Lawsuit, technology, Track Changes, Transparency

Lawsuit Update and a Tale about Bicycles

In the past couple weeks, the first two court rulings have come out concerning our battle with the Akin Gump law firm. Both rulings have been in our favor. The first ruling denied Akin Gump’s motion to dismiss, instead allowing four of the five claims in our countersuit – with the judge calling them “plausible”. The second ruling denied Akin Gump’s attempt at a preliminary injunction to stop us from responding to actions from the U.S. Patent Office. The judge found that “there is not a substantial likelihood that (Akin Gump) will prevail,.” She then added “(T)o preclude Xcential from moving forward…would discourage invention, it would discourage innovation, it would discourage companies from investing their own resources to try to come up with workable solutions to commonly identified problems,.”

After reading the transcript, I have an interesting analogy to make. It is based on an analogy that the Akin Gump attorney chose to use – comparing our dispute to that of inventing a bicycle. While it’s not a perfect analogy, it is still a very good analogy.

Imagine you have an idea for a two-wheeled mode of transportation that will help you do your job more effectively. You discover that this idea is called a bicycle and that there are several bicycle manufacturers already – so you approach one to see if their product can do the job. While this company did not invent the bicycle, they specialize in making them and have been doing so for many years. This company only make bicycles. They are not the manufacturer of the commodity materials that make up a bicycle such as the metal tubing or even the tools that bend the tubes to make handlebars. While not a household name, they are very well known among bicycle enthusiasts around the world.

However, you discover that there is a problem. In the highly regulated world of bicycles (maybe automobiles would have been a better analogy), this bicycle maker doesn’t have a bicycle that conforms to your local regulatory market. You have a quick 30-minute call with the bicycle maker, and they say they’re familiar with the regulations in your market, but that making the changes your local regulations require and getting those changes certified is a costly business and is only done for customers willing to help foot the bill. You indicate that you’re still interested and accept their suggestion that they build a prototype, at no charge, of the bicycle that is suitable for your regulatory market. You send them a hand drawn map of the routes you want to ride the bicycle on so that they can understand the regulatory concerns that might apply.

With the suggestion of funding, the bicycle maker goes off starts building a demonstrable prototype of a modified bicycle model that conforms to your local regulatory requirements. As a potential customer for this localized version of the bicycle, you get limited updates from the salesperson you were working with to ensure that you’re still interested and to indicate that the prototype hasn’t been forgotten. He makes a point of buttering you up, as salespeople are wont to do. You never interact with the engineers building the prototype at all.

It turns out that the regulations require mudguards over the wheels and reflectors on the front and rear. In the process of attaching these parts, the engineers at the bicycle company come up with some nifty brackets for attaching the mudguards and reflectors to the bicycle frame in accordance with the regulatory requirements. While the mudguards and reflectors are commodities, the brackets used to attach them are novel, so the engineers apply for patent protection for these brackets. You play no role in the design or manufacture of these brackets.

When the bicycle maker brings their modified bicycle to your office to show you what can be done, you’re wowed by the result, but don’t really have the budget to help cover the cost of getting the changes certified. The bicycle company shelves the project without a paying customer.

Later on, while pondering whether to patent your idea for a bicycle, you come across the bicycle maker’s patent application. Without much of an understanding into the making of bicycles, you conflate the general idea for a bicycle (it was invented decades earlier and is prior art at this point), a bicycle that is adapted to your regulatory market (not something that is patentable), and the nifty brackets that hold the reflectors and mudguards on the frame and are necessary to achieve regulatory compliance in your local market (and that you played no part in designing or manufacturing – but are patentable).