Monday, March 7, 2011

Patent Privateers: a new strategic approach

Well ever heard of this term " Patent Privateers". Seems interesting isn't. You must be wondering which is this new strategy on the block. Here is the answer, Patent Privateering is another name for outsourcing your Patent litigation in a secretive manner.Let me elaborate it before it becomes a scrabble game for you. Patent Privateering  is another strategic IP issue and its not that this is a recent development, it's been in existence for almost a decade and probably growing by now. Patent Privateering is simply contacting a firm or licensing organization and offering them finances and monetary aids( like attorney's fee, litigation finances, target's countersuits etc) to invest in patent litigation. I came up discovering a very interesting article on "Patent Privateers" by Tom Ewing (which can be accessed here). Ofcourse this article has enlightened me regarding Patent Privateering (worth reading).

To make it simple, there are two entities here, Sponsor and the Privateer. Sponsor is always in the stealth mode here (working behind the scene), never exposed. Sponsor's basic aim is to provide you ( the privateer) with the monetary aid and target his competitors for patent infringements. A privateer, objective is simple, he is aided  and monetarily insured by the sponsor. Privateer's main objective is to gain money out of the litigation suits, on the other hand, a sponsor's aim is not the immediate monetary gain but he owns farsighted policies leading to financial gains, brought by privateer's litigation.

  Meanwhile, there are many ways and tactics, by which sponsors operate, one of them is by selling their own IP rights to the third party and thereby causing the third parties to cast litigation suits against the competitors. But this method doesn't give much secrecy to the sponsor. Other methods include, creating Limited liability companies ( by the sponsors) to cover privateer's litigation costs and this method gives much secrecy to the sponsor (good for him!). Well many methods and many tactics, but the crux of the argument is, Patent Privateering has its own flaws and gains, its up to us how we look at it. But one thing I can say surely it is another potent IP strategy on the block!

(Image Courtesy  Link)