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[Wesley Feinstein]

I'm totally lost when it comes to legal stuff and need all the help I can get.

I have this idea of a on-line peer-to-peer service but checking the US patent office website there is already an application in process that is very similiar to my idea.  The application appears to be still in the 2nd round of "Claim => Non Final rejection" stage since it's filing in 2002.  

Now, do you guys think it would be worth it just to hire a legal consultant to  evaluate the health of this patent (since I'm not really familiar with all the legal issues) to see if it has a chance of making it through?  How much will this cost?

Since this on-line service hasn't been implement yet, if I were to go for the safer route I guess I should contact the inventor to work out some revenue sharing agreement right?   But what if the patent end up being rejected?  There lies my dilemma....

any help would be greately appreciated!

-Wes

P.S.  Just a side question,  how does a peer-to-peer tehcnology like skype get's patented?  I mean there must be hundres of VOIP applications before it right?  Am I missing something here?

[JimIvey]

Whether it's worthwhile getting an expert opinion on the "health" of another's patent application depends on what you hope to do with that information and what that's worth to you.  I can estimate cost to evaluate someone else's patent application and I can estimate a degree of certainty of such an evaluation.  Whether that's worthwhile depends on what you hope to do with the information.

If that one fails, it doesn't necessarily mean that you won't have other patents to contend with.

Contacting the inventor isn't always the best strategy.  Some published applications don't accurately reflect that the application is assigned to a company.  You may find yourself corresponding with a Microsoft engineer about the prospect of going into business as a competitor to his employer.  How the engineer would react is uncertain.

Re your last question, yes, you're missing something.  There are nearly (over?) 7,000,000 patents issued.  They don't cover things like "VoIP".  They cover things much more specific than that.  Each might cover a very specific type of VoIP, a specific enhancement, a specific tweak or improvement, etc.  

I don't know if Skype has a patent on their particular type of P2P VoIP, but maybe they do.  From what I understand, they're approach is quite different from what others have done in VoIP.  While other groups were debating the particulars of a VoIP dialing system (assuming number-based dialing approaches to work with conventional telephone equipment), Skype bypassed the whole debate by using alphanumeric IDs (ignoring the assumption of standard telephone equipment) and a P2P structure, bypassing the collection of ports typically required for a VoIP connection.  So far, it seems to be a successful design.  Will it ever branch out to where we all have Skype phones around the house?  Maybe.

It all comes down to the claims.  If the claims of a patent application recite something that's new and not obvious, you get a patent (assuming all the other requirements are met).  In fact, before you get all worked up about that application, read the pending claims and see if they describe what you want to do.  You can probably see the Office Actions in which prior art is cited against the claims.  Look at those documents, some of which are likely patents.  Look at those claims and see if they describe what you want to do.

That would be a good start.

Regards.

[Wesley Feinstein]

Thanks JimIvey,  It looks like very good advice.

I tried to look at the Non Final Rejection documents (is this what you meant by "prior art is cited against the claims"?), and it seems like there are several of their claims are rejected based on some earlier claims that are actually Issued.  It looks like they have recently submitted an applicant arguments to defend some of the claims against the rejection.

I think you have a good point that this particular patent application should not be the only one that I watchout for, since there might be other claims I should look into.

My goal here is not trying to apply for a patent but to prvent myself from getting sued if I do ever implement this on-line service.  I have a feeling I might be infriging on some of the patent out there that are either already issued or in process.  However, with my limited legal knowledge and time I don't know if I can go through all of them.

Therefore, in your opinion do you think it will be worthwhile to consult a patent lawyer just to do a exhaustive search to see which prior patents should I try to obtain license from before I waste any effort in implement this on-line service?  

Do you have any idea how much do they usually charge to do this kind of work?  (I don't have a big budget to work with)

thanks again,

[JimIvey]

Very few go out seeking patents they might infringe and then contact people out of the blue for a license.  Just from a negotiation perspective, it's better to let them come to you.  If you go to them and ask for a license, they may ask for a higher rate since you were so interested.

