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Author: ElricSeven Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1856  
Subject: Re: ? for Elric7 on CREE Date: 7/26/2001 10:09 AM
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There is a little thread going on the CREE board with reference to Zeke's article the other day about patents. I was wondering if you had the time to read it quickly and make a comment on anything you may know about the lawsuit between CREE and Nichia.

Now that I am working on an attorney, I don't really comment on ongoing litigation for fear of possible conflicts of interest. In a 600 member law firm I don't always know what my cohorts are working on, so I run the danger of stepping on some toes. Or, even a serious ethical violation.

However, as a comment to Zeke's article, I would note that a patent is always presumed to be valid unless proven otherwise. So, individual patents are not likely to be ruled invalid. In addition, if there are many patents in a well-integrated portfolio, the impact of a loss of a single patent can be minimized. Therefore, you can usually trust that a company with a healthy portfolio isn't going to be banged around too much in an adverse decision. Note that the exception would be drug companies that base a single, highly profitable drug on one or two patents.

Otherwise, Zeke is pretty much dead on. The patent issues with many of the knowledge based companies (especially biotechnology) can be so complex that it would take an experienced patent attorney weeks to unwind the ball of thread. For a lay person, I would not say it is impossible to judge the strength of the portfolio, but it would be really, really hard. Then, trying to extrapolate to a business value, is even more difficult. Top that off with uncertainty of litigation and you're pretty much in "flip-a-coin" land.

So, travelling back to the original premise, the patent owner usually has the upper hand and invalidity of a single patent is not typically a disaster. Of course, it is the exceptions that will kill ya.

E7
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