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Posted: July 29, 2009

Technology firms turn to patent enforcement to shore revenue and protect market share in turbulent times

(Nanowerk News) Today, in the midst of the recession, companies are scrambling to find unconventional ways to increase revenue and maximize their assets -- ideally at little or no additional cost. According to Chipworks, a company activer in reverse engineering and patent infringement analysis for semiconductors and microelectronic systems, a large number of technology companies have a wealth of intellectual property (IP). This IP, in the form of patents, constitutes a large portion of corporate value. Tragically, most technology companies underutilize patents as a means to support the business strategy. An effective patent strategy or enforcement program will contribute to the bottom line and increase market share for struggling companies.
"Building, managing and enforcing a strong patent portfolio that supports the corporate business strategy is good business and can result in a lucrative revenue stream," said Chipworks CEO and founder Terry Ludlow. "Before developing an enforcement program, IP professionals should carefully consider their strategy, how much time they have, what evidence may be required, and their budget. These factors will aid in maximizing a portfolio's value while controlling the cost of enforcement."
Strategy -- identify the desired end-result of the patent enforcement program and ensure it relates to the company's overall business strategy by generating significant licensing revenue, or by protecting market share.
Time -- in today's economic environment, no one is waiting to willingly pay for an allegation of patent infringement and most will ignore a payment demand, hoping it goes away. Expect to be required to prove every point and expect delays at every possible point in the process. Patent licensing discussions can last two to three years and litigations when decisions are appealed can last much longer. More typically though, litigations speed settlement discussions and the vast majority of patent lawsuits never make it to trial.
Evidence -- infringement or evidence of use analysis will determine if there is a legitimate patent infringement claim and detailed technical analysis is required to determine if a device or technology in fact infringes. Detailed claim charts are needed to show the use of every element of the invention as claimed in the patent.
Budget -- infringement analysis by third party specialists like Chipworks provides objective evidence, but requires a sufficient investment of time and money to be effective. Scrimping on evidence production can prove costly and even negate the effectiveness of the entire program.
"Strong infringement analysis or evidence of use of the invention in the marketplace is critical," added Terry Ludlow. "Today, more than ever, fact-based evidence, generated through reverse engineering, is a necessity for companies seeking to make effective use of their IP in patent negotiations and litigations, and as a revenue-generating asset."
Source: Chipworks (press release)

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