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p r a c t i c a l w i n e r y & v i n e ya r d n O v e M B e r 2 0 1 4 99 w i n e m a k i n g (and many foreign patent rights) by using their methodologies and improved technologies. This puts technologically advanced wine producers at a tremen- dous disadvantage because they can quickly and unknowingly bar their pat- ent rights on what could be valuable technology to protect. Rise of the wine patent trolls Another lesson that can be learned from the patent explosion in the finan- cial industry is the rise of patent war- fare. It is inevitable that the moment patents become readily assertable in a technology space, those with patents in that space will seek to monetize them. Past experience shows that this gives rise to non-practicing patent-enforce- ment entities, sometimes referred to as "patent trolls." After the law changed on business- method patents, financial companies had to start dealing with patent- enforcement entities and numerous and continual threat letters of patent infringement, continually obtaining advice from counsel in order to deflect a finding of willful patent infringement if the companies were ultimately sued. Financial companies are still grappling with these patent trolls 15 years later. Furthermore, and most relevant to wine, many of the larger patent- enforcement entities are universities. Universities are seeking to make money from their novel research and have not been hesitant to sue for patent infringe- ment. In fact, one of the larger recent patent infringement damage awards was the $1 billion-plus verdict that Carnegie Mellon obtained over Marvel Semiconductor. In the wine industry, one of the largest U.S. patent holders is the University of California, Davis, which holds patents in many aspects of wine production, includ- ing patents on unique types of grapes themselves. The University of California and UC Board of Regents are no strang- ers to patent infringement cases in fed- eral court in other technologies. The wine industry should take heed of the change in U.S. patent law and be sure to timely protect their inventions. The University of California has used its biotech patents before, famously set- tling an infringement case with Genen- tech for $200 million. UC has also taken advantage of having patents in the technology curve area of Internet com- merce and used software patents to sue very large entities like Facebook, Dis- ney and Wal-Mart for patent infringe- ment in 2012. Is there any doubt that universities would bring suit against wine companies if the opportunity pre- sented itself? Future planning in wine needs to include patents As one might expect with the change in the legal landscape, the larger financial companies such as American Express, Cantor Fitzgerald and even the Chicago Mercantile Exchange started to hire their first in-house patent attorneys in response to the rise of patent litigation and then set up internal patent-prosecu- tion programs. It will not be long before the wine industry follows suit. The large U.S. pat- ent holders in wine technology include, as one might expect, the largest wine producers such as E. & J. Gallo and Dia- geo. These large companies certainly have the capability and resources to cre- ate a very large patent arsenal quite quickly when the industry starts to spar over patents. Patents are what they are Prior experience shows that it is only a matter of time before patents pervade wine production and distribution because patents are simply a by-product of new technology. The problem is that the patent ramp-up will be very quick, just as we have seen with technology explosions in other industries. Those in the wine industry should take heed of the change in U.S. patent law and be sure to timely protect their inventions. It is advisable to have a plan in place to handle infringement threats and actual litigation, such as seeking adequate insurance against intellectual property suits. One can lament this onset because threats of patent infringement are likely to become commonplace in the wine industry. Or one can revel in the new technology because it will spur U.S. pro- ducers to create better wine with U.S. patents protecting our competitive advantage. Either way, those in the wine industry cannot put their head in the sand— here come the patents. PWV Lance D. Reich is a patent attorney rep- resenting wineries, distilleries and breweries for 20 years. He practices law at the Seattle, Wash., office of Miller Nash LLP.