[Jewelry making - Article 00237] - Re: [Orchid] Argentium patent and patent application

[James White]

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    Essentially Trevor is right, the worry over the patent claims is
    exaggerated and misplaced. There are two sides of the coin and there
    are reasons why they are the way they are as, I hope, will be clear
    in a minute. But, also remember, IANAL so if there is any requirement
    that YOU need legal advice, please seek it ASAP from qualified legal
    counsel. 

    On the patenting side of the coin there is a principle that says (and
    I paraphrase since I don't have time to dig out the exact language)
    "any claim that claims all the elements of an allowed (or in
    litigation, valid) claim and then some more elements THAT ARE
    NOT/EITHER OR NOVEL NOR NON-OBVIOUS is by definition novel and
    non-obvious ANYWAY. In other words if the claim for the metal
    formulation stands then so does the claim for that metal formulation
    PLUS any other common method of use or thing made of it, etc. Likely
    that seems counter-intuitive until... 

    The other side of the coin is patent enforcement and rights. On this
    side (and again I paraphrase) there is a principle that the inventor
    is entitled to one and only one bite of the revenues from their
    invention, when they've gotten their bite they've exhausted their
    rights to any compensation from activities/sales down the line even
    if they ACTUALLY INFRINGE other claims of the patent (even additional
    patents!). How does the inventor get that bite? Generally they ain't
    but two ways, make and sell the root claimed metal (in this case) or
    license the making and selling of it. Certainly they could "do it
    all" and make the metal and make all the jewelry and sell it but
    trying to do that they quickly run into human limitations---the net
    result of which they would make far less money if they try to do it
    all themselves than if they get their (initial little) bite and let
    others get their piece of the pie too. Peter is wisely taking the
    former course. 

    So, if you buy your Argentium Silver (AS) from a the patent owner or
    licensed source or a seller who has bought from either, etc., (no
    matter how long the chain or what the markup in between) then Peter
    has gotten his bite, he is entitled to no more regardless of what you
    do with that AS. (Of course if you are outside a country where Peter
    has patents on AS or methods of its use or finished products from it,
    then you are free to make AS yourself or buy it from UNLICENSED
    sources outside those countries where there are enforceable patents.)

    So why would Peter take the little bite of a small licensing royalty,
    say 5% of AS wholesale price (maybe 60 cents an ounce--raw guess), at
    the beginning of the chain yet still claim in his patents all the
    downstream AS products/processes too if he isn't going to get a
    bigger bite by soaking you for 5% of the final product retail price
    (say a lucrative $5 on a $100 retail price jewelry piece or $50 on a
    $1000 piece)? 

    Scenario 1. You, the foolish jeweler, don't want to pay the extra 60
    cents an ounce PLUS whatever his licensee extracts from you for HIS
    OWN piece of the pie (if he can't make more via AS than raw silver
    then he won't even play the game--unless he's "business" crazy,
    which happens). You decide that rather than paying the (wild guess)
    $2-$3 extra per ounce you STILL want the AS benefits which have MORE
    value to you than plain silver but you would like to pocket that
    extra $2-$3 for yourself too. So you make your own AS (after all the
    patent explains how one of your skill can do it) and also you make
    your $1000 piece. Likely you begin to see where this is going:-). You
    sell your $1000 piece, pocket the extra $2-$3 with a smile------then
    the cease and desist letter from Peter's attorney arrives in the mail
    asking for you to either quit making and selling what Peter's patent
    rights cover and also to fork over $300 (you've not in a position to
    negotiate and this is a "one time" charge really) as Peter's
    compensation plus legal fees... 

    Just one hour of an attorney's time is going to cost you maybe the
    savings on making your own AS for 50-100 ounces or so. Hmmm..., real
    smart move, saving the $2-$3. However, being a total idiot---and
    ignorant of patent law too---you decide all Peter is entitled to is
    the $2-$3 his manufacturer would have gotten from an original AS
    sale. You plunk down $2,000 to an attorney who will fight for you
    (cash up front, of course), give Peter only his due, no more! Since
    you already knew about the patent, and provided you're willing to
    shell out the $30,000 to $50,000 (or more if you or Peter have
    "crafty" lawyers) that it takes just to get the case to court, the
    judge or jury happily award Peter "willful infringement" treble
    damages at the $300 level (the jewelry made from AS claim, not the
    root AS metal claim), i.e., $900 on your $1000 piece---and the judge
    caps that with full legal costs too---a mere $700,000 for Peter's
    hard working attorneys (documented billable hours! at LITIGATION
    rates!!) 

    Scenario 2. You the crafty jeweler, buy from or make your AS outside
    countries where Peter has a patent then, since where he has patents
    is really where the market is, you import it into (or export it to) a
    country where there is a patent. (The right to stop AS crossing the
    border into a country where Peter has an enforceable patent is one of
    his patent rights.) Let's guess, which is Peter going to want to sue
    you (or the importer/fabricator/seller) for in his infringement suit,
    the 60 cents per ounce of AS or some reasonable compensation on the
    finished piece value as his patent claim entitles him to? 

    This patent game has been worked out in the courts and the
    legislatures for over 5 centuries. I strongly urge you not to try to
    play it with some half baked, ill-informed, personal "invention" of
    what patent law is. 

James E. White
Inventor, Marketer, and Author of "Will It Sell? How to Determine If
Your Invention Is Profitably Marketable (Before Wasting Money on a
Patent)" Info Sites: www.willitsell.com www.inventorhome.com,
www.idearights.com www.taletyano.com www.booksforinventors.com
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