PARLAY PATENT INFRINGEMENT INTO PROFITS.

• Author: Murphy, Tim
• Position: BUSINESS & FINANCE

ACCORDING TO the Seyfarth Shaw LLP report "Patent Litigation: A Statistical Overview," the past five years have seen a "significant increase" of litigation cases filed with the Patent Trial and Appeals Board and the Court of Appeals for the Federal Circuit. Moreover, the U.S. Patent and Trademark Office published its own report, citing a "drastic rise in patent litigation" that also referenced a USPTO working paper revealing that "economists, legal scholars, and policymakers are concerned about the impact of patent litigation on the rate and direction of U.S. innovation and on the functioning of the U.S. intellectual property system."

It is clear that patent infringement is alive and well in the U.S., most often to the financial dismay of patent-holders who spend untold hours and egregious sums of money trying to protect their intellectual property--and the marketplace edge often reliant on those assets.

However, what if rather than issuing the knee-jerk cease-and-desist letter and otherwise going the exhaustive and expensive litigation route attempting to prosecute inadequately responsive offenders, patent owners instead strategically engage said offenders in ways that actually boost their own bottom lines, accelerate growth, raise capital, and expand market share? While this might sound like a farfetched notion, it is exactly what we are doing at Rebounderz Family Entertainment Centers--and with tremendous success.

Having serially found ourselves in situations where other competitive businesses were utilizing industry-leading materials and methodologies for which our company held patents, we decided that, rather than litigating with the sole intention of shutting down the offenders--or, at the very least, their use of our intellectual property--we adopted a strategic partnership mentality, enforcing our patent rights in a way that is earning our company significant ancillary revenue streams and hastening corporate growth.

Here are a few suggestions on what it takes to parlay a patent infringement situation into profits:

Strategize ways to near- and long-term monetize. Create new opportunities together in a joint venture or strategic partnership. New services, additional product lines, and spinoff businesses can be created to benefit both parties. Just because an entity has infringed on a patent does not mean that they want to or intend to continue infringing in the future or that they are unscrupulous.

Clearly lay out a plan that is...