A Bulwark Against Trolls

Canon established a consortium of the world’s top companies to counteract misuse of patent law. Now, one of its leaders fights in the trenches for the company’s inventions

For real-world businesses, thwarting trolls is no fairy tale. Seymour Liebman, who wields forty-two years of experience at Canon U.S.A. to protect its intellectual property (IP) from preying patent trolls, knows this all too well.

Canon ranked as the third-largest US patent holder in 2016 with 3,665 patents total, marking its thirty-first consecutive year among the top five since the company produced its first camera in 1955. Consumers have long lauded the digital imaging solutions giant for its iconic products—including cameras, printers, and scanners—and Liebman is on the front line as Canon explores new facets of the innovation economy.

DID YOU KNOW?

If Seymour Liebman wasn’t in a legal profession, he says he would be a math professor or a CPA.

“We’re getting very involved in the medical field,” says Liebman, who lists Massachusetts General Hospital and Harvard Medical Network as collaborators. “We’re looking at the world’s thinnest endoscope—basically one millimeter in diameter—which will make surgery less invasive. We’re coming up with some robots to put on patients during their MRI scan. These products will really contribute to society, and it excites me.”

Nevertheless, innovation breeds risk. The high-tech industry fields the majority of all patent lawsuits and nearly 90 percent of those disputes involve non-practicing entities (NPEs), a company that owns patents not used in the design or creation of its product or process, according to the US Patent and Trademark Office. Culpable NPEs, known as patent-assertion entities (PAE)  or “patent trolls,” drain billions of dollars from legitimate businesses each year by claiming extortion-like infringement beyond the patent’s true value.

As executive vice president, chief administrative officer, and general counsel, Liebman says Canon U.S.A., a branch of the Tokyo-based company, once faced about ten to twelve patent troll cases every year.

“I personally got involved with all of them,” Liebman says. “My philosophy is, if we’re right, then we’ll fight, no matter what it costs. Now we get hit by maybe one or two trolls a year because they know we’re going to fight. We’re not going to cave.”

Last year, the overall number of patent lawsuits dropped 22 percent from the previous year, which featured the highest surge recorded during the 500 percent growth in patent troll litigation over the prior decade. Perhaps part of that decline is due to a community of companies defending against such harmful litigation together. Canon cofounded the nonprofit club License on Transfer (LOT) Network alongside other high-tech heavyweights such as Google, SAP, and Dropbox in 2014, granting its members immunity from PAE lawsuits if a troll acquired another member’s patent.

Since then, Liebman says the LOT Network membership skyrocketed to more than one hundred organizations, collectively reducing litigation risks for enterprises of all sizes—from household names such as Ford, Netflix, and Amazon—to vulnerable start-ups. Membership fees are tiered based on company size, so inclusion remains affordable and incentivizes the benefits: The more members, the stronger the legal protection. Between them, members are currently “immunized” against about 700,000 assets worldwide, according to LOT’s website.

Patent trolls used to be able to sue about one hundred companies at once, Liebman explains, costing the average software company roughly $3 million in legal fees per lawsuit.

“If the idea is to eliminate patent trolls, that’ll never happen,” Liebman says. “So if this can prevent us from getting sued in half a dozen cases, it’s worth it.”

That efficiency reflects a core tenet of Liebman’s mind-set, which could explain how he completed a BA in mathematics from Hofstra University in three years, an accelerated master’s degree of science in mathematics from Rutgers University, and a master’s degree in accounting from Long Island University in one year—all before earning his juris doctor from Touro Law Center.

In fact, he began his career as an accountant. At KPMG, he was assigned to Canon on a management consulting contract before joining the audit team. He officially joined Canon in 1975 at the request of the company president.

At that time, Canon was a small company—about one hundred employees instead of the roughly 16,000 employees today—in need of Liebman’s willingness to adapt.

“Our president called me up and said, ‘You’re the national credit director,’” Liebman recalls. “I said I didn’t know anything about credit, but he told me that I’d be fine, and that I was qualified. Then I got another call saying I was also the new head of HR. So at one point, I was involved in a lot of different things.”

One of his assignments included purview of the legal division, which took root in Liebman’s career trajectory.

“My philosophy is, if we’re right, then we’ll fight, no matter what it costs. Now we get hit by maybe one or two trolls a year because they know we’re going to fight. We’re not going to cave.”

“The president pushed me to go to law school at night to make a businessman a lawyer,” he says. “I had no interest in going to law school, but I had no choice, so I did. In retrospect, I’m glad I did.”

To this day, Liebman oversees about fifty lawyers at Canon, leading legal affairs and corporate administration for North America and South America.

Liebman’s diverse background established his belief in seeking perspectives outside his department. He points to how he brought two representatives from human resources and public relations to a patent trial that predicted the correct verdict in contrast to the opinion of the legal team. Liebman also cites outside counsel, such as Canon’s forty-year partnership with Fitzpatrick, Cella, Harper & Scinto.

“We have a very honest relationship, but I tell them we don’t have a handcuff on you so that you have to do our work and they tell us what their opinion is,” Liebman says. “There’s a lot of give and take. If there’s a major trial, I will be there for the prep and arguments, and they’ll ask what our feeling is if somebody is going to be made a partner. We’re never blindsided.”

It’s also something that the firm deeply appreciates.

“As Canon’s outside trial counsel, I have witnessed Seymour’s professionalism, objectivity, creativity, and unfettered honesty on a wide variety of issues and people,” says Nicholas Cannella, partner at Fitzpatrick, Cella, Harper & Scinto. “He is the epitome of a trusted counselor and a treasured client.”

As for Liebman, he’s looking toward the future. As his team safeguards Canon’s latest innovations, the legal leader envisions disruptors within the profession itself. He predicts a type of IBM Watson will streamline legwork.

“Our legal files are huge. We probably have a thousand contracts a year, and using artificial intelligence would allow us to quickly evaluate the data for precedents and red flags,” Liebman says. “It is really going to have a big effect on the legal field.”
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Dorsey & Whitney:

“I’ve had the privilege of working with Seymour for forty-two years.  He’s a consummate professional, strategic thinker, and effective leader. We at Dorsey are fortunate to work with Seymour.”

—Richard Silberberg, Partner