Increasing Litigation Risk with Increasing NPE Activities Exploiting the IoT (Internet of things) Wireless Connectivity Patents

Many market researchers expect that the interconnected IoT devices will create a new market that will result in more than $1 trillion in value added to the global economy within 10 years. Wireless connectivity is the key enabler for the mass deployment of the IoT devices. To assess the potential patent litigation risk for the IoT wireless connectivity, patents that are related to the key wireless standards for the IoT connectivity (LTE, Wireless LAN, Zigbee, Bluetooth, NFC, UHF RFID) are analyzed to evaluate the technology innovation leadership. More than 10,000 issued patents in the US as of 2Q 2015 are reviewed.  Patent disclosures in claims and detail description for each patent are analyzed as to whether the contents are within the scope of key technologies for the relevant standard specifications (3GPP, IEEE, ISO, NFC Forum, Bluetooth SIG). For details about the analysis, please refer “Wireless Patents for Standards & Applications 1Q 2015” (http://www.slideshare.net/alexglee/wireless-patents-for-standards-applications-1q-2015).

More than 3,000 patents hold by more than 160 assignees are identified as the key wireless standard patents for the IoT connectivity. To assess the potential patent litigation risk, the identified wireless standard patents for the IoT connectivity are further analyzed to figure out the patents that might be exploited for litigation: Patents owned by a NPE (NPE Passive) that may be transferred to other entities that might exploit them for litigation; Patents owned by a NPE (NPE Active) will enforce them; Patents owned by a NPE (NPE PAE) will enforce them for monetization purpose; Patents owned by a PE (Privateer) that may be transferred to other entities that will enforce them for monetization purpose; and Patents owned by a PE that are transferred to other entities for the unknown purpose (Suspected Assignment).

More than 700 patents hold by more than 30 assignees are identified as the patents that might be exploited for litigation. PE PAEs, NPE PAEs, Privateers, NPE Actives, NPE Passives hold 44%, 31%, 9%,  8% and 7% of the total patents with the potential litigation risk respectively. The IPR share of patents for the Suspected Assignment is 1%.

To find a specific patent litigation risk, individual patent with high litigation potential is further researched. One interesting fact is that there were the increasing ownership transfers of patents with high litigation potential to several NPEs for the purpose of monetization.

For example, US6519223 (Ericsson: System and method for implementing a semi reliable retransmission protocol) that is a patent used in litigation (Case 6:10-cv-00473, Texas Eastern District Court) transferred to WI-FI ONE, LLC. Other examples are: US8457022 (Nokia: Method and apparatus for providing signaling of redundancy versions) that was transferred to Cellular Communications Equipment LLC is exploited in litigation (Case 2:15-cv-00581, Texas Eastern District Court); US8411557 (Panasonic: Mobile station apparatus and random access method) that was transferred to Optis Cellular Technology, LLC is exploited in litigation (Case 2:15-cv-00300, Texas Eastern District Court); US8935587 (LG Electronics: Method for effectively transmitting control signal in wireless communication system) that is identified as the LTE SEP (Standard Essential Patent) was transferred to Optis Cellular Technology, LLC.

Another interesting NPE activity involving high patent litigation potential is the assignment to and from Cluster LLC. Cluster LLC involved in 45 assignment activities as an assignor (assignee: UPIP, WI-FI ONE, Optis Cellular Technology) and as an assignee (assignor: Ericsson, UPIP) as of 2Q 2015.

For more information, please contact Alex Lee at alexglee@techipm.com.

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Can EU Commission enforce antitrust liability on Nokia’s patent troll business?

Recently, the EU Commission warned Nokia that “if Nokia were to take illegal advantage of its patents in the future (as a patent troll), we will open an antitrust case." The issue will be how the European Commission can enforce antitrust liability on Nokia’s patent troll business.

Article 102 of the TFEU (Treaty of Functioning of EU) prohibits the abuse of a dominant market position. Abuses include (1) imposing unfair or discriminatory terms; (2) limiting production, markets or technical development; (3) applying dissimilar conditions to equivalent transactions and (4) make contracts subject to acceptance of supplementary obligations which have no connection with the subject of such contracts. Generally, a market share in excess of 40% can be considered as indicate dominance dominant market position.

If we assume that Nokia sues smartphone manufactures, because Nokia will not produce smartphones anymore, Nokia will not have the market dominance in the smartphone product market. Thus, the story will be completely different from the recent antitrust accusation of Samsung and Google when they exploit their standard essential patents (SEPs) in litigations, unless Nokia also exploits SEPs and the EU Commission can link the dominant in the technology (patent) market with the product market.

