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IP counsel reveal how to handle trolls

In-house counsel from Audi, UBS and Unilever explained why so-called patent trolls are a nuisance and gave tips for handling the unsavoury entities

Speaking at Managing IP’s International Patent Forum in London today, panellists revealed strategies to negate the impact of a dreaded letter from a patent troll or non-practising entity, as the companies prefer to be known.

The view of the three in-house panellists was slightly different to that of Baker & McKenzie lawyer John Flaim. Flaim deals with litigation in the Eastern District of Texas, where suits brought by trolls have flourished.

Despite the preference for the term non-practising entities, the panel decided troll was the most appropriate word and challenged any troll in the audience to come forward – none did.

Matthew Goodwin, vice president and global head of patents at Unilever, characterised them as a “nuisance”, rather than a true menace, partly because the controversial entities don’t threaten Unilever’s core business. Stefano Nappo of the global bank UBS echoed this sentiment, calling trolls an “irritant”.

After treating the audience to a video of Audi cars, Audi senior patent counsel Kai Brandt described Audi’s tools for dealing with letters from trolls, while emphasising the company will never yield to an unjustified claim from a troll.

First the company draws on an extensive prior art library - not just from patent offices' libraries but by drawing on standards and technical literature.

Brandt added that Audi “takes care of damages”, which is particularly important in the US. This is done by “keeping an eye on winning”, while at the same “decreasing damages” by factoring in losing.

Goodwin agreed with much of what was said by Brandt, but added that it is necessary to manage expectations within a company. Typically, a letter from a troll is sent to a CEO, rather than the patent counsel, he said. “Everybody wants to make the CEO happy - you need to still expectations.”

Goodwin added that he likes assigning a letter to a “dogged” colleague, who is prepared to really dig deep and investigate the issues raised. “Usually they find no basis for infringement,” he said.

While the three in-house counsels found trolls annoying rather than potentially ruinous, this was because their core business was not threatened. That is not the case for other businesses, however, such as telecoms companies.

John Flaim, who has worked extensively in the Eastern District of Texas on IT cases, said it was important to factor in juries’ lack of expertise. A defendant with a unique prior art defence will do well, he said.

“I know that might make patent attorneys’ heads explode,” he said, but that is the reality of dealing with non-specialist juries.

However, Flaim mentioned some recent improvements in the US. The Court of Appeals for the Federal Circuit has recently made it easier to move cases from the Eastern District. “This has made a huge difference,” he said.

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