Originally posted on the Tinker’s Guild Tech Forum

SP Suit FAQ:
by Doc Nickel

Okay, what's going on?

-Smart Parts, maker of the Shocker and Impulse paintball guns, is currently suing Indian Creek Designs (makers of the Bushmaster and BKO) for Patent Infringement.

What patent are they supposedly infringing?

-This One. It was recently updated and expanded over the original January '96 filing.

What do you mean "expanded"?

-They added to the patent, to cover a broader area, to cover more than just what the original patent was intended for. Instead of simply patenting the Shocker itself, as the original patent was filed for, the expansion now allows them to make the claim that it covers any paintball gun that uses electricity, a switch (for power or the trigger) and/or a solenoid to fire a paintball.

Click here for more information on “expanding” a patent

So?

-So that means Smart Parts has essentially patented electronic paintball guns. Period, end of conversation.

You said a switch. How about we use a button, not a switch?

-Won't work. The 'switch' part can mean either the power switch (turning the gun on and off) and/or the trigger switch (used to fire the marker.) A button is just a different kind of switch.

Besides which, the patent as interpreted now, includes the very idea of using electricity to fire the gun. It also can cover the use of solenoids, and a solenoid can be interpreted as either a mechanical solenoid, like used to actuate the sear in an E-Mag/X-Mag or Black Dragun, or an air valve solenoid, as used in Bushmasters, Intimidators, Angels, E-Blades or Matrixes.

Can they do that?

-Technically, yes. The individual parts are not patentable, but the assembled parts, when used for a specific purpose, ARE patentable. It's like, say, a GeForce video card: The individual components used to make the board are not patentable (or have been patented by others) but when they're all assembled into a working card, the entire card as an assembly is indeed patentable.

SP cannot patent a battery, they cannot patent a switch. They cannot patent electricity. But they CAN patent the use of a circuit board controlled by a battery, activated by a switch, which runs a solenoid, and used to fire a paintball gun.

Isn't that extremely broad?

-Yes. The original patent was for the Shocker electropneumatic paintball gun, among the first production electros. However, the recent expansion of that patent broadend it out to include any electropneumatic paintball launching device.

So what does that mean?

-If the suit goes through, SP will have precedence; in other words, official, court-mandated acknowledgement that ICD's markers were indeed infringing on the patent.

So ICD will have to pay off SP?

-More than that. Chances are SP will demand royalties on all electronic ICD products made to date. That would include all semiauto Bushmasters, all Defiants (made for Bob Long by ICD) and all BKOs.

That doesn't sound so bad.

-Doesn't it? What if SP asks $100 per marker made? There's no limit to what SP could demand, if the courts side with them. How many guns has ICD made, 20,000? If SP only asks $50 a gun, that's a million dollars that ICD would have to cough up. How many Defiants did they make? 10,000? There's another half-million. BKOs? They've been selling well, but they're pretty recent, call it between 2,000 and 7,000. There's another hundred to three hundred and fifty thousand.

Meaning ICD might have to come up with nearly two million dollars to pay for guns they've already made.

Okay, that's pretty steep, but it's not the end of the world. Another $50 per gun isn't too bad.

-That assumes ICD can afford two million, and that assumes SP will only ask $50. There's no reason they couldn't demand $75, or $100, or $200 per gun.

Ouch.

-On top of that, the current rumor floating around says SP might ask $1 million for the license to produce electronic markers. So in our SWAG example, ICD might have to come up with $2 million to pay for guns they already made, plus another $1 million to buy the rights to continue making Bushies and BKOs.

They can't afford that?

-I doubt it. Contrary to popular belief, not many of these paintball manufacturers make a couple of million a year. Several might have sales around a couple mill each year, but after payroll, utilities, advertising and other costs, the profit margin is considerably lower than that.

Yes, they're making money, but even Tom Kaye or Bud Orr couldn't pull $3 million out of the bank to pay the fees. It's very likely it would absolutely break ICD and they'd go bankrupt.

Is it really that bad?

Yes and no. The recent event was that a judge approved SP's right to sue ICD over the infringement. We don't know what's happening, we won't know how it'll turn out until it's over.

Why are they just suing ICD? What about Bob Long, WDP and Kingman?

-Very good question. First off, WDP is not an American company, nor is Kingman. There's speculation that ICD was "first on the list" sue to the fact Jerry Dobbins, the owner, has been ill and unable to help run the business on a day-to-day basis. Go after the weak ones first, in other words, and get the precedent set. Then go after the ones with money- like WDP.