On the other hand, Article 101 of the TFEU prohibits agreements which prevent, restrict or distort competition among EU member states.  Article 101(3) specifies prohibited agreements: (1) fix purchase or selling prices or any other trading conditions; (2) limit or control production, markets, technical development, or investment; (3) share markets or sources of supply; (4) apply dissimilar conditions to equivalent transactions and (5) make contracts subject to acceptance of supplementary obligations which have no connection with the subject of such contracts. Thus, the EU Commission may can enforce antitrust liability on Nokia’s patent licensing business practices if they are under the liabilities of Article 101 of the TFEU.

Considering the history and policy of EU’s antitrust enforcement, the EU Commission may find ways to handle the Nokia’s matters. Antitrust agencies and courts in the EU tend to infer antitrust liabilities from the nature of accused activities rather than their effects. In order to protect competition, antitrust agencies and courts in the EU seek to prevent an interference with the freedom to compete. Thus, the EU commission will willingly interrupt to Nokia’s patent troll business to correct market for more competitive environment.

©2013 TechIPm, LLC

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Standard Essential Patents for Litigation Strategy under Innovation Act

Recently, the U.S. House passed a new legislation (H.R. 3309) to address patent litigation abuses.  Especially, the new law (“innovation Act”) aimed at preventing patent trolls’ frivolous patent litigations and protecting the innovation system.

Two notable provisions that can affect the patent litigations are pleading disclosures and discovery that are included as a new Section 281A and 299A of Title 35 respectively. Specifically, the most significant terms are (1) complaints should identify each patent and claim asserted contrast with the accused products or processes to show how each asserted claim is mapped into the accused products or processes (claim charts) and (2) courts can limit discovery to claim interpretations until a claim construction (Markman hearing) decision is issued. 

The main issue with the two provisions is that usually the details about the legitimacy of the patent litigation allegations can be found only after acquiring information from experts, reverse engineering and infringing party.  Standard essential patents (SEPs) may provide some strategic options for patent litigation strategy to overcome the two provisions because of their rather easy of infringement proof characteristic: if one can establish essentiality of a SEP’s specific claim, one may presume that every standard-compatible products or processes infringe the SEP’s specific claim.

For more information, please contact Alex Lee at alexglee@techipm.com .

©2013 TechIPm, LLC All Rights Reserved

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Round Rock (NPE) Dominates UHF RFID Standard Essential Patents

TechIPm, LLC’s UHF RFID standard essential patent research for the US market reviles that IPR share of Round Rock Research LLC (NPE) accounts for 13% of UHF RFID Standard Essential Patents (SEPs) issued in the USPTO as of 3Q 2013. To evaluate the essentiality of a UHF RFID patent, patent disclosures in claims and detail description for each UHF RFID patent are compared to the most recent version of the ISO/IEC 18000-C technical specifications. Total of 134 issued patents are identified as the potential candidates for UHF RFID SEPs relating to UHF tag and reader products.

Round Rock Research LLC was founded by a billionaire John Desmarais, a famous patent attorney for his won in a $1.52 billion verdict for Alcatel-Lucent against Microsoft in 2007. Round Rock Research LLC became the second-largest NPE following the Intellectual Ventures by acquiring a portfolio of 4,500 patents from Micron Technology Inc., the biggest U.S. maker of semiconductor chips. Recently, Round Rock settled patent dispute with Motorola Solutions. Round Rock Research LLC is now operating successful licensing program collaborating with IPVALUE, an IP monetization consulting firm.

©2013 TechIPm, LLC All Rights Reserved

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Patent Trolls’ Advocates

Are patent trolls social harm blocking innovations all the times? How about having a time to hear the voices for patent trolls in general and their role as patent assertion entities for rights of inventors?

1. Patent troll: 'I'm ethical and moral' (CNN Money)

“Our business model is to give inventors a share of the proceeds from the successful lawsuits it brings against companies found to have violated their patents.  … doesn't give inventors a low-ball upfront offer for their patents and then proceed to make millions from lawsuits without cutting them in on the rewards.”

Ref. http://money.cnn.com/2013/07/02/technology/enterprise/patent-troll/index.html

2. Why We Can’t Kill the Patent System (Wired)

“We have only resorted to litigation when a company has refused to pay us for using our inventions, and even then we have typically settled those disputes, always on mutually acceptable terms.”

Ref. http://www.wired.com/insights/2013/01/why-we-cant-kill-the-patent-system/

3. Exclusive Interview: Paul Ryan, CEO of Acacia Research (IPWatchdoc)

“Our role in the ecosystem is simply to give those disenfranchised patent owners a level playing field by aggregating patents and get an audience with the users of these technologies.”

Ref. http://www.ipwatchdog.com/2013/01/22/exclusive-interview-paul-ryan-ceo-of-acacia-research-part-ii/id=33316/?goback=%2Egde_148749_member_207060543

4. Congress vs. the 'patent trolls' (LA Times)

“Policymakers shouldn't assume that every non-manufacturing company that buys patents is a troll. Patent aggregators can play a vital role in protecting the interests of legitimate small inventors. … the best defense against patent trolls is to stop the patent office from granting bad patents.”

