Sramana: In your history of the 11 years, have you litigated using these patents offensively before now?
Zafar Khan: Yes. As the market becomes more interesting with shorter sales cycles, it is natural that more people want to get into the marketplace. We are trying to make it more well known that we are the patent holders and we are good people to work with. If people want to get into the marketplace to offer these services, we offer them compelling ways for them to work with rPost. We try to educate the marketplace by providing patent numbers and the elements of patent litigation available on our website for that reason. Unfortunately, we have had to use the court system to try and enforce our patent rights.
Sramana: How much have you had to spend on litigation to defend your patents?
Zafar Khan: What we spend and what another entrepreneur might have to spend are not necessarily going to be equitable. It depends on how you are going to defend, how good your technical expertise is, and what types of lawyers you are using. There are industry benchmarks that talk about patent litigation costs, but I think in some ways it is a very specific area of law which will lead you to specialists. Specialists are expensive.
The important thing about our company is that we have a very nice product and a broad set of innovations that we have brought to the market. What we are doing is not litigating for the sake of trying to simply license the technology.
Sramana: You have built a business selling products. The company is not just about licensing and royalties and those types of companies are easier to build. The ones that are predicated upon licensing have different challenges, although some like InterDigital are doing it.
Zafar Khan: InterDigital started with a very good international telecom business. They did not start by licensing patents, but they ended up doing well with that licensing. There are lots of occasions where there are small firms set up to acquire patents so they can then license them. That is not what we are about. We have invested heavily in bringing a product to market and our investors certainly want us to protect our inventions. That is why we focus so hard on trying to educate and partner with other companies. We also alert them that if they choose not to work with us and try to replicate that technology, we feel that is like trying to take someone’s property. We have to defend our position to whatever cost and extent that takes, and that is what our shareholders want us to do.