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Doug Nebeker ("Doug")
Hi guys, I'd like your input on how would YOU proceed if you were in my place. I'll try to give enough relevant information, but sorry I'd rather not say exactly what I'm doing and who I'm up against.
I'm building a novel business type of application for a desktop computer which solves a common business problem, but in a new way and more effectively than anything else that exists out there.
The problem is that a big famous multi-billion computer company has patented the idea in the US more than a decade ago. However this type of app is not within their speciality, so I guess that's why they never implemented it and probably never intend to.
Their patent is what I believe to be a purely future racketeering patent, they're not protecting any of their own products, and I wouldn't give them a single cent because there's nothing useful for me in their patent description.
I initially developed the barebone version of my app strictly for my own in-house use and now a few years later I'm building the full blown version according to how I believe it should work and solve the problem, again their patent is not useful to me at all and I only found it after I had already built and used the barebone version myself for years.
Also there already are open source and commercial applications which partially solve the problem I'm solving. What my application is implementing can be summarized in an old wish message I read from some user on some forum. It goes something like this:
"I wish the open source app X supported features Y and Z."
So this wish message is basically the whole patent, although it's written in hard to understand legalese on many pages, it can be stated in one sentence with a dozen words only and it obviously patents an idea, not an implementation. However the idea it patents is not something generic (like Apple's rounded squares) or something that every program out there already violates. At this moment no application exists that violates this patent.
And building features Y and Z for an application like X is not something easily done, there already are some crappy hacks that kinda do it, but they're so clumsy and ineffective that hardly anyone uses them.
That's why I'm developing a new commercial application from scratch that tightly integrates the features X, Y and Z (without needing the open source app X) and is by orders of magnitude more effective than app X is by itself.
Btw I still haven't announced my app to anyone (I know, I've heard that you should talk to users before building it), and I also still don't have a company and I haven't decided where will I base my business if it's successful one day. I also haven't decided on the price of the app yet, but it will be either a 2-digit or a 3-digit price in dollars.
If successful, my app should accumulate a 7-digit or 8-digit dollar amount in a few years and I'm comparing this to already existing commercial apps inferior to mine. I know this is just wishful thinking right now before I've even launched, but I'd like to know what I can expect (i.e. attempts for money extortion through patent litigation).
I'm a citizen of and live in the European Union, but I'm willing to relocate almost anywhere in the world if it will be needed one day (i.e. not only for patent reasons but also for tax reasons).
So my basic question to you guys with much more experience than me is how would you proceed with launching the application if you were in my place?
A few specific sub-questions I have are:
1. Will I be able to sell my app from Europe to the US at all? Or will I have the whole world available except the US?
2. What will the big company be able to do against me? If I don't sell in the US can they still call my webhost and my payment processors (Paypal, Visa, Mastercard, etc...) and have them ban me with a mere accusation?
3. Will the big company be able to start legal action against me outside the US? Btw this company has presence in just about every industrialized country in the world.
... etc ...
If the invention is only patented in the US then you can sell your software in other countries but not the US. Or you could wait until the patent expires and sell everywhere.
If you start selling this application and it is wildly successfully then big corp may remember they have the patent and start selling their version in the US (and everywhere else too). This seems a bit unlikely, but alternatively they may have already been developing an application on the back burner but it's never been published - they are a big company after all. Your application might show that there is a business case for them to push the publish button.
Big companies trade patents all the time so if you try to fly under their radar you could find some patent troll coming after you. You might even receive a C&D from a 3rd party who "kindly" notifies big corp in order to get some of their business.
The best solution would be to look for a way around the patent. I know this is easier said than done. In case it's not clear, I mean invent a better/alternative technique that doesn't use their invention.
I think you might underestimate your competition; surely the reason they don't have this killer feature is because of the same patent ?
> Their patent is what I believe to be a purely future racketeering patent, they're not protecting any of their own products
Aren't they all ? Have you heard of a defensive patent ?
> I wouldn't give them a single cent because there's nothing useful for me in their patent description.
It was designed that way by their patent lawyer.
> At this moment no application exists that violates this patent.
Maybe because of previous legal action ?
> Btw I still haven't announced my app to anyone (I know, I've heard that you should talk to users before building it)
This must be your first visit to BoS.