Will WDP and Kingman be affected, if they're not US companies?

-Not directly, but they would when they try and import a marker that falls under the SP patent into the US. In other words, they could sell them with no difficulties in England, but if they tried to import Angels to the US, they'd be legally subject to the licensing fee.

So what happens if ICD loses?

-SP then systematically goes around threatening the makers of other electros and demanding their past royalties, their licensing fees and setting up to accept royalties from future production.

AGD would have to pay for all the E-Mags and X-Mags made to date, W'Orr would probably have to pay for any and all W'OrrBlades, Bob Long would have to pay for all the Intimidators. Kingman would have to cover the E-Spyders (and they've sold tens of thousands) and so on.

Is that all?

-That's not enough? We're talking tens of millions of dollars from companies that probably cannot afford it. Those fees will result in higher costs to you and me, the average consumer.

What? How?

-Increased costs of production are always passed on to the consumer. If AGD has to pay another $100 per gun to make the X-Mag, and has to recoup their million-dollar license fee, they will pay it by raising the cost of the gun by the same amount.

In other words, the cost of every electro out there, from the $300 Black Dragun to the $1,900 Dragon Intimidator will cost more, guaranteed.

What about the Impulse and Shocker?

-Good question. SP will have the power to force other makers to raise their prices, so SP could, theoretically, leave the prices on their line alone, or even drop them slightly- they'll be awash in cash, after all- meaning you might have a choice between a $800 Bushmaster or a $450 Impulse.

However, with SP's monopoly, they could raise prices on theirs as well. Instead of that $800 Bushy, you might have to go for a $750 Impulse.

What's wrong with that?

-If you like the Impulse or Shocker, that's fine. Also assuming you don't mind paying more. But it's well established that both markers are no longer- if they ever were- "top of the line". The Shocker is overly bulky and has horrible gas efficiency, combined with a relatively slow rate of fire. The Impulse all but requires the addition of an LPR in order to be tournament-ready, and there's some common, known problems with threads stripping out of the body due to the use of lower grade aluminum.

Also, it will have the effect of severely restricting the development of new markers. It already costs a bloody fortune to design and manufacture a new gun, but it can be done for under half a million. Now triple that- in addition to half a mill in development, you have to pay another million in licensing just to be allowed to produce it.

It's hard enough as it is to bring something to market without massive additional costs like that.

What about existing guns? We going to have to turn them in?

-Oh no. Anything already sold or already "in the pipeline" is fine. If you already have a Bushy or a Timmy or a Dragun, you won't pay anything more, nobody's gonna take it away, they won't become "illegal" or anything of that nature.

It will only affect later production (and the companies that have to pay retroactive royalties.)

The one upside is that resale values of used markers will increase. The downside is that the cost of new markers will ALSO increase.

What about conversions? Like the RaceGun or E-Blade kits for 'Cockers?

-Good question. No one knows. It's likely that'll be a gray area. It's possible that the kits won't be affected, but any mass-produced completed guns will. Meaning you'll probably be able to get E-Blade kits, and you'll certainly be able to get 'Cockers (being wholly unaffected by the suit) but you won't be able to buy prebuilt W'OrrBlades, for example.

Isn't one of the people at Smart Parts a patent attorney?

-Yes. According to this document from the FTC, two individuals currently associated with Smart Parts were involved in an "invention submission" business, which the Federal Trade Commission shut down for "deceptive practices".

What's "prior art"?

-Prior art means a patent application or document referenced in a patent, that deals with the subject OF the patent. Meaning if somebody patented the sandwich in 1985, and then somebody tried to patent a "method for holding meat between two slices of bread" in 1990, the sandwich patent would either invalidate the later patent, or would have to be referenced as to how the later patent is different from the prior one.

Is there "prior art" for the SP patent?

-Maybe. There's a 1971 Patent by the US Navy for an electric, air-powered device for launching "dye filled balls" for training purposes. If this patent is still valid- and it may not be- it would be "prior art" for the SP patents. Interestingly enough, SP's documents mention this patent, so it's entirely possible it's not valid for whatever reason.

So what should I do?

-A good question. Personally, I plan to stop buying any Smart Parts product, and I'll be actively recommending that others do the same.

(Corrections and/or updates to any of the above are welcome.)

Doc.

Posted on Jul 22, 2003, 10:37 PM