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How to Use Global IP Litiation Strategies to Deal with Non-Producing Entities (NPEs)

How to Use Global IP Litiation Strategies to Deal with Non-Producing Entities (NPEs). Heinz Goddar Boehmert & Boehmert. Features of U.S. Patent Litigation System attracting Attack Activities (Complaints) of NPEs. Low court fees (if any)

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How to Use Global IP Litiation Strategies to Deal with Non-Producing Entities (NPEs)

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  1. How to Use Global IP Litiation Strategies to Deal with Non-Producing Entities (NPEs) Heinz Goddar Boehmert & Boehmert - 1 -

  2. Features of U.S. Patent Litigation System attracting Attack Activities (Complaints) of NPEs • Low court fees (if any) • Lawyers prepared/allowed to act on contingency fee basis • i.e. very low cost at least initially for attacking NPE • Invalidation of attacking patents of NPEs expensive and difficult • High overall litigation cost for defending Practicing Entity (PE) • Lawyers usually not prepared to work on success-depending honorarium; high discovery and deposition cost; high cost eventually at trial later; etc. • No compulsory refund of defendant‘s (PE) cost (lawyers etc.) by losing plaintiff (NPE) • Consequence: High cost risk for PE, low cost risk for NPE (even if defence well-based) - 2 -

  3. Features of German Patent Litigation/ Invalidation System attracting Defence Activities by PE attacked in U.S.A. • Invalidation actionspossiblewithoutspecific legal interest • Even strawmanactionsfullypermitted • Invalidation procedurerather quick andcheap (comparedwith U.S.A.) • Nocontingencyfeebasedlawyer/patent attorneyavailablefor e.g. patent-defending NPE (otherwiseunlawful!) • Fullrefundofcourtfeesandstatutoryattorneyfees, plus necessaryexpenses, by loser (e.g. NPE) towinner (e.g. PE) • Consequence: High (cost) riskfor NPE, low (cost) riskfor PE (ifinvalidationaction well-based) - 3 -

  4. Recommendation for Pes attacked by NPEs in U.S.A. • Think globally, i.e. open parallel „war theatre“ by e.g. invalidationaction in Germany (DE) • First, identify 5 – 10 valuepatents (not necessarilyrelatedto „attacking“ U.S. patent of NPE) held/controlledby U.S. attacking NPE in force in DE (national DE patentsaswellas DE partsof EPC patents) • Attackthosepatentsof NPE byinvalidationaction in Germany • Necessaryconsequence: NPE must appoint non-contingencylawyer/patent attorneyfordefendingattackedpatents in DE withinonemonth after notificationofinvalidationaction • Will cause NPE tospend 10.000,00 – 20.000,00 EUR per attacked patent at an earlystage, i.e. easily, in total, 300.000,00 – 500.000,00 EUR • NPE atrisk in caseoflosinginvalidationprocedures not onlyto lose patent, but also tobearrefundablestatutoryfeesof PE aswellascourtfees • Consequence: High riskfor NPE, low (cost) risk (ifinvalidationactionwellbased) for PE • Overall resultofcombined U.S./DE procedures: NPE probablybroughttonegotiationtable on equallevelratherearly - 4 -

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