On Topic: Busy time for business lawyers

A few years ago a friend of mine had this sure-fired business scheme.

Jed had a handful of booklets printed bearing various pointed remarks related to driving or parking. When you were particularly aggrieved by a fellow driver, you were to tear off the appropriate page and stick it under the offender's windshield wiper.

As best as I can recall - my own complimentary booklet is long gone - the messages ran along these lines:

“If you moved your car a little more, you could take up three parking spaces.”

“If you drove any slower, you'd be going backward.”

“Who taught you to drive - Evil Kenievel?”

You get the idea. Though not exactly achieving the cleverness quotient of Oscar Wilde, the message booklet would be a real barn burner, Jed insisted.

But what would happen, I asked, if the car's owner returned while you leaving one of these witty pages on his car?

That hadn't been factored into the business plan, Jed admitted, by what he really needed now was to patent the booklet - which meant he wanted to hire a patent lawyer.

As you might guess, the booklet plan faded away, ultimately reaching the fate it deserved - neglect and occasional embarrassment when brought up at parties.

I don't believe Jed ever got as far as contacting a patent lawyer. Which is probably good, as they surely must be busy people.

Consider just a few of the truly large issues roiling the patent law field today, all of which have consequences for businesses and investors here:

•  Patent “trolls” (around for a while now)

•  Patent “cliffs” (happening now and ongoing)

•  First-to-file (some of it's been the law of the land since this past September).

(I'm using more quote marks than usual as I wouldn't want to mislabel a company a “troll” if it isn't, the way I incorrectly identified Chip and Dale as squirrels rather than chipmunks in a December column. The poor creatures could be scarred for life - assuming they could read, of course.)

The public radio program “This American Life” devoted an entire show to patent “trolls” this past July. In its very thorough report, compiled in conjunction with NPR's Planet Money, the essence was this: “Trolls” are companies that buy up patents from inventors who've been unable to get their projects off the ground (my pal Jed, for example).

Then, given the incredibly broad interpretations for so many patents, they “troll” for inventors and companies with even remotely similar projects.

Then they strike: They send letters, claiming theft, and threaten a sizable lawsuit if the inventor doesn't settle.

In addition, some of these “trolls” also sell “insurance” to companies to protect them in case some evil doers in the future try to sue for patent infringement.

One of the interviewees on “This American Life” used the phrase “malevolent outsiders.”

None of the spokespersons on the program thought of themselves as “trolls” or “malevolent.” Their companies exist, they noted, to help inventors who've been unsuccessful commercializing their ideas by paying them something.

One of the businesses that has been buying up patents possesses 35,000 patents, the program pointed out. For the record, patent infringement lawsuits jumped 70 percent between 2004 and 2009.

Patent “cliffs” you may have heard about, but maybe not under that term. This refers to the challenge now facing pharmaceutical giants, many of whom count on big-selling, brand-name drugs.

Pfizer, for example, earned almost $11 billion in revenues in 2010 on Lipitor. But its patent on the anti-cholesterol drug expired in early December.

As noted in the Economist magazine, “in all, blockbusters with a combined $170 billion in annual sales will go off patent by 2015.” You see why they call it a cliff.

Some of the big pharmas are finagling deals with various health-plan management companies to prolong that drop-off. Pfizer, for example, is offering a special price for Lipitor.

As for first-to-file: President Obama on Sept. 16, 2011, signed patent reform into law that proponents said would bring the United States in line with almost all the industrialized nations on this planet.

Opponents warn it merely rewards not the first to invent, but the first to file. That is, the companies with the fastest lawyers.

“This is not a patent reform bill. This is a big corporation patent giveaway that tramples on the right of small inventors,” claimed U.S. Sen. Maria Cantwell, D-Wash., to CNN.

Different parts of the “reform” - there go those darned quotes again, Pa - take effect on different dates. The first-to-file segment will become law March 16, 2013.

At the Iowa City Area Economic Development Group's annual meeting this past September, keynote speaker Debi Durham, to my surprise, praised the president's approval of first-to-file.

So at the end of the lunch, I nabbed the Iowa Economic Development director to ask about this. What about, I wondered, the even bigger hurdle this will plant in the way of inventors - in a country that prides itself on its clever thinkers and tinkerers?

Durham pondered for a moment, then said: “Hmm ….” She had not, she confirmed, heard that side of it yet.

Durham, to her credit, admitted the law will bear watching and maybe a reconsideration after it gets going. (See George C. Ford's story on first-to-file here.)

Here's a footnote: Who invented the radio?

Wrong.

Guglielmo Marconi usually gets the credit. But Nikola Tesla was preparing to transmit his first-ever radio signal in New York in 1895 when his lab caught fire.

Marconi got there first, laying his patent claim in 1886, and he later won a Nobel Prize. Tesla's radio patent came a year later.

It wasn't until 1943, after both men were dead, that the U.S. Supreme Court weighed in to declare this wasn't fair. The patent was awarded to Tesla. (Dead, yes.)

Had there been first-to-file in force, Tesla wouldn't have stood a chance.

But some patent lawyers could have been tremendously busy.