February 18, 2002

Protecting Intellectual Property

By SARAH MILSTEIN

LAST spring Plantronics (news/quote), a telephone headset manufacturer in Santa Cruz, Calif., developed a technology for reducing microphone noise. The invention was not something the company could use right away, but Plantronics executives did not want to risk letting a competitor patent the idea first.

Rather than spend time and money to patent the idea, Plantronics posted a description of it on IP.com, a Web site that enables inventors to establish an idea's legal existence a concept known as prior art in patent law. By putting its design in the public domain, Plantronics sought to prevent competitors from patenting it.

Such disclosure, known as defensive publishing, is an increasingly common tactic for protecting intellectual property. Publishing an innovation means that competitors have access to it, of course. But many companies say the competitive risk is outweighed by the benefit of making it difficult for someone else to win a patent a patent that could give the holder the right to demand licensing fees from all other users of the technology or technique.

Many major corporations have long pursued the defensive publishing strategy by putting out bulletins or publishing descriptions of their innovations in trade journals. Now smaller companies are adopting the method, often through the Internet.

One spur to the practice of staking out claims to intellectual property was a 1998 federal court decision declaring that business processes like one-click checkout at a merchant's Web site or financial incentives for consumers to view marketing messages could be protected by patents just as physical inventions could.

But protecting intellectual property with a patent is neither cheap nor quick. Domestic patent applications, including legal and filing fees, can cost $15,000, while international filings can run to $50,000. And once issued, patents are subject to annual maintenance fees.

Then there is time. According to the United States Patent and Trademark Office, it takes an average of 25 months from the date of filing to process an application.

Defensive publishing, by comparison, can be done for a fraction of the cost and with relatively informal paperwork. Posting one document on IP.com's Web site, for instance, costs $155 and requires no lawyers.

Nearly any document that describes an innovation can qualify as publishable evidence of prior art. Brochures, conference papers and company invention disclosure forms are all fair game. The important thing in establishing prior art is to make sure that a document has a clear publication date.

Plantronics, which had $400 million in revenue in 2001, holds 63 patents and has applications pending for 75 more. In the case of the microphone noise-reduction technology, defensive publishing was simply a cheaper, faster alternative to patenting one invention that was not part of the company's core business. "We published as opposed to patenting so others cannot prevent us from commercializing the idea," said Osman Isvan, senior acoustics engineer for the company. "In fact, if our partners use it, it would benefit us because the technology works with our systems."

While Plantronics has used defensive publishing to protect just that one invention so far, for other companies, the method has become a common feature in their intellectual property strategies.

In the last six months, for example, Rich Products, a food company in Buffalo with $1.6 billion in annual sales, has responded to the rising use of patents in its industry by becoming more serious about defensive publishing. It now considers documents like conference presentations to be potentially valuable property that may warrant formal publication.

"As we've expanded from domestic to international markets, we'd go broke if we tried to patent everything we had," said Bill Grieshober, senior legal counsel for Rich Products.

The advent of searchable online databases that are available to patent examiners searching for prior art has made defensive publishing more accessible to a range of companies. "People want to have the sense that patent examiners will find their ideas, and the Internet helps," said Edward Kelly, a partner with the Boston law firm of Ropes & Gray.

Patent examiners have access to the Internet and more than a thousand commercial databases, among other resources. Each examiner is required to search only logs of previously patented ideas and sometimes specific trade journals or databases in his areas of specialization, but patents can be challenged if other inventors can provide evidence of published prior art that the examiner may have missed.

When IP.com introduced its service in September 2000, the management team thought that the Web site's primary customers would be companies with substantial research and development departments, like Motorola (news/quote) and General Electric (news/quote). But while a handful of those giants did sign on and do actively use the service, IP.com found more interest among midsize companies. So
IP.com dedicated a sales representative to companies with annual sales bwlow $2 billion.

But lately, even much smaller companies have begun using the service.

The Nutter Machine Company, a 40-person custom machine builder in Hebron, Ohio, has published one invention on IP.com a modular system for making repeatable bends in metal tubing. The publication is the extent of the company's intellectual property portfolio.

"We read about defensive publishing and thought that for this new product, publishing was the way to go instead of having somebody take our idea and patent it out from under us," said Robert Maron, product manager for Nutter. "We didn't have the market and the time to go through the patent process. The anticipated revenue didn't warrant the tens of thousands of dollars we'd have had to spend."

Despite the growing interest in defensive publishing, the technique does carry the risk that rivals will learn about a company's innovations and adapt them to their own competitive ends. "The rub is that you wonder whether or not you need to publish somewhere everyone can see it," noted Mr. Grieshober of Rich Products.

To keep competitors at bay, companies often publish anonymously, and they sometimes use vague language to describe an invention.

But if competitors are unable to find or understand an idea, there is a good chance that patent examiners will not either.

To be useful, said Mr. Kelly, the Ropes & Gray partner, defensive publications must be very carefully written. A document that did not clearly establish prior art might be ignored by an examiner who could issue a patent for an invention a company thought that it had defensively covered. "I haven't seen that yet," Mr. Kelly said, "but it's got to be coming."


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