What growing patent litigation means to the marketing world, according to Brian Heidelberger.

1. Mini Law Lesson
How to Avoid Patent Trolls
Brian Heidelberger
bheidelb@winston.com
Twitter @briheidelberger
Info @ www.winston.com/bheidelberger

2. IMPORTANT DISCLAIMER
• I am not your attorney.
• This is not legal advice.
• But I am a Jr. inventor and you owe
me some $$ …
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3. What Are “Patent Trolls”?
• Buy patents and assert them in litigation
• Settlement offered are well below cost
of litigation
• Litigation is expensive, risky and costly
• So majority of troll cases settle
• Cost agencies $10MM/year
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4. How They Take Advantage of
the System?
• Patents have “fuzzy
boundaries”
• It’s time and cost prohibitive
to search all concepts before
use
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5. How it Impacts the Ad World
• Agency’s traditionally:
 run preliminary trademark searches
 Create original works or obtain a license
 Get insurance
• But with patents
 Running search is hard/expensive
 Creating original work doesn’t remove liability
 Can’t get good insurance
• All agencies are doing digital
• Patents are hard to interpret
• Asserted over commonly used technologies
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6. Patent Infringement
Cases/Claims
• QR Code-related Patents Asserted
• Alleging that using QR codes containing
a shortened link in marketing materials
constitutes patent infringement.
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7. Patent Infringement
Cases/Claims
• Text Message Patents Asserted
• Alleging patent covers sending a text
message that includes a URL within the
notification.
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8. Patent Infringement
Cases/Claims
• Network Scanning Patents Asserted
Alleging patents cover hooking up a
scanner and e-mailing a PDF.
• Demanding $1,000/employee
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9. How Agencies Can Protect Themselves?
4A’s Patent Risk Guidance
• Advertisers should assume all risks
 They know searching is time and cost
prohibitive
 They are asking agencies to act as insurers
• Agencies should factor risk into pricing
 Could get several claims up to $200Kish
• If indemnifying at all, indemnity should
limit/cap liabilities
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10. How Agencies Can Protect Themselves?
4A’s Patent Risk Guidance (Cont.)
• Agency should also:
 design software so that its flexible
 use features that have been the market for
a long time
 watch for other patent claims
 do patent searching when using new
technologies
 investigate insurance coverage
 Attempt to disavow 3rd
party responsibility
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11. How Agencies Can Protect Themselves?
4A’s Patent Risk Guidance (Cont.)
• Some Additional Thoughts:
 Do you really want to do digital?
• Is the risk/reward worth it?
 Can you subcontract liability away?
–Subcontractor must have appropriate
insurance coverage or size to make it
viable
 Develop an internal process for considering
these issues for each new project
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12. How Advertisers Can Protect
Themselves
• Client’s view:
 Agency is the expert in digital
 Agency shouldn’t take on work in which it is
not expert
 Agency is in the best position to determine
what should be searched and what risks are
out there
 Agency is traditionally responsible for any
claims and this is nothing different
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13. How Advertiser’s Can Protect
Themselves?
• Have agencies undertake liability
• But …. Not Foolproof
• Additional steps must be taken
• Internal polices/searching/monitor
• Factor several up to $200Kish
settlements into marketing budget
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14. Agencies and Advertisers
Could Collaborate
• Share risk
 Commonly used technologies
 Maximum caps on agency liability
 Minimum threshold on agency liability
• Take Legislative Action Together Via
AAAA and ANA
• Undertake Proactive Patent Challenges
Together
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15. Follow me on Twitter
@BriHeidelberger
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16. More Mini Law Lessons
youtube.com/AdAge.com
&
youtube.com/BrianHeidelberger
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