CIPA Congress 2013 preview: the future for NPEs

The Chartered Institute of Patent Attorneys (CIPA) will have its annual conference in London on October 3 and 4. WIPR caught up with some of the key speakers at the event.

Patent trolls, non practising entities (NPEs), patent assertion entities: whatever name you call them, there’s no doubt that such companies are in the spotlight like never before. US President Barack Obama want to tackle them, so does the US Court of Appeals for the Federal Circuit, while one of the main fears surrounding the European Unitary Patent project is that it will help trolls become more prevalent on the continent.

As with most intellectual property issues however, the situation is not black and white. Certainly some of these companies act in ways that might seem unpalatable (though not yet, at least, generally illegal), but others might reasonably claim that they are providing a useful service to the market, or at the very least that they are doing no more than defending a legitimately acquired portfolio in a reasonable way. Indeed, companies that own patents have an obligation to defend them. Where the line between defence and aggressive assertion is drawn can be a matter for debate, but one of the main reasons to acquire or develop a property right is the ability to do what you want with it.

At the CIPA Congress, a panel will debate the NPE question. Nicola Dagg, partner at Allen & Overy, Gwylim Roberts from Kilburn & Strode, Gregory Corcoran from ASML and George Whitten of Qualcomm.

Corcoran, a patent attorney at ASML, equipment supplier to the chip industry, will chair the discussion. Speaking on his own behalf, he takes a neutral position of the evils or otherwise of NPEs: “I see in some ways that it’s something that refreshes the landscape, and the commercial situation so that IP can be of value, but at the same time, it’s also a point which if abused, like any legal right, can distort and disrupt the market, and that may be why we’ve seen proposed legislation and court decisions that might be causing a shift.”

Roberts identifies a spectrum of behaviour that sometimes comes under the patent troll banner, from egregious conduct to sensible business strategy. He says: “I’m talking about using the threat of litigation to attract settlements which are less than the value of fighting the case, even when the patent rights at issue don’t really cover anything. At the other end you have people who develop stuff but never have any intention of doing it themselves because they don’t have the manufacturing capability, and licensing them to companies to do the leg work for them. That’s perfectly legitimate behaviour. “

He warns of the risk that legislative action, designed to target the worst troll-like conduct, could inadvertently cover businesses that are operating in a useful, productive way.

“‘There needs to be work on defining what is and isn’t acceptable,” he says. “For me, it might come down to going back to public policy and looking at what the patent system is designed to do.”

Dagg identifies a key issue in NPE litigation. “If the party that commences the piece of patent litigation is an entity that the defendant can’t really bite back with its own portfolio, because the claimant has no real business to go after, that is where I think the biggest imbalance arises,” she says.

Dagg is looking forward to an “open, frank discussion about non-practising entities, looking at the big issues there and how they impact filing strategies. We will also be looking at enforcement and NPEs – we will be looking at the availability of injunctive relief to NPEs, contrasting the position across the world.”

In the US, Corcoran points out, some states such as Vermont have pre-empted possible federal efforts to legislate for trolling by introducing state laws to cover the behaviour. In Europe, as Roberts points out, the answer may be encouraging judges to use their discretion when it comes to injunctions and possible groundless threats suits. The difficulty there of course, is knowing when a judge is likely to use their discretion, and groundless threats suits have their own costs for companies who might well be wary of going to court at all. It’s a knotty problem, especially since many companies that can’t really be described as NPEs at all sometimes engage in conduct similar to NPEs, whether that’s small companies licensing their patents through larger entities, companies like Qualcomm leveraging their patent portfolio in litigation and licensing efforts, or the Nokias and Microsofts of this world divesting patents to NPEs which then go on to assert them.

Alongside this panel, the congress will also hear about the future of 3d printing and its implications for intellectual property, as well as litigation strategies for the proposed Unified Patent Court in Europe. Keynote speeches will be delivered by Viscount Younger of Leckie, the UK’s intellectual property minister, Professor Ken Shalden from the London School of Economics and Neil Feinson of the UK Intellectual Property Office.

The CIPA congress takes place at the Lancaster London Hotel on October 3 and 4.