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Facebook Sued for Patent Infringement – Will Their Lawyers be Sued for Malpractice Next?

Facebook has been sued by Rembrandt Social Medial, LP for patent infringement. Rembrandt Social Media doesn’t run a social media site, but was created by Rembrandt facebook_logoIP Management, LLC, with the family of the deceased inventor of the patents and the inventor’s company Aduna. According to the complaint Rembrant works “to help inventors and patent owners, who often do not have the requisite capital or expertise, enforce their rights against companies that use their inventions without paying for them.” In other words, Rembrandt is a Non-Practicing Entity – what some people call a patent troll.

Rembrandt alleges infringement of two U.S. patents: the ‘362 Patent and the ‘316 Patent. Both patents have filing dates back to 1998.  The ‘316 Patent discloses a personalized web diary that can be shared with other users. The ‘362 Patent relates to the features such as the “Like” and “Share” buttons.

Beyond the patent infringement allegations, the complaint also alleges a potential conflict of interest for the patent attorneys who prosecuted the cases. According to Rembrandt, the law firm that represented the inventor in prosecuting the patents began prosecuting applications for Facebook in 2008. The law firm then continued to represent both Facebook and Aduna until July of 2012 when the law firm terminated its relationship with Aduna.

The case probably looks worse for the law firm than it really is. The Aduna patents issued in 2003 and the law firm’s involvement was likely limited to the docketing and and paying of maintenance fees. While it can’t be determined from the complaint, the law firm may have only discovered the relationship of the subject matter in June 2012, when Facebook acquired a patent in which the ‘362 Patent was cited as prior art.

There isn’t enough information in the complaint to gauge the severity of the conflict, or if there really is one. It does, however, show the potential for “subject matter conflicts” to develop into direct conflicts among clients.

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Patent Litigation Rates: What They Tell Us and What They Don’t

Over the course of the last week, I’ve come across two blog posts, via my twitter feed, that show opposite views on patent litigation. The first takes the position that patent troll litigation is rampant and stifling innovation, especially for startups. The title, “Numbers Don’t Lie: Patent Trolls are a Plague” sums up the author’s position nicely. However, the piece doesn’t paint a very comprehensive picture.

The numbers referred to are those based on a survey by Colleen Chien of Santa Clara University – School of Law. Prof. Chien notes that 40% of respondents stated that troll activities had had a significant impact on the startup’s operations. However, the fact that patents are asserted against emerging businesses more often than others shouldn’t come as a surprise. After all, if a company is arguably infringing a patent as part of its core business, it would be expected that the issue would come up earlier in the company life cycle. These numbers could be skewed relative to the economy as a whole.

The second article takes another tack as you can see from the equally suggestive title, “The ‘Patent Litigation Explosion’ Canard.” As you can guess, the author, Prof. Adam Mossoff, disagrees with the idea that there is a “Patent Litigation Explosion” going on. This piece discusses patent litigation rates (measured as a percentage of issued patents litigated). From 1790 to 1860 the rate averages 1.65%. From 2000-2009, it was 1.5%.

I’m inclined to think the litigation rates over time to be a better indicator of the growth of patent litigation than a survey of startups. To be honest, I was skeptical of the litigation rates, not that they are inaccurate, but they may not be very meaningful if the number of patents issued relative to GDP has gone up. My assumption was that the number of patents issued per billion dollars of GDP would have grown and that the a constant litigation rate would actually mean an overall increase in patent litigation relative to GDP. That assumption was wrong.

First I looked to the USPTO data regarding patents issued. Here is a chart for patents issued each year from 1963 to 2011.

The “ups” and “downs” unsurprisingly correlate to the general state of the economy as fewer patents issue during and after economic downturns. However, I was interested in the number of patents issued per billion dollars in GDP. I used real GDP data (GDP adjusted for inflation) and the number of utility patents issued for each year from 1963 to 2011. So, I simply divided the number of patents issued in a given year by the inflation adjusted GDP that year. The following chart shows what I found:

While there is a lot of variation, the overall trend appears relatively flat. The average number of patents issued per billion dollars of GDP from 1963 to 2011 was 13.00, and a significant portion of the last decade was below that. Accordingly, the litigation rates referenced by Prof. Mossoff are informative and it appears that there has not been a significant increase in patent litigation, relative to GDP.

Of course, this is only part of the story. Calculating litigation rates as a function of the number of patents issued in a particular year doesn’t necessarily correlate to the number of patents in force (i.e. issued and with all relevant maintenance fees paid that have not yet expired) for that year, but it is, perhaps, a leading indicator of the number of patents that will be in-force in years to come. Such a calculation, however, is easier to make and is likely a reasonable starting point.

Another issue is that these numbers doesn’t tell us the economic impact of patent litigation. While the number of cases relative to GDP is steady, the average price tag (damages, attorney’s fees, etc) associated with a patent litigation may have grown relative to GDP, or there may have been a significant increase in licenses entered before a complaint is filed. However, I haven’t seen any data to show that either of those things has happened.

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Personal Branding and Social Media: Cultivating Relational Connections

Attorney-client relationships are just that – relationships. How can you build relationships using social media? I suppose this is what the people who know much more about social media than I do are talking about when the discuss “engagement.” In some contexts, this is a straight forward proposition. If you build your brand by showing you have expertise in an area, you may get questions or comments from readers of your blog. Other people will follow and retweet you.

