Path: utzoo!telecom-request Date: Mon, 13 May 91 09:19:22 EDT From: Jerry Leichter Newsgroups: comp.dcom.telecom Subject: Re: Hayes Wins Damages on its Command Set Patent Message-ID: Organization: TELECOM Digest Sender: Telecom@eecs.nwu.edu Approved: Telecom@eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu X-Telecom-Digest: Volume 11, Issue 355, Message 2 of 9 Lines: 33 In a recent issue of TELECOM Digest, Seng-Poh Lee comments on the Hayes patent by finding it "interesting" that Hayes went after "smaller retail modem manufacturers" when many others, including the likes of AT&T and IBM, also make Hayes-compatible modems. He anticipates "a long court battle" with these guys before they pay up. In fact, he's probably dead wrong. Historically, the larger vendors are usually much more willing to pay reasonable royalties than to fight. There are a number of reasons for this. First, the big guys are not trying to survive by being the absolute lowest-cost producers. As a result, they can more easily pass through a small royalty than the scrappy "cut everything to the bone" price competitors, to whom every penny counts. Second, they have much more to lose than to gain: The courts have become much more willing to enforce patent rights of late, sometimes with BIG penalties. Companies that ask their lawyers whether they can safely ignore a patent claim are likely to be reminded of Polaroid's case against Kodak, which culminated in huge damages and in Kodak being forced entirely out of the instant photography market. Finally, the big guys sell "peace of mind": The last thing their customers want to hear is that the stuff they purchased is under a legal cloud. Naturally, to avoid being taken for chumps by anyone with any kind of tenuous patent claim, even the big guys will check a claim out carefully. But for a claim for which there is a reasonable case -- and certainly one that has already been accepted by a court will look VERY reasonable -- and for which the licensing demands are reasonable, the decision will usually be that it's better to pay than fight. Jerry