Original: http://www.heckel.org/Heckel/ACM%20Paper/bigcomp.htm

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Big Companies Do Sue Small Ones

While the League says that big companies will use patents against small ones, it cites no example. Two came to my attention. (I was contacted because I had arguably relevant prior art on the first patent.) In both, IBM sued former employees to get ownership of patents on technology developed on their own time, unrelated to their work and only after the technology proved to have value in the market.

IBM v. Goldwasser Civil 5:91 00021 D. Conn.: IBM encouraged employees to develop software products on their own time and seek patent protection for them so IBM could evaluate them for marketing. Goldwasser developed such a software product, but IBM rejected it; he left IBM stating he intended to pursue his technology, as he did. Six years later, another company introduced a product that seemed to be infringing his patents and he sued them. That company claimed it was covered under its cross-license with IBM; IBM sued Goldwasser to get ownership of the patent.

IBM v. Zachariades C-91 20419: Zachariades before and while working for IBM developed on his own time a plastic valuable to the medical industry. He kept IBM informed about what he was doing, applied for patents, started his own company, and licensed the technology to a medical prosthesis company. When he was not paid, he sued and a jury awarded him $99 million IBM "suddenly" found out what was happening and fired, and sued, him for the the patents-telling him they did it in part to "terrorize" other IBM employees.

Companies like to hire litigators who know what it is like from the other side. In both cases IBM is represented by the same firm that represented Edwin Armstrong, the great inventor of modern radio when David Sarnoff and RCA were refusing to respect Armstrong's rights. Ken Burns tells the story in his PBS documentary, Empire of the Air: On January 31, 1954 Edwin Armstrong under the strain of RCA's tactics-well dressed as always, in a suit, overcoat, scarf and gloves- jumped from his 13th floor apartment onto the third story roof of the River Club below[29]. His widow won all the patent suits.

Having hired a firm that experienced first-hand the tactics that caused a great inventor to kill himself, IBM should be able to, by suing Goldwasser and Zachariades, "terrorize" its employees.

Postscript: October 30, 1995: Goldwasser lost his case in a 2-1 decision at the CAFC. Zachariades appears to have won, but it may be being appealed.

(Last updated on 10/06/98)

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