Friday, 25 July 2014
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Dyson's patent attack is flawed

Dyson

James Dyson claims that defending a patent can cost £3million

Speaking at a recent incubator event for start-ups, Sir James Dyson warned that patent applications and renewal fees are too costly and called for the system to be simplified. He also claimed that the cost of litigating to defend a patent can amount to £3 million — a big number in anyone’s language. The problem with this kind of headline grabbing comment is that the big number is all that anyone remembers regardless of its accuracy.

Before delving into the detail behind the vacuum cleaner entrepreneur’s comments, it is worth remembering that patents provide their owners with a legal monopoly - otherwise anathema to commercial competition. As such, society requires high standards to be applied to those seeking such monopoly protection. That is why the process is exacting. Careful examination of the merits of a patent application costs money.

While I agree that patents are not inexpensive and seeking this type of intellectual property protection should always be approached carefully, based on a clear appreciation of the market value of the invention, the system used to protect such rights is accessible.

‘Patents provide their owners with a legal monopoly, and society requires high standards to be applied to those seeking such protection

The patent office fees for pursuing a patent application are low - subsidised by Mr Dyson’s hated renewal fees. So which is better - higher up front costs with lower renewals or the present arrangement? Renewal fees have a dual effect - firstly they generate valuable revenue for the patent office allowing reduced filing costs and secondly they encourage patent proprietors to release older technology into the public domain by allowing those patents to lapse.

So what about the £3 million question? In the UK, the Patent Court system was modernised two years ago in a bid to make justice easier to access for small and medium-sized businesses. This is making a difference and is going a considerable way to convincing smaller companies that protecting their innovations is a good idea.

Under the amended system, court procedures require the claimant to give much more information about the case they are bringing up front. This will enable the court to reach a decision more swiftly. Importantly, the costs that can be recovered from the losing party have been capped at £50,000 and a further cap on the damages that can be awarded was set at £500,000 last year.

The context of Dyson’s claims needs to be examined. He is typically involved in High Court litigation between multi-billion pound corporations where the value of the case is in the tens or hundreds of millions. In such cases, it is obvious that both parties will deploy the best resources available to win the case. In fact, patent cases at the Patents County Court are typically run for approximately 5% of Mr. Dyson’s frightening £3m. Now I accept that is still a big number for many SMEs but it is within reach. Finally, there is the claim that only 18% of cases are decided in favour of the rights owner. I’m not sure where that figure comes from but analysing only decided cases ignores the hundreds of cases which are commenced each year but which settle before trial and the thousands that don’t even get that far because the infringer surrenders without the need to issue a legal claim.

‘Patent cases at the Patents County Court are typically run for approximately 5% of Mr. Dyson’s frightening £3m

The system isn’t perfect but good progress has been made in recent years to increase access to the IP system for SMEs. Instead of putting off small and medium-sized companies from seeking advice about intellectual property, business leaders should be persuading them that this is an essential part of running a successful R&D-led business and failing to seek patent protection could end up costing them dearly.

Dave Croston is a partner and patent attorney at Withers & Rogers - one of the UK’s leading firms of patent and trade mark attorneys.

 


Readers' comments (12)

  • We would expect this angle from an attorney. For some balanec consider the ideas being shared here: How Patents Stifle Innovation http://newmatilda.com/2012/09/07/how-patents-stifle-innovation

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  • It is all well and good saying that these things cost less, they probably do generally but if you have something worth protecting from the big corporations it does boil down to the size of your fighting fund and if the big guys do their business they will realise that you will run out of money before they do.

    It could be years of grief and anxiety all to find that a judge believes that you don't have a claim.

    Additionally, I have yet to hear of any successful claim being pursued in the Far East, more specifically China.

    Patents are only any good for 1st world country protection and then only if you have a fighting fund and are prepared to use it. But any lawyer will tell you different.

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  • European patent renewal costs are ridiculously expensive when compared with US renewal costs. Given the comparative size of the markets, this seems unreasonable.

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  • Best patent advice I ever had was – work on your idea in secret, research (online) to see if it’s a new concept, get it all drawn up & written down, when you’re completely satisfied post it ….in the shredder …and forget about it !!!

    That way you have the satisfaction of coming up with a new idea & none of the costs or heartache that fighting infringements brings.

    I’ve had several patents, as a micro company it cost a huge percentage of our profit to jump through all the hoops but at least I was "protected", until I found a large multinational using my ideas (having read how to do it from MY patents).
    So off to the patent lawyer, who been paid £1000s, only to be told “they are too big to fight & they will keep you in the courts for yrs, it will cost £1000s more up front with no guarantee of success.

    Am I cynical, bitter & twisted… YES

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  • SNAFU again..

    Clicking on 'Sabre' gets me Dyson of the plastic vacuum cleaner

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  • Apologies - please try this: http://www.theengineer.co.uk/news/the-engineer-qa-sabre/1014054.article. However, we've now closed questions to the Reaction team.

  • Sir James is correct. Million pound patent suits are not always between multi-billion pound organisations. A medium sized business can be ruined by a patent case brought by a larger rival. If a smaller company is accused by a larger one of patent infringement then the smaller company has to prove its innocence. It can cost hundreds of thousands of pounds in legal fees and in patent cases costs are very seldom awarded against the larger accusing party.

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  • To patent your innovation does not pay !

    Not only is the patentee not protected completely, it also takes to long and costs to much.
    Just look at the recent Apple vs. Samsung. No clear winner, the people who have won are the lawyers and the patent office.

    Direct experience as proved it only takes just one country that as not granted a patent and your investment is lost. You will find your design as been reversed engineered, and is in production and sold under your nose. While you pay the patent office to complete their search. It destroys innovation while really good designs never surface, because of the stupid fear that someone will steal it.

    Designs and trends change extremely fast there is very little point in trying to protect a design that will be most likely outdated anyway very quickly. The best strategy is to be the best in marketing and be the world leader. If a claim arises then the onus should be that they can show cost of marketing and dates simple ! Oh and do they have a working design.

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  • Dave is someone who's done a lot of work with startups & SMEs, and it's wrong to paint him as a "typical attorney" interested in protecting big company positions. His key point is that changes made a couple of years ago have made things (a bit) easier for the smaller guys, and the weight towards higher renewal costs is precisely to avoid the patent trolling we see in the US - technology goes to those who can, indeed must, use it, not to those who sit on it stopping others doing so. I'm not saying there isn't more that can be done, but James was never one for shades of grey!

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  • The European system you'd like to think would be one patent covers all the EU. But no, expensive and time consuming to deal with individual countries and overall you have to spend very serous money, that is probably not there, to protect what you hope will finally be something that can generate some returns.
    As soon as lawyers are involved you've lost anyway - they'll always take their inflated fees and ride off laughing into their tax havens. Cynical? yes, but that's the reality of litigation.

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  • Dyson may well be correct but I have no sympathy for him. I believe he developed his invention in the UK and the promptly had it manufactured in Asia ; so much for loyalty. Perhaps the more' important' inventions should be protected , but in general I cannot help but think they stifle competiton and development .Some applications are quite laughable. The convoluted descriptions and language are surely rather unnecessary today. If you don't believe me go to www.freepatentsonline.com

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