Wednesday, June 02, 2010

Hasbro v. Buzz Bee: Nerf Wars and Super-Soaker Nausicaans

In a patent litigation development that I applaud, Hasbro sued two of its competitors -- Buzz Bee Toys and Lanyard Toys -- for what appears to be flat out copying of its Nerf-N-Strike and Super Soaker products. Whatever the merits of the patent claims, I have to look kindly on a competitor using its patents the way they were intended to be used -- to exclude a competitor from a market that the patent holder has legitimately monopolized. Hasbro is actually using its patents to protect its very profitable market segment and is punishing companies who are competing without expending the time and effort necessary to develop their own products.

Is Hasbro being a bully by using its patents to beat up on its smaller rivals? I don't think so. If you believe that patents have any economic worth, their primary utility is to enable a company to protect its competitive place in the market and that the damages caused by the infringement of a patent by a competitor are competitive injuries. This is how we know how much a patent is really worth -- by how much infringement of that patent harms the competitive position of the patentholder. It is this kind of patent lawsuit -- between competitors -- which validates the patent system in the first place. If a patentholder cannot use its patent to maintain the competitive position it gained by its patented innovation in the first place, I do not see much point in the patent system at all.

So, bravo, Hasbro -- just don't put these weapons into the wrong hands!

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