If you really look into all aspects of what you hope to do, you might find hundreds of patents covering this or that part of what you do.  The magnitude of the task of finding and evaluating all of them is overwhelming.

Most people just do what they want to do and then see who contacts them about patent issues.  By the time you attract much attention, you're likely to have enough revenue to deal with the situation appropriately.  Because of the cost involved in enforcing patents, most patent owners don't do much until an infringer starts to have a significant impact on the marketplace.  (Notice that I used "impact" properly, as a noun and not a verb -- a pet peeve of mine.)

I don't mean to suggest that infringement is okay, just that sometimes the best way to sort out the significant patent problems from the insignificant patent problems is to just ignore the patents and see which ones come up and grab your attention.

Of course, once you're made aware of an assertion of infringement of a patent, you have to do something about it.

Regards.

[Wesley Feinstein]

thanks, this is definitely helpful information!  I agree with you that there are actually so many companies out there just acquiring patents for licensing revenue (e.g. Acacia) it might just be impossible to do an exhaustive search to find out which patent I will infrige on.

Another question that comes to mind:  If I deploy the service and wait until the other party to come to me, is it common for the other party to ask me to pay for a large sum of money as a penalty of the infrigement damage?

Or do they typically only try to get future licensing fee (or revenue %) from that point forward without asking me to pay back the revenue that has already been made?  

Also, what about the situation when by the time they filed the infrigement suit I have already sold the company to someone else?  Will  I have to pay penalty then?

[JimIvey]

These questions are getting far afield from what I do professionally, but I'll try to offer a perspective.

Most patent owners aren't out to punish people.  They just want to be the sole supplier of their invention(s) or they just want a reasonable piece of the market they created.  Punitives typically come after you've been asked nicely (or not so nicely) to stop infringing and you ignore them.  The measure of damages for patent infringement is a reasonable royalty or, in some cases lost profits, from the time you knew or should have known about the patent -- or up to the most recent 6 years of infringing activity.

Licenses can cover a royalty for past infringing activity, but not necessarily -- some licenses can be forward looking only.  Each case is negotiated on its own merits.

As for after a sale of the company, I would think the company would be on the hook for infringement rather than you personally, but that's not necessarily the case.  If you form your company before you begin something that turns out to be infringing and you do all your infringing activity working for the company, there's a good chance the company would be liable and not you.  That's all way beyond IP law -- and probably depends on the particular language of the contract by which you sell your company.

The bottom line is that there is risk in everything you do.  Is it possible that the French will find things traded on your system objectionable and try to fine you substantial sums and put you in jail.  Yeah, it's possible.  They did it to ebay, or was it google?  Is it possible that some fundamentalist islamic organization will find objectionable content traded on your system and call for your assassination?  Maybe.  Not likely, but not altogether impossible.  Patent liability is just one of the risks you'd face.

From what I understand, many companies operate with a fair degree of impunity until they start to see annual revenues of about 200 million dollars.  Then, people start showing up with patents and palms extended to receive their royalties.  It will be unpleasant, to be sure.  But it will be something your company should survive.

I hope that helps.

[listenup77]

I'm sorry to interrupt with a question out of topic, but it is killing me to know (killing, not used as a verb, sorry JimIvey). Wesley Feinstein, you motioned you found a patent that was similar to your, but was in "the application appears to be still in the 2nd round of "Claim => Non Final rejection". I thought pending patent applications were not able to be seen by the public. If so, then that means the 18 months until an application is made public also applies to applications in the process (passing the 18 mon. period)?

[JimIvey]

Once an application is published, anyone can view the entire contents of the file -- rejections by the examiner, responses by the applicant, etc.

Regards.

P.S.  For what it's worth, I'm pretty sure "killing" is okay as a noun and as a verb.