> If successful, my app should accumulate a 7-digit or 8-digit dollar amount in a few years
How do you know this if you haven't even spoken to potential customers and don't have a single customer on your books ?
Tread carefully. You've just documented publicly that you are aware of this patent. Infringing on someone else's patent can get you sued, but willfully infringing on a patent can get you sued with treble damages -- this means the patent owner can seek 3x the actual damages they feel are justified.
Form an LLC ASAP. Otherwise, you could lose your house.
Wednesday, January 28, 2015
It's harder to bring legal action against people in other countries, but given the company has an international business presence, they are likely set up to hassle you wherever you are.
I would find a way to avoid the patent, or if you must have it, negotiate a license.
How sure are you infringe?
Patents are written in a highly specific dialect of legalese. Unless you are a lawyer familiar with the specific dialect used in patents (i.e. a patent lawyer), you may be misinterpreting the patent, or what it covers.
That said, the solution is to get advice from an actual lawyer, rather than a forum. You could start with a more general lawyer, asking about "my product might infringe", and then if necessary get a specialist patent lawyer to help determine whether you actually infringe, and if so, whether you can take steps to not infringe.
Wednesday, January 28, 2015
Tanna makes a good point. I've seen it done where a company knows it infringes and they get a lawyer to construct an abstract argument why it doesn't infringe, using reasonable arguments, and put it down in a thing called an opinion letter. This is filed, and when or if they get sued, this letter 100% of the time prevents treble damages because they were relying on the capable advice of a licensed attorney specialized in the particular field of law.
As you wont give us any concrete details about your product or the patent, there is little we can do to help you.
So generally you should do basic things like check if the patent is valid and find it's extent: search for "prior art" before the date the patent was filed; confirm that the patent is non-obvious; check that all of the claims are valid; find out what exactly is being patented (it may not be the thing you think is and will be defined by what the claims say) etc
You can head over to sister site "Ask Patents" at:
which has useful info about what is prior art and how to find it and "how to read a patent in 60 seconds". They might be able to help you find prior art if you ask a question there.
If you find that the patent is valid AND it patents the thing that you want to do then you generally can still create your software so that it does not infringe on a patent! If it comes to this you should get some real legal advice from an experienced commercial lawyer with experience in intellectual property law (you must ask the lawyer directly how much experience they have in this area and if they dont have much then go somewhere else). You would present them with details of the software you want to create and the patent and they can tell you which parts to change so it does not infringe on the patent.
a few basic realities:
1. Payment processors take very seriously cease and desist letters, especially from law firms armed with a patent.
2. You need a IP attorney to navigate this for you. Google "find an IP attorney + your country".
3. Before you spend money on said attorney, you need to validate that your idea, as you wish to actualize it, actually has a market.
Wednesday, January 28, 2015
Thank you guys for your answers, your advice helped me a lot and I really appreciate. I spent all day researching a lot of patent related information and how it might apply to my case, and LUCKILY I found a simple piece of info that saves me completely:
The patent application that troubles me has been abandoned more than 5 years ago. I logged into the uspto.gov website to see if I can find whether there have been any infringes and litigations on this patent before, and I saw the status of the patent as: "Expressly Abandoned -- During Examination".
A little research on whether an abandoned patent can still come to haunt me later shows that the patentee can revive it for about $2000 claiming the abandonment was "unintentional" (without the patent office demanding proof it really was "unintentional"), and whether he can come after me after the revival there are differing opinions:
1) He can't legally demand royalties from me if the infringement was started while the patent was abandoned (according to this link: http://www.avvo.com/legal-answers/can-i-get-a-royalty-for-an-abandoned-patent--1529714.html )
2) He can still take me to court for infringement and it will be my burden to show that the reasons for his abandonment were not really "unintentional" (according to this link: http://hanseniplaw.com/can-you-revive-your-abandoned-patent-application-%E2%80%93-petitions-to-revive/ )
If anyone has anything useful to add about reviving an abandoned patent to collect royalties, I'd like to hear about it.
I'll also go through some of your replies one by one.
>I would find a way to avoid the patent, or if you must have it, negotiate a license.
