Patent Protection: David Takes On Goliath

Guest Post by Tracy Hazzard, Hazz Design Consulting

Better Ammo Wins Patent War Against an Industry Giant

Launching a company based on a patent can seem like a solid bet until the day the industry Goliath decides to knock off your product. Counting on their ability to outspend you in a legal battle – if you can even afford a worthy fight – they steamroll you to maintain their market position. But just like when IDEO, the largest industrial design firm in the world, and 3Com (soon-to-be Palm Computing) infringed on our patented stylus pens, a low-cost fighting strategy can protect a strong patent position.

Hazz-ttools Pen Envy

In 1998, we launched ttools, llc to sell a patented combination stylus-ink pen that worked with the recently launched PalmPilot PDA (personal digital assistant). We thought we had something good. We were first on the scene. We had earned the loyalty of early PalmPilot adopters. Our design was beautifully simple and our patents had issued. The one thing we had not been able to do was to get a coveted position in the 3Com catalog that shipped with every PalmPilot. In mid-1999 we discovered why: 3Com had partnered with IDEO to design the new PalmPilot and “invented” a two-in-one stylus featured in the catalog.

Instead of crawling into bed and never coming out, we went into survival mode and decided to go down fighting. We brainstormed with our family, investors, employees, attorneys and consultants and came up with a three-pronged battle plan.

4.1.1

Battle for Public Appeal – Using our industry reputation as the first stylus pen design in the digital PDA accessory market, and our obvious position as the little guy in the fight, we were able to tap into reviewers, early bloggers and other start-up accessory and software companies worried about 3Com/Palm doing the same to them. We used them to spread the word about our suggestive web campaign: “Do we detect a bit of pen envy?” In addition to the headline image, we posted an open letter, a complete timeline of our invention and meeting dates with 3Com/Palm employees.

Ordinarily, revealing your hand is a legal no-no, but in our case we wanted public opinion to sway toward  our inventiveness. Prior to posting, we reviewed everything with our attorney. We never bashed IDEO or 3Com/Palm as infringers. We merely laid out our facts, and the products, side-by-side and let the public decide.

Divide and Conquer – Being industrial designers ourselves gave us insight into typical industry agreements. We took advantage of IDEO’s indemnification of 3Com/Palm to defend against infringement suits and subsequent losses. This meant that two separate organizations with very different structures and drivers were in the fight – one a privately-held company trading on their reputation as original designers; the other a company about to go public and not wanting to upset future investors or valuable software and accessory vendor-partners.

Strategic Stall Tactics – After we filed our lawsuit, we instructed our attorneys to allow and accept all stalls and delays from the other side. This limited the amount of money we had to pay out in legal fees and allowed time for our public appeal strategy to pressure a settlement. Ironically, the other attorneys quickly took advantage of the opportunity to stall and did not press hard with nasty counter suits.

In our case, we settled before even beginning court-mandated discovery. ttools came out of the battle with legal fees in the tens of thousands instead of hundreds, free press from publications like Fortune Small Business, a small royalty stream from the infringing product, and a nervous set of other infringers. We eventually sold the validated stylus-pen patents and closed the company to work on other inventions. Thirty-plus patents later, we’re still going strong.

About Hazz Design Consulting
Husband and wife industrial design team Tom and Tracy Hazzard of Hazz Design Consulting hold over 30 issued and pending patents. They used patented inventions as an intentional design strategy to make their clients’ products stand out competitively and connect with the consumer. Visit www.hazzdesign.com to see more of their inventions and designs.