Unfortunately for lawyers and other professional service providers, our potential clients may be less likely to be active in social media in these ways. Many people are loathe to discuss their legal issues on a public blog, and they should be. Also, in-house counsel appear to be voracious, if passive, consumers of social media content relevant to their work. If an in-house counsel reads a blog post relevant to a lawsuit they are thinking of filing, they aren’t going to tweet about it. This presents multiple challenges.

One issue is that it may be difficult to use the traditional measures of engagement to measure the reach of your social media efforts. That doesn’t mean that your social media efforts are not important. However, digging into your website statistics may give you a better idea of which topics your readers find interesting than looking to see how many people tweet your blog post.

Another issue is that it is very difficult to build a relationship without the benefit of two-way communication. You want great content, but you also need readers to associate that content with you. One way to do this is to personalize your blog. I post about intellectual property issues that interest me, not just because of the legal aspects, but because the subject may be related to a hobby or other interest of mine. When I do, I want to make reference to the personal connection I have to the issue. This humanizes me as a writer so I am not just a conduit of information.

Prototype logo for my personal brand: ConnollyIP

I chose which cases to write about partly based on the breadth of their appeal, but also because of my personal interest in the outcome or reasoning. I blog about intellectual property issues related to outdoor activities, and I regularly tweet about internet startups and food. The reason is because these are areas of interest for me. This post isn’t being written just to show I have a rudimentary grasp of some social media topics, but also because the way lawyers use social media and blogging genuinely interests me. I want my blog posts to not only show me as a reliable source of information and well reasoned opinions but also as the type of person others would want to do business with.

In the process of writing these three posts I’ve started to crystallize in my own mind what my social media strategy is. I want to provide interesting content that differentiates me and demonstrates my expertise. That, I hope, will generate more readers. I also want to create a sense of relational connectedness with the people who read my tweets and blog posts, even if we don’t directly interact. That, if I’m lucky, will help convert consumers of content into clients when they have a need I can satisfy. If it doesn’t work, at least I get to spend the time writing about what I want to write about, not what I think I have to write about.

I don’t think this is anything new and is really what a lot of people are doing, especially consultants, and tech types. However, I don’t see many attorneys using a strategy like this. I would love to read others comments on this, and while I’m a lawyer and write from that perspective, I think this applies to many types of service providers. What works for you?

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Personal Branding and Social Media for Attorneys: Establishing Expertise

Lawyers and other professional service providers are looked to as experts in their fields and clients have to trust that we are doing a good job for them. That means they must believe we are competent. In short, our reputations are our most important asset.

Social media can help an attorney build a favorable reputation with current and prospective clients. However, many attorneys seem reluctant to differentiate themselves via social media. While there are some wonderfully insightful blogs out there, many blogs run by practicing attorneys appear to serve more as news digests and simply post links to recent cases or provide summaries of practice developments. Though useful, these blogs don’t provide a distinct voice or feature one skill that is important to an attorney – critical, strategic thinking.

These practice area news blogs can be great for targeting other attorneys as a source of referrals, and if that is your strategy, more power to you.  However, if you want to directly reach out to potential clients, be they entrepreneurs or in-house counsel, I think the best pitch you can make via social media is one based on your expertise.

Of course, within a firm, taking a position on legal issues can be difficult. Other attorneys may not share your opinion, or clients may need to argue a contrary position in the future. The result has often been to avoid providing personal opinions about the merits of a decision or proposed statutory change. My solution has been to take my blogging out of my firm and put it on my own website. The views here are my own and do not necessarily reflect those of any other attorney in the firm. I am also cognizant to avoid positions that may be contrary to the position a client of the firm may need to argue. When writing on legal issues, I mostly comment on decided cases and provide my opinion of what the law should be, not an argument about what the law is.

I strongly believe that the best way to show you have expertise in an area of law is to put forward strong, cogent opinions. Blogs aren’t the place for full law review articles, but you can articulate an opinion and provide some support for it. You can also link to other sources easily to let your readers view other opinions on the issue. What this does is give your readers a sense that you have a command of the subject matter and can be relied on as a knowledgeable source of information and, potentially, counsel.

In the next post, I’ll share my thoughts on how we can use the social media to personalize our message and create relationships with the members of our networks.

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Personal Branding and Social Media for Attorneys

Prototype logo for my personal brand: ConnollyIP

I’m a patent attorney, and I work in a law firm. like many mid-level attorneys I’m trying more and more to transition away from doing work for other attorneys’ clients and doing more for my own. Not only is it more financially rewarding for an attorney when they have their own clients, but it is also more emotionally rewarding to be an active participant in a client relationship.

Of course, this begs the question, “how do you get clients?” I know there has been a lot written on the subject, and I am clearly not an expert. While it’s clearly not the whole story, I think social media can play an important role.

Social media isn’t really a whole new world. It has just given us ways to scale the types of interactions we had before the internet age. There are still crucial aspects to the relationships we develop by using social media that have always been needed in any relationship. In the context of a professional trying to market there are still two major needs.

First, you have to cultivate a sense of expertise. The reader must feel that the professional who is providing content is knowledgeable and reliable in the fields for which they provide original content. A big part of any professional relationship is the trust that the service provider knows what they are doing.

Second, you have to develop a relational connection. At the end of the day we are all replaceable by people with similar skill sets and experience. It’s the relationships that we develop that make the difference.

In the next two posts, I’m going to lay out my personal thoughts on how I hope to cultivate a sense of expertise and relational connections with current and prospective clients through blogging. There are unique challenges to doing both of these things in the context of social media, especially for lawyers.

I’m definitely not an expert on social media but I’ve put some thought into this and would love to read comments from others on this road.