ttools (A) Case Write-up
Summary: Hazzard invented a pen/stylus device, used for PDAs, which was a pioneer in the market. After the failure of trying to license his design to a manufacturer of pens, Hazzard and his wife Leigh founded ttools company to assemble and sell the pen by themselves in early 1998. Hazzards self-financed a utility patent application for their pen/stylus device before the device was launched. Prior to writing a business plan, the Hazzards’ patent attorney drafted a nondisclosure specifically for the meeting with Palm Pilot, who owned the largest PDA market share in 1998. Palm thought the pen would be a great accessory for the Palm Pilot and invited Hazzard to advertise through Palm email ad system. With the utility patent and marketing strategy, ttools got huge success once the pen/stylus was known by customers through email. In October 1998, Hazzard learned that Palm had contracted IDEO to develop next-generation Palm PDA and a pen/stylus device similar to ttools’. On June, 1999, the USPTO issued ttools, but the attribute of 3Com was not negotiable, they would not give up the product because of the patent issue.

Recommendation: I would like to recommend the third path. Firstly, the IDEO’s design clearly infringed on ttools’ patent, there was no risk to fail on course. When it comes to business risks for ttools, I think Hazzard should not be too pessimistic, ttools was on the right side, and this would be a litigation between a startup and a big corporation, who owned the biggest market share at that time, the litigation would definitely attract majority focus in PDA market. Once the judgment was pronounced and it was beneficial for ttools, the whole judgment process could be a special and powerful advertisement. For the worry about Palm’s limitless resources for lawsuit, since Holmes began to work on ttools’ patent even before the product