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Best Defense For Small Innovators Is A Substantive Patent Portfolio

If you have been following the news about patent infringement complaints filed against tech giants, something interesting might have caught your attention. Within a span of a couple of days, each of Facebook, Google, and Apple were hit by patent infringement suits filed by companies that allegedly were in either a technology development partnership or were having technical discussions with the larger counterpart previously. The general pattern is one where the smaller rival in each case alleges that the large competitor was evaluating their technology under an NDA for possible cooperation but then copied the patented technology once they got a peek under the hood – without paying for tech transfer or taking a license to the patents. There is no way to know just yet what the underlying facts are and how the three suits may conclude. It is, however, a reminder that this type of thing is not rare, and moreover, reliance on NDAs alone to preserve critical information is not an effective strategy.

Below is a broad stroke summary of the three cases as described in the complaints.

Sonos, Inc filed a patent infringement complaint against Google on January 7th alleging that the two companies had a partnership for integrating Google Play Music into the Sonos platform and that Google has learned about Sonos’s wireless multi-room technology during that partnership in 2013. The complaint further alleges that Google has misappropriated Sonos’s technology and incorporated into Chromecast Audio and numerous other Google products starting in 2015 despite warnings from Sonos that it is infringing on Sonos’s patented technology.

On the same day, January 7th, Voxer, Inc filed a patent infringement suit against Facebook and Instagram. In the complaint, Voxer describes that the co-founder of the company had served in Afghanistan in the wake of September 11th terrorist attacks where he saw shortcomings of the existing communication technology. Later, he and his team developed the Voxer Walkie Talkie app in 2011, which was named Best Overall App and received an award in 2013. Voxer alleges that Facebook approached Voxer about a potential collaboration in 2012, and during discussions, Voxer disclosed its proprietary technology and its patent portfolio to Facebook. Voxer alleges that Facebook subsequently revoked Voxer’s access to key Facebook components and launched its own Facebook Live and Instagram Live features in 2015-2016, which Voxer believes infringe Voxer’s patent portfolio.

Masimo Corporation filed a patent infringement case against Apple on January 9th. Masimo describes in the complaint that it developed a technology for non-invasive monitoring of physiological parameters, such as heart rate, arterial oxygen saturation, and many others, and that Masimo developed other advanced technologies that are in use at hospitals and save lives of patients including infants. Masimo also describes that it has an established Trade Secret Program to safeguard its technologies. Masimo alleges that Apple contacted the company in 2013 for potential collaboration and to integrate Masimo’s technology into Apple’s products. After that, the complaint alleges, that Apple started hiring key executives and key employees from Masimo and employed them in its own efforts to develop similar technologies as that of Masimo, and moreover, the same employees started filing for patent applications on behalf of Apple shortly after. Masimo alleges patent infringement by Apple and it also challenges inventorship of Apple patents.

As stated in the beginning, there is no way to know the underlying facts in these three cases or how they may be resolved eventually. The important thing to note is that such cases do happen. In the absence of a substantive, well-planned, well-prosecuted patent portfolio, there is very little that any company can do if it believes its technology is being copied or misappropriated by a competitor.

Non-disclosure agreements are a pre-requisite in any exchange with a potential partner or a competitor, however, you can trust an NDA as much as you can trust the person signing it. In other words, NDAs keep honest people honest. It is notoriously difficult to prove a violation of an NDA with intent, and equally difficult to receive damages awards for the same. Patent protection, however, is always a good defense. However, an effective patent portfolio does not materialize simply because patent applications are filed. An effective patent portfolio can only be built through expert oversight of the invention collection and patent filing, as well as ongoing expert management of the portfolio. As innovative companies embark on commercializing their technologies and build commercial partnerships, it always pays to have an air-tight defensive patent portfolio.

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