was infringed by Abbott Laboratories' drug, Humira.  Abbott Labs plans to appeal the verdict.

What's even more interesting is that a patent can be worth nothing to one party and worth quite a bit to another party.  I have seen companies overpay for patents where they desperately need the patent as leverage against a competitor.  In that case, the patent is worth a lot to that particular company, but much less to another third party.  

There are also situations where a company will overpay for a patent to "complete" their portfolio and have an airtight lock on a technology. 

But I think what it boils down to is that a patent is worth whatever you can get someone else to pay for it.  Simple, but true. 

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To be safe, you probably want to avoid doing anything involving a registration number while under a protective order against prosecuting patents. On the other hand, you probably want to regularly check the prosecution history of relevant cases when a similar protective order is in place against an opponent.

SiRF Technology Inc. moved for sanctions against Broadcom Corp., claiming a McAndrews Held & Malloy Ltd. attorney representing the semiconductor manufacturer violated a protective order. Wayne Bradley, the attorney, signed a terminal disclaimer in one of Broadcom's patent applications after the protective order was in place.

The parties dispute whether Bradley's action violated a protective order barring Broadcom's attorneys from prosecuting patents related to the litigation. Broadcom argued that Bradley's action was not barred by the protective order, nor did it harm SiRF. Signing the terminal disclaimer was “... an administrative task ... in no way related to substantive 'prosecution' of a patent or the scope of the claims.”

Bradley signed the protective order, which a magistrate judge approved in October, on Dec. 2, 2008. The next day, Bradley submitted a response to a USPTO office action concerning the application, adding over 100 new claims, SiRF alleges. On Dec. 9, Bradley inspected SiRF's source code, according to the brief.

In March, Bradley received a call from the patent examiner asking him to sign the terminal disclaimer. Broadcom argued that the Dec. office action response finished his involvement with the application, and Bradley did not access SiRF's protected information until a week later.

The case is Broadcom Corp. v. SiRF Technology Inc., case number 8:08-cv-00546, in the U.S. District Court for the Central District of California.

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