On the evening of Thursday 24th November, the London Health Technology Forum holds its last event of the calendar year on “Intellectual property & licensing”. This is a really critical area that this editor has seen more people lose money on because of not handling properly than in any other aspect of early start-up management – it truly is vital to think through very early on, to stop people stealing your ideas and paying an appropriate price to license them. Attendance is free; booking is here.
(The RSM’s mHealth app conference on 4th April 2017 is just about to end its early bird prices too – worth booking here anyway now, at it’s usually a sellout).
The wearables war continues, and the Law of Unintended Consequences seems unbreakable. This one was decided in a US International Trade Commission court, with the judge ruling that the three patents in question “don’t cover ideas eligible for protection” and dismissed the August trial between Fitbit and Jawbone. This is a reversal of fortune for the two competitors as a similar patent challenge to Jawbone was won by Fitbit back in April in the same court. In the new ruling, the judge said that Fitbit “seek(s) a monopoly on the abstract ideas of collecting and monitoring sleep and other health-related data.”
The skirmishing has a deeper context. Jawbone has accused Fitbit of hiring former employees and purloining trade secrets like product design and marketing plans, and alleges that the suits were “brought improperly by Fitbit in an attempt to burden Jawbone with having to defend invalid patents in multiple venues.” Fitbit reportedly has 300 patents, so that is a lot of defending for a company that has issues of its own. Jawbone has struggled in past months with its products, with various (and contradictory) reports indicating it’s exiting the wearable business, working on a new wearable and selling its audio business (which has also been crushed by competition.) Undoubtedly this will continue as Fitbit plans to challenge the ruling. Your Editor suspects that their legal and IP offense/defense activity is a substantial budget line for them. Bloomberg (20 July and April), The Verge
Update: Jawbone is rumored to be up for sale, with reports that they have approached at least one hardware manufacturer about a purchase. Reportedly they missed an August payment to a business partner. Investor BlackRock has marked down their shares, formerly valued at $5.97 a share, to less than a single penny. Since 1999, Jawbone has had funding of over $900 million. 9to5Mac, The Verge Even the much-publicized hiring of high-profile exec Adam Pellegrini from Walgreens to Fitbit to lead digital health has a Jawbone twist, as both the former and latter were partners. MedCityNews
This is the fourth article of an occasional series on law and intellectual property (IP) as it affects software and systems used in health technology. The topic is the importance on implementing your own audit of your company’s IP and why you should enlist an outside company to do it. More than a list of your copyrights and patents, an independently conducted internal audit will prepare your company for the external due diligence expected when a bank wants to vet a loan or an investor knocks on the door–and it includes things like your website and IT. While Mr. Grossman is writing in the context of US law, our UK and international readers will find his pointers applicable both locally and in dealing with the US. What’s refreshing is his plain writing and lack of ‘legalese’.
Mark Grossman, JD, has nearly 30 years’ experience in business law and began focusing his practice on technology over 20 years ago. He is an attorney with Tannenbaum Helpern Syracuse & Hirschtritt in New York City and has for ten years been listed in Best Lawyers in America. Mr. Grossman has been Special Counsel for the X-Prize Foundation and SME (subject matter expert) for Florida’s Internet Task Force. More information on Mr. Grossman here and at his blog.
INTELLECTUAL PROPERTY DUE DILIGENCE
Intellectual property may be among the most valuable assets your company owns. The problem with intellectual property (IP) is that by its nature its intangible. You can’t touch it or see it. So how do you know what you have and own?
The starting point is to look to any registrations you may have with the government. For example, you may have registered a copyright or trademark and have paperwork to prove it. However, the registrations are just the starting point. It turns out that getting a handle on your company’s IP assets can be a complex process. (more…)
Not only do company founders have to deal with patent trolls, but find their way through patent thickets. Patent thickets are overlapping patent rights through which developers must find a safe, defensible space for their technology. This article introduces this concept to our readers and outlines a strategy to deal with it–in early days, and not sticking one’s head in the sand as this Editor has encountered. What may surprise you in reading this excellent article is that the author, Dolly J. Krishnaswamy, is not an experienced litigator, but a law student at NYU while working as a Project Manager/Law Clerk, Goldstein Patent Law. She blends law, science, tech and journalism with her prior experience as a journalist for Science magazine, technology work in New York City and in the study of genetics while at Emory University. Enjoy the article.
Many of you are privy to the problem of excessive patents. You have all seen the articles about yet another cellphone company infringing on yet another patent, but what you’re left with are questions of what all this activity means and how to use that information to act in your best interest– whether you are the CEO of a company or the general counsel for one. At the 2013 ABA Annual Meeting held in San Francisco, legal experts tackled this problem, discussing the trends in patent litigation and some potential strategies for companies preparing to introduce products into heavily-patented market segments.
Generally speaking the use of patents can vary with some people using them for insurance and others using them strategically. From a business standpoint, how a company uses a patent depends on the industry that company is in. For example, in the medical technologies space, all the companies will have patents on their core technologies and be highly cognizant of the patents they have to deal with. With the record number of high patent filings, the continued state of high damages, and the fact that even smaller companies are beginning to see patent infringement lawsuits, it’s clear that patent strategy is a complex matter– further complicated by the presence of patent thickets. (more…)
This is the third of an occasional series on US law and intellectual property (IP) as it affects software and systems used in health technology. This article is a ‘how to’ on achieving a more equitable liability arrangement between a company and a vendor. A standard clause a vendor uses to protect their company from liability can cause a great deal of trouble and financial heartache for a contracting company when ‘things go sideways’. Correspondingly, if you are a vendor or partner, this enables you to anticipate issues a skilled negotiator on the other side of the table will present.
Mark Grossman, JD, has nearly 30 years’ experience in business law and began focusing his practice on technology over 20 years ago. He is an attorney with Tannenbaum Helpern Syracuse & Hirschtritt in New York City and has for ten years been listed in Best Lawyers in America. Mr. Grossman has been Special Counsel for the X-Prize Foundation and SME (subject matter expert) for Florida’s Internet Task Force. More information on Mr. Grossman here.
When clients come to me to consider suing because of a tech deal that has gone bad, the single worst lawsuit killer is often the “standard” limitation of liability clause found in a vendor’s form agreement. It never ceases to amaze me how people don’t pay attention to these clauses as they blithely sign-off on a one-sided agreement. It’s just one little clause and yet it can cause so much damage.
Here’s an example of the type of provision that you’ll see in tech agreements:
“The liability of vendor to customer for any reason and upon any cause of action related to the performance of the work under this agreement whether in tort or in contract or otherwise shall be limited to the amount paid by the customer to the vendor pursuant to this agreement.”
Yes it’s heavily slanted in favor of the vendor—it’s the vendor’s form. I draft them just as one sided when I’m representing a vendor so that I protect MY client. As I always say, he who drafts sets the agenda. (more…)