US litigation puts CSIRO in a difficult position

The present Microsoft v CSIRO declaratory judgment patent lawsuit in the US places CSIRO in a difficult position for many reasons. Recent changes in US patent law, government policy issues, and inherent imbalances in patent litigation will require CSIRO management to make some very hard decisions.

First, changes in US patent laws since CSIRO filed its wireless LAN patent application operate against CSIRO. The CSIRO's US patent which is the subject of the present lawsuit was filed in late 1993 using a particular style of patent claim language.

However, in the years since 1993 the US federal courts have completely inverted the law on how such claims should be interpreted. The style of the CSIRO patent claims, which was once considered to be very broad, is now considered to be very narrow. Current patent owners such as CSIRO, who filed for their US patents more than 10 years ago, to use a football analogy, had the goal posts shifted on them after their kick was already in mid-air. So CSIRO may have a hard time convincing a judge that, for example, the signal and data processing techniques, antennas, and signal modulation techniques used today by the alleged infringers are equivalent to the 1993 technology that CSIRO described in its patent.

Second, CSIRO is in a difficult position from a government policy perspective. On one hand, Australian taxpayers funded the research that resulted in the CSIRO patent. So CSIRO arguably has an obligation to seek to prevent third parties from misappropriating the Australian government property that the CSIRO patent defines. On the other hand, US patent litigation is very expensive and is always high risk. So spending millions of dollars on the present lawsuit may be considered irresponsible gambling by CSIRO using Australian taxpayers' money. (A patent owner generally must spend more than $US2 million to litigate a US patent through trial and appeal.) US patent litigation is always high risk because there is simply no such thing as an "open and shut" patent case. The technical vagaries of this area of the law often make it very difficult to predict which side will win.

Third, inherent imbalances in patent litigation create difficulties for patent owners. Like most patent owners, when CSIRO filed its wireless LAN patent it likely spent no more than a few thousand dollars preparing the patent application, meaning that it paid a patent attorney to spend about 15 to 20 hours drafting the patent text and preparing the patent drawings. But now, that modest document must withstand an onslaught from some of the world's most powerful corporations.

Microsoft alone has an annual patent litigation budget of about $US100 million. To prepare the present case, Microsoft, Apple, HP and Netgear have hired some of the best patent litigation firms in the US. Those lawyers will now marshal all their skills to demonstrate that the CSIRO patent is either invalid or is otherwise not infringed by their clients' products. That presents a big challenge to the CSIRO litigation team.

Nevertheless, many well drafted patents have withstood similar onslaughts in other lawsuits and resulted in victory for the patent owner. During the next year, the parties in Australia will conduct a busy and expensive "discovery" process, involving depositions of CSIRO employees and former employees, responses to questions called written interrogatories, and lots of posturing. Judge Claudia Wilken will then decide whether the 1993 patent claims of CSIRO are broad enough to cover the current wireless LAN products of Microsoft, Apple Computer, HP and Netgear.

Ernest Graf is a registered US patent attorney working with Fisher Adams Kelly in Brisbane

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