Why Cisco, Salesforce Joined Alliance to Protect Patent System

Eight top tech companies recently joined forces to form an alliance dedicated to balancing the patent system by improving patent quality and reining in the impact of nonpracticing entities, often referred to as "patent trolls."

Two in-house lawyers from member companies said the motivation to join stemmed from the desire for a strong patent system that protects inventions and investments made in innovation.

The High Tech Inventors Alliance, which was announced July 10, counts Amazon.com Inc., Cisco Systems Inc., Salesforce.com Inc., Google Inc., Intel Corp., Adobe Systems Inc., Dell Technologies Inc. and Oracle Corp. as members. Combined, these eight companies own more than 115,000 U.S. patents and spent over $62 billion on research and development last year.

"HTIA supports balanced reforms in the [U.S.] Patent and Trademark Office, the courts and Congress that address the root causes of these problems while advancing a patent system that promotes investment in new technologies and American jobs," according to the group's website

To root out low-quality patents, for instance, the alliance supports a requirement from the Patent Office that patent applications clearly and fully explain the technical problem being solved. The group also stands behind the inter partes review procedure, making patent litigation fair and efficient and applying fair damage awards and only allowing for enhanced damages for willful infringement in the "most egregious circumstances."

At Cisco, billions of dollars have been poured into research and development and hundreds of millions of dollars spent in creating the networking technology company's patent portfolio, so a strong patent system is critical, said Mark Chandler, senior vice president, general counsel and chief compliance officer at Cisco.

"For us, having a strong, efficient patent system is really critical for the innovation that we undertake. A strong patent system allows us to protect our inventions and allows us to earn a proper return on our investment in innovation," Chandler explained. "At the same time, a strong patent system protects against patents being issued for claimed inventions that don't really reflect [patentability standards]."

Chandler said that even though a handful of Cisco's more than 10,000 U.S. patents have been deemed invalid through the IPR procedure, he believes the process strengthens the patent system. "Everybody says they are in favor of patent quality, but nobody wants their lousy patents invalidated," he said. The IPR process "allows the Patent Office to go back and weed out" bad patents, he added, which is "really critical to protecting the quality of the patent system."

For David Simon, senior vice president of intellectual property at Salesforce, the decision to join the alliance came from the desire for an organization that is very nimble in terms of being able to quickly push for reform or make decisions on where there's room for improvement. He said Salesforce saw a need for an organization that could respond "much more quickly" than so-called big tent organizations that represent more than just tech companies.

"These are all really important issues for us and we want to make sure that we continue working on this," according to Simon. "We want to make sure that we continue to move forward in a good direction."

Asked whether he sees the alliance as primarily beneficial to larger companies, and not necessarily the smaller players using the patent system, Simon said no. He pointed to the membership of the United for Patent Reform coalition, which, along with Salesforce, counts giants from Facebook Inc. to mom-and-pop businesses as members. No matter the size, these are companies that have been "hit by [patent] troll lawsuits," Simon explained. "So this is not just an issue for large companies, this is an issue for companies of all sizes," he said.

Contact Jennifer Williams-Alvarez at jwilliams@alm.com.

Contributing Author

Jennifer Williams-Alvarez

Jennifer Williams-Alvarez is a staff reporter for ALM Media and Inside Counsel. She can be contacted at jwilliams@alm.com.

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