We may have to make a slight revision in a classic American fantasy. It's the one where a deep-thinking loner, considered mildly loony by most of the folks in his neighborhood, slaves away in his garage and finally comes up with the invention that will change the world. As the triumphant music soars, we do our minor edit: Instead of shouting "Eureka!" or "Darling!" or "Mr. Watson, come here; I want you!" the inventor of the 1990s will make the impassioned declaration: "Quick, honey, get me the best patent attorney in town!"
In this sue-happy era, few have been quicker to turn to the courts than the nation's inventors and the companies that are marketing their discoveries. And for an excellent reason: They usually win. Though no definitive figures are available, industry officials estimate that at least 10,000 patent-infringement suits are in court dockets and that plaintiffs, who in recent years have won 80 percent of the cases, could be enriched by hundreds of millions of dollars in damages and royalties.The fancy name for what's at stake is Intellectual Property Rights, or IPR - the umbrella term for patents, copyrights, trademarks and trade secrets - and companies large and small are getting into the act.
The year's first major IPR ruling was handed down in San Francisco, where Hayes Microcomputer Products Inc. of Atlanta was awarded $3.4 million against three companies by a federal jury. More than 300 companies make Hayes-compatible modems, which connect computers to telephone lines, and a Hayes spokesman said many companies had been awaiting the trial's outcome before agreeing to pay royalties.
While the headlines about IPR have focused on such major corporations as Polaroid, Eastman Kodak, Exxon, Lubrizol and Apple Computer, smaller operations are increasingly using the courts, too.
As William Hilsman, chairman of International Mobile Machines, which has researched and developed basic digital radio technology for the booming cellular phone industry, put it to me, "Savvy companies are mining for gold in their patent files. Technology companies that do a lot of R&D are always generating patentable ideas. Now they are setting up intellectual property rights divisions to exploit the royalty potential on these patents. The bottom line is that if a company spends millions of dollars to develop a technology, why should it allow other companies to walk away with the idea - and the profits?"
Perhaps the most spectacular coup for a one-man operation was the intermittent windshield wiper invented by a Detroit professor, Robert Cairns, in 1963. Claiming that his invention, which makes it possible to operate wipers at slow speed during drizzles, had been illegally adopted by major auto companies, Cairns has accepted a $10.2 million settlement from Ford (after a 12-year suit) and is pressing suits against General Motors, Chrysler, Mercedes-Benz, Toyota and others.
The highest patent-infringement award was won by Polaroid when a federal court forced Eastman Kodak to abandon its instant-photography business and pay $909 million in damages (reduced to $564 million late in 1990). But other big hunters are on the prowl:
- Apple Computer is awaiting a decision in its suit against Microsoft and Hewlett-Packard to determine who owns key parts of the "MacIntosh" mystique.
- Genentech, a key player in the biotechnology industry, has sued Genetics Institute over the clot-busting drug plasminogen activator, and the defendant has countersued to cover the costs of what it alleges is a spurious suit.
- AT&T has sent letters to a number of com-putermakers and software publishers claiming that they are infringing a 1985 Bell Laboratories patent that covers basic software technology for running several programs simultaneously on a computer display.
If everybody from the telephone company to the guy fiddling with the windshield wiper is looking to the courts these days to protect against intellectual piracy, the next generation of engineers and scientists seeking to build a better mousetrap may have to come up with one with a built-in attorney.
From "Mr. Watson, come here" to "Say cheese, Counselor" in barely more than a century; only in America.