Sep 25, 2012 1:50 AM

Patent Infringement: The Penalties and More...




Our team ran across an old buddy whose father is a patent attorney. We jumped at the chance to make a connection by inviting our buddy and his father out for lunch to give us a lesson about patent infringement and its penalties.


Our Sqeeqee team was curious because one of our key patent-pending features is our social network search feature, which Mark Zuckerberg of Facebook recently talked about when he was speaking at the TechCrunch Disrupt conference in San Francisco on Tuesday, September 11. It was Mr. Zuckerberg's first public presentation since his company's IPO three months prior. He said, "Search is interesting. We do on the order of 1 billion queries a day, and we’re basically not even trying. Today with search the vast majority of it is people trying to find people, but there’s also a meaningful portion of queries where people are trying to find pages, brand pages, other business pages. So there’s a bunch of that actually does link to commercial behavior, and I think there’s a big opportunity there and we just need to go do that."


So here we are holding this pending patent, and it looks like Facebook wants to “go do that.” While we are uncertain of Facebook's plans, we can't help but anticipate how things will evolve for Facebook to “go do that” in the very near future. We do know if Facebook adapts such a plan—be fearful Google because Facebook will K-I-L-L your growth. Google's net worth is currently about $200 billion. If Facebook adapts its search feature, it could easily T-R-I-P-L-E its current net worth, E-A-S-Y!!


Back to our lunch…boy, we would actually be thrilled if our patents were being infringed upon! We've learned that the damages are made up of several ways in which a court can award damages to the patent owner. One of the main ways is by ruling that the infringer will have to compensate the inventor for the wrongful use of the patented invention. The penalty amount would typically be decided on by a jury or the court. We were told that a typical calculation could be figured out based on what is known as the “royalty rate.” The coolest part is, under certain circumstances, the court could award this royalty amount by tripling it, which is known as “treble damages.” (Yes, we took notes—LOL.) This usually happens when the infringer was found to act "willfully,” which is similar to an intentional act (i.e., knowing there was already an existing patent but going ahead and infringing upon it anyway)! Ouch for them! Ka-ching for us!!


In addition to the penalty amount compensated to the patent owner, the infringer would also be required to pay interest on the money owed as well as all court costs. OMG! And it didn't end there—in addition to the financial penalty, the court will often issue an injunction for the infringer to stop infringing on the patent and refrain from EVER doing so again! A second OUCH!!


Patent Wars” are never pretty, but patents are a regulatory system imposed on technology that is intended to ensure that inventors get paid for their inventions. It is not our intention to ever become involved in a patent war. Still, that is given that our competitors respect the fact that we have patented (or patent-pending) inventions.


As for the lunch?  Let's see…for a party of five, the bill was $267.99, and that included a 20% gratuity!  We believe it was a S-T-E-A-L for nearly three hours of legal advice. We want to thank our buddy and his father for having lunch with us. We greatly appreciate it, and the honor was truly all ours.

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