Avoiding the patent was impossible, it had too many claims and as long as I used "program code" and "computer memory" to implement feature X, Y and Z in a single app, I'd be violating their patent. Plenty programs exist that implement only one or two of those features, but if I dare combine them all three, I'm infringing it.
And without all three features integrated in a monolithic application I lose the competitive advantage completely, integrating all three is orders of magnitude harder than doing only one or two, but with one or two my app would be no different than the 50 mediocre apps already out there.
Before finding out the patent was abandoned I had already started researching about royalty rates for software patents, found they were between 0-50% and typically 10%.
With the state of all the software patents out of hand, it feels really painful to have to call a big company which has not helped me in any way to ask them how much tribute they want me to pay them so they'll leave me alone to do my business.
I really feel for all the people and businesses that were ruined or paid heavily because of unjust patent cases which should have never existed.
Does the patent office pay any penalty when it's later proven in court that a patent should have never been issued?
> ... and "how to read a patent in 60 seconds" ...
This is a very helpful information, I never knew there are tutorials on how to read patents and that it was possible to evaluate a patent in a few minutes (at least superficially). Also a great tutorial I found and I like is this one: http://www.bpmlegal.com/howtopat5.html
>How sure are you infringe?
Patents are written in a highly specific dialect of legalese. Unless you are a lawyer ...
Almost certain, initially I had based my assessment mostly on the abstract of the patent, but after @Billy's advice I carefully read the claims and it still appeared that I would clearly infringe if the patent was still valid.
Plus I'm starting this with a very low budget, I definitely wouldn't be happy to have to spend thousands of dollars in legal advice before I've earned anything from my product and it's not even certain I'll earn anything.
Talking about artificial barriers to entry in an industry...
>Payment processors take very seriously cease and desist letters, especially from law firms armed with a patent.
Yup, this one was the scariest one, even thou they don't have a legal right to enforce US patents into other countries, I certainly don't expect them to be guided by any moral sense, neither the big company nor the payment processors.
And I don't think many buyers would be willing to go through the hassle to obtain bit coins to pay me.
>Before you spend money on said attorney, you need to validate that your idea, as you wish to actualize it, actually has a market.
I'm very aware I'm skipping what is probably THE most important step for assessing whether an idea has a potential, however not even I myself could have foreseen how much I'll get used to and love my own app before I actually started using it. It's not something impressive when you explain it, however the workflow is that which is so convenient to use and nothing existing comes even close in convenience. Consequently it will definitely need to have a free trial period to persuade anyone to open his wallet.
And even if I don't succeed with it life will not be over, I'll still be able to reuse the skills I've gained building and launching my own app in my future work.
>Someone, please reassure me that this doesn't actually happen?
An even scarier thing I was afraid of was that they might request from Google not to index my website, in that case even if someone was willing to send me a bank check or bit coins for my product they couldn't because they wouldn't know I existed.
I cannot be sure it is a good concept until I've succeeded, I have high hopes for my project but I must also be ready for a total failure, so spending $20K for a patent right now is out of the question.
And the full blown version is not something easy to recreate, although if it does become successful I'm certain that simplified versions will pop out soon...
> If the concept is as good as you claim, maybe now is your chance to patent it for yourself.
The invention had a patent applied for and abandoned; the details are now published for the OP to find; therefore the invention is now in the public domain - you can't patent it, the prior art is the abandoned patent application.
You kind of missed a key part of my point: IMHO s lay person's interpretation of what a patent covers is worth next to nothing. So unless you have had either a formal education on reading patents, or read an awful lot of patent law books and cases, I would say don't trust your own judgement about whether or not you infringe.
There are highly specific formal ways of interpreting what they mean and cover (not everything discussed in the patent document is protected by the patent). Terms don't always mean what they mean in common language or in engineering, etc.
If you have the knowledge, or have a lawyer who does, then you/he would be able to go through line by line, with a fine tooth comb, to interpret what the patent really means. It often does not mean what a casual reading of the abstract by an engineer, thinks it would mean.
I've seen numerous news stories, and long comment threads at slashdot, reddit, and various tech sites, where specific patents in the news have been misinterpreted in this way. I don't know about patents, but acknowledge that. Far too many engineers think because they know tech, they can interpret a patent, they almost always can't., at least not without help.
Friday, January 30, 2015
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