How will patent strength affect our negotiations with interested companies? 3 Answers as of February 23, 2011

We have two multinationals interested in licensing our patent. It's taken nearly three years to get to this point and there's a complicating factor. The initial design was of great interest (and current interest) to them, but inventor felt the examiner's report wasn't positive enough. So inventor redesigned and now feels he has a stronger patent; however the potential licensees like design #1 better. If, in fact #1 is a weaker patent but potential licensees are most interest in that (with lukewarm interest in #2 design), should we refocus on #1? And, if so, how much does that hurt our negotiating position, if it is really 'weaker'?

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DANIEL NESBITT | Hasse & Nesbitt
Inventors almost always act negatively to an initial examiner's report, even in cases where the examiner is simply wrong. Your circumstances really call for engaging a patent attorney who will work through the issues and give you the advise you desperately need.
Answer Applies to: Ohio
Replied: 2/23/2011
Mark S. Hubert PC
Mark S. Hubert PC | Mark Hubert
It does not hurt the negotiating process at all. The strength of the patent is just one persons opinion. More important no matter how weak the patent is, it will still cost about $1,000,000 plus for anyone to invalidate it in court once you file an infringement suit.
Answer Applies to: Oregon
Replied: 2/18/2011
Handal & Morofsky LLC
Handal & Morofsky LLC | Anthony H. Handal
This is a matter where careful assessment of the details and making some judgments based on past experience is everything. In other words, there is no responsible answer to your question. That being said, a few general observations may be in order. As a general rule, you should try to license the product in which there is interest. Carefully try to elicit the basis for the preference. Note that the second design has value in terms of covering the white space around the first design, and note its advantages.

I am not sure what "weaker" means. Does this mean it is possibly invalid, or too narrow. I have been involved in many negotiations where narrow patents were viewed as covering important inventions in an adequate fashion, where it was judged that design around was not likely. If weaker means potentially invalid, that also may not be a problem because if a patent is not obviously invalid, it still creates substantial uncertainty and may have great value, depending upon the size of the market. Whether or not the potential licensee is in this business already is also an important factor in judging how to frame the conversation.
Answer Applies to: New York
Replied: 2/16/2011
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