Meetings & Conventions: Planner's Portfolio October
The Law & the Planner
By Jonathan T. Howe,
PATENT CLAIMS, REAL OR NOT?
Examining the legalities of a recent filing on
Recently, many industry suppliers have received letters from a
Pittsburgh company, Software Management Inc., stating that they
might be in violation of a patent. The letters cite a pending
patent application, filed in 1998, claiming ownership of many
technology tools for meetings, including methods of operating,
organizing, conducting and arranging conventions and trade shows,
both virtual and real. Of particular concern are SMI’s claims
regarding online registration systems.
The letters have requested $1,250 or more for each event to
avoid potential claims of patent infringement. Should SMI get the
patent, it would essentially have a monopoly on these technologies
for up to 20 years from the date of filing. SMI would be entitled
to seek royalties and grant licenses to those who incorporate the
patented processes in their own operations.
CAUGHT OFF GUARD
The opinions of the meetings industry at large are varied. Some
have scoffed at the application and advised recipients to ignore
the letters. Others have issued warnings not to risk future
liabilities and have recommended paying the fee.
SMI faces several obstacles because, to be patentable, the law
requires the invention to be nonobvious, novel and useful. To
determine this, the Patent Office compares the invention at issue
with the “prior art” in the field essentially the body of public
knowledge that predates the invention. If the invention was known
or used by others in the United States or was patented or described
in a printed publication before the date of alleged creation by the
applicant, then prior art exists, and the application will be
denied. In this case, many in the industry say prior art exists
against the SMI claims of novelty.
The Patent Act prohibits the issuance of a patent when the
differences between the subject of the application and the prior
art are such that the subject matter as a whole would have been
obvious to a person having ordinary skill in the art at the time
the invention was made. Though it is not clear how broadly or
narrowly this standard would be defined in this case, someone with
good knowledge on the technological interactions involved with
Web-based events should qualify.
Several courses of action are open to those who received the
letters. First, pay up. Second, ignore it. Third what we have been
recommending to clients acknowledge receipt of the letter and
request further and ongoing information.
Here are two reasons not to write a check right away: Those who
pay the amount invoiced have no assurance the money will be
refunded if no patent is issued. If it is issued, previous payment
could result in an implied agreement that SMI has granted the payer
a license for future activities.
Though this issue has generated considerable buzz, by all
accounts we are in the lull before the storm, and no one is sure
the storm will ever hit. SMI cannot enforce its rights until a
patent is granted; if it is, there will be a frenzy of activity by
all those potentially affected by its claims.
If the patent is issued, planners themselves might end up owing
royalties. Any time a planner uses an online registration service,
he might be guilty of vicarious infringement. For example, if I buy
services from company X, and incorporated into their product is
something for which X does not have a license, then I also am
liable. If I am a user, I am almost as responsible as the person
who sold me the technology.
Planners might want to consult with their legal counsel as to
what steps, if any, they should be taking.Jonathan T.
Howe, Esq., is a senior partner in the Chicago and
Washington, D.C., law firm of Howe & Hutton, Ltd., which
specializes in meetings, travel and hospitality law. Legal
questions can be e-mailed to him at email@example.com.
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