Tuesday, August 08, 2006

Patents = $$$

One is convicted of deceptive conduct; while the other is ruled for defective patent.

Rambus was found quietly building a portfolio of patents, and misleading JEDEC members to believe that it was not seeking patents. Rambus locked licensees into agreements on their terms by making their patents known through infringement lawsuits, and after the standards setting organization (SSO) processes were implemented. It was said that Rambus gained information about the pending standard, and then amended its patent applications to ensure that subsequently-issued patents would cover the ultimate standard. Possible remedies include stopping the company from licensing its patents, or placing a cap on royalties. In the first quarter of 2006, Rambus earned USD41.7 million from patent licensing. This could impact Rambus's business that mainly license patents to memory chip companies.

In another piece, the Court of Appeals for the Federal Circuit has ruled a second patent to be invalid for Pfizer. This patent covering the calcium salt of atorvastatin - an active ingredient in Lipitor, would have lasted until June 2011. This could cost Pfizer more than USD10 billion in sales of Lipitor, if Ranbaxy will be able to market its generic equivalent 15 months earlier than expected in the US. The technical defect of this patent is related to claims. Pfizer plans to pursue the option for correcting this defect at the USPTO. I am no expert in patents but in my knowledge, claims, especially the first claim, are critical to determine if a patent is valid, and if valid, is it then a strong one. Hmmmm, hopefully this does not turn out to be a USD10 billion defect.

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