32Intellectual Asset Management
On the attack
the Paris Declaration, requiring, amongother things, that non-military vesselsconverted into military vessels be under theimmediate command of a sovereigngovernment in order for the crew not to beconsidered pirates.Privateering is state-sponsored piracy.The government hands the privateer a letterof marque and reprisal that allows him toseize the property of the state’s enemies.The privateer may capture ships flyingunder the enemy’s flag, sell the ships andtheir cargoes at auction and keep theproceeds. During the first Anglo-Dutch Warof 1652, English privateers seized more than1,000 Dutch ships over a two-year period.In the subsequent Anglo-Spanish war of 1654, Spanish and Flemish privateers inreturn seized more than 1,500 Englishmerchant vessels. Many of the famousEnglish “sea dogs”, such as Sir FrancisDrake, were privateers. Privateering waseffective and cheap – the privateer’s actionscost the government nothing. Privateering,like the creation of corporations, allowsgovernments to pursue policy objectiveswithout any impact on the treasury. Inshort, classical privateering removes mostobstacles to waging war, save for theopponent’s ability to retaliate.IP privateering, unlike classicalprivateering, has associated costs and thesponsor typically stays hidden. The sponsormay outfit the privateer, but secrecy allowsthe privateer’s sponsor to achieve objectivesthat would be difficult, if not impossible, tosecure if the sponsor operated under itsown colours. Thus, IP privateering thrivesin a shadowy world where camouflaging thesponsor’s existence is often crucial.Figures 1 to 5 set out an allegorical storythat illustrates how privateering operates.Here, a frustrated king wants to marry hisbefuddled son off to the beautiful princessof a distant land. Other princesses havealready rejected the king’s matchmaking.Parliament refuses to spend a farthing on aroyal betrothal. The king’s adviser, Sir Peter,devises a cunning plan involving privateers.Sir Peter heads to the Crusty Litigator, atavern crawling with cutthroats,desperadoes and pirates. He presents aletter of marque and reprisal to BarristerBill, the most ruthless pirate around, andthen hands similar letters to the othercaptains at the bar. Before long, ships flyingunder the princess’s flag are being snatchedas prizes all over the high seas. With thisgrave threat to her country’s commerce, theprincess has no choice but to accept theking’s offer. Meanwhile, Barrister Billreturns to his card game at the CrustyLitigator carrying the sack of gold coins thathe earned in service to the crown.
The privateer’s objective is easily understood– cash obtained through a litigation damageaward or settlement. Like any commercialactor, the sponsor’s objective is alsomonetary – albeit not immediately from thelitigation, but rather from the changinglandscape brought by the litigation.To understand IP privateering, one mayneed to recalibrate the sensitivity of theinstrument that one uses to gaugecommercial affairs. IP privateering begins tomake sense when one recalibrates thecurrency unit from the millions at stake in atypical non-practising entity (NPE)litigation to the billions at stake among theworld’s major commercial actors. For acompany with an annual turnover of severalbillion, the prospect of a court judgmentinvolving a few million is more of an irritantthan a major concern. But while a givenlitigation’s immediate costs may beinconsequential at the billion-level filter,the consequences of such litigations mayimplicate serious sums by any reckoning.Assume, for example, that two largecompanies are competing fiercely for a giantsupply contract, with both prospectsrunning neck and neck. Assume further thatone company is perceived to be stronger inIP rights than its competitor, especiallyregarding the customer’s ultimate IP
King Enormé auf Organizzazione bitterly kicksthe royal pooch after reading Princess Aziendaof Erewhon’s graceful rejection of a marriageproposal to the king’s somewhat peculiar sonBrevetti. Undeterred, the king’s ever-ableadviser Sir Peter crafts a cunning plan for“gently” compelling the reluctant bride.