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Wealth of Ideas
June 16, 2011 - Larry Lockwood received patents in 1994 and 2001 on e-commerce systems for searching, retrieving and displaying goods and services. Then he set up a successful licensing campaign from his La Jolla, CA home, signing patent licensing deals with companies large and small. It seemed that he was truly getting his money's worth from his patents.
Then, in 2003, the law firm of Sheppard Mullin Richter & Hampton initiated a reexamination request on behalf of alleged infringers of Lockwood's patents. Lockwood's pending patent infringement litigation was put on hold, and Lockwood spent the next four years - and hundreds of thousands of dollars in legal fees - trying to survive the reexam process.
Ultimately, his patents were upheld - but Lockwood had lost four valuable years of patent life along with lost licensing opportunities and legal fees. Since patents are a wasting asset, a big chunk of their value disappears during reexamination - even if the patents are found valid.
Lockwood says the patent reexamination process is “made to order to do what’s happened to me."
“My case has blessed all the schemers who are thinking about the best way to stop an infringement trial,” he adds.
Former Senator Birch Bayh (D-IN), who co-authored the 1980 Bayh-Dole Act that the court used in deciding that Lockwood had no right to sue the law firm that initiated the reexam request, is now a practicing attorney who advised Lockwood on patent litigation. He wrote a blog post on TheHill.com about the case.
"The implications of this case are breathtaking and have gone largely unnoticed," Bayh writes. "The court rulings bear on the soundness of the patent system and suggest immunity for anyone who wants to abuse federal administrative processes against competitors – essentially gutting states rights in such matters."