When we put our home theatre in I became obsessed with cables for the simple reason that you can easily spend as much on cables as all your equipment. Through one of the audio forums I found Blue Jeans Cable and had high quality speaker, interconnect, and various other cables made to length for what I thought was a pretty reasonable price.
Monster Cables sent Blue Jeans Cable a cease-and-desist letter claiming patent infringement for a specific product line. Turns out that the president of Blue Jeans is a former lawyer with considerable experience and his letter to Monster simply embarrasses the company. It’s lengthy but well worth the read and when you are finished ask yourself how you feel about the brand image of Monster.
I say this because my observation has been that Monster Cable typically operates in a hit-and-run fashion. Your client threatens litigation, expecting the victim to panic and plead for mercy; and what follows is a quickie negotiation session that ends with payment and a licensing agreement. Your client then uses this collection of licensing agreements to convince others under similar threat to accede to its demands. Let me be clear about this: there are only two ways for you to get anything out of me. You will either need to (1) convince me that I have infringed, or (2) obtain a final judgment to that effect from a court of competent jurisdiction. It may be that my inability to see the pragmatic value of settling frivolous claims is a deep character flaw, and I am sure a few of the insurance carriers for whom I have done work have seen it that way; but it is how I have done business for the last quarter-century and you are not going to change my mind. If you sue me, the case will go to judgment, and I will hold the court’s attention upon the merits of your claims–or, to speak more precisely, the absence of merit from your claims–from start to finish. Not only am I unintimidated by litigation; I sometimes rather miss it.
I will also point out to you that if you do choose to undertake litigation, your “upside” is tremendously limited. If you somehow managed, despite the formidable obstacles in your way, to obtain a finding of infringement, and if you were successful at recovering a large licensing fee–say, ten cents per connector–as the measure of damages, your recovery to date would not reach four figures. On the downside, I will advance defenses which, if successful, will substantially undermine your future efforts to use these patents and marks to threaten others with these types of actions; as you are of course aware, it is easier today for your competitors to use collateral estoppel offensively than it ever has been before. Also, there is little doubt that making baseless claims of trade dress infringement and design patent infringement is an improper business tactic, which can give rise to unfair competition claims, and for a company of Monster’s size, potential antitrust violations with treble damages and attorneys’ fees.
I have many friends who are lawyers and I mean this as no disrespect to the legal profession but companies should seriously clip the wings of their corporate lawyers. They should put them in a glass case with a sign “break in case of actual legal need” because left unfettered the corporate legal goons end up hurting their companies as frequently as helping.
I saw this at SAP with a frightening degree of frequency. The corporate lawyers would impose an unhealthy degree of control over strategy… I could go on but I think you know what I mean.