Ref. http://www.latimes.com/news/opinion/editorials/la-ed-patents-trolls-obama-20130701,0,7958623.story

5. FTC should avoid ‘Caddyshack’ approach with patent troll (Seattle Times)

“Solution to the patent-troll problem should be carefully tailored. It must curtail abusive litigation and licensing practices, but not inhibit the secondary patent market by excessive restrictions on other nontroll participants.”

Ref. http://seattletimes.com/html/opinion/2021338547_jayjurataopedxml.html?cmpid=2628

Alex G. Lee, Principal, TechIPm LLC

Patent Litigations against Automobile Manufactures

TechIPm’s research for patent litigations against automobile manufactures reviles a dramatic increase in number of cases this year. Total number of patent litigations against automobile manufactures was 221 between January 1, 2012 and June 30, 2013. Out of 221 cases, the number of cases filed in 1Q and 2Q of this year was 160. Two patent trolls, Beacon Navigation Gmbh and American Vehicular Sciences, accounted for 110 cases of patent litigations against automobile manufactures.

Top 10 automobile manufactures that are accused of patent infringement are as follows.

Ford is the top. Honda, Hyundai, and Nissan are the second followed by Toyota, BMW, Benz, Kia, JAGUAR, Chrysler, and GM. Considering the fact that Kia is a subsidiary of Hyundai, Hyundai is actually the top and accounted for 14 % of the total patent litigation cases.

For more information, please contact Alex Lee at alexglee@techipm.com .

©2013 TechIPm, LLC All Rights Reserved

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Acacia’s new weapon US 8055820: LTE standard essential patent?

Cellular Communications Equipment, a shell company of Acacia Research, sued LG electronics and its customer Telcos (AT&T, Verizon, Sprint, and T-Mobile) for patent infringement (6:13-cv-00508). Cellular Communications Equipment exploited US8055820 that is acquired from Nokia Siemens Networks. The accused devices are LG Escape 4G, LG Nitro HD, LG Optimus G, LG Optimus G Pro (AT&T); LG Intuition, LG Lucid 4G, LG Lucid 2, LG Revolution 4G, LG Spectrum 4G, LG Spectrum 2 (Verizon); LG Mach 4G LTE, LG Optimus G, LG Viper 4G LTE (Sprint); LG Connect 4G, LG Esteem 4G, LG Motion 4G, LG Spirit 4G (T-Mobile).

US8055820 is related to methods and systems for communicating buffer status reports to support uplink scheduling operations between user equipments and a mobile base station:

1. A method, comprising:

monitoring a usage of a plurality of buffers;

detecting one of a plurality of pre-selected conditions corresponding to the plurality of buffers;

designating one of a plurality of buffer status reporting formats comprising a long buffer status reporting format and a short buffer status reporting format depending on the pre-selected condition detected; and

communicating a buffer status report to a network device in accordance with the buffer status reporting format designated, wherein the designating designates the long buffer status reporting format when there is sufficient uplink bandwidth to communicate using the long buffer status reporting format.

Specifically, US8055820 covers plurality of buffer status reporting formats comprises a long buffer status reporting format and a short buffer status reporting format that are described in LTE standard specification TS36.321. The relevant part of the TS36.321 is Sec. 5.4.5 Buffer Status Reporting.

©2013 TechIPm, LLC All Rights Reserved

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Innovative Sonic: A Patent Privateer?

Recent research for 4G LTE standard essential patents (SEPs) reviles one interesting point: Among the top patentees for SEPs such as Samsung, LG, Qualcomm, Motorola, and Nokia, there is a patentee - Innovative Sonic – that was never been noticed before. Innovative Sonic holds total of 44 LTE related patents of which 8 patents are identified to be potential candidate for 4G LTE SEPs (for details, see http://techipm-innovationfrontline.blogspot.com/2013/05/4g-lte-standard-essential-patent.html).

Innovative Sonic is a Mauritius corporation based in Taiwan. Innovative Sonic sued BlackBerry for patent infringement base on two patents transferred from ASUSTeK Computer: US6925183(http://assignments.uspto.gov/assignments/q?db=pat&qt=pat&reel=&frame=&pat=6925183&pub=&asnr=&asnri=&asne=&asnei=&asns=)

RE40077(http://assignments.uspto.gov/assignments/q?db=pat&qt=pat&reel=&frame=&pat=RE40077&pub=&asnr=&asnri=&asne=&asnei=&asns=)

Furthermore, during the discovery for the litigation, it was found that engineers of ASUSTeK supported pre-litigation infringement testing of BlackBerry’s products (Innovative Sonic v. Research In Motion, Case 3:11-cv-00706-K Document 339 Filed 03/01/13). Additionally, many patents of Innovative Sonic are owned by ASUSTeK previously. These facts may show that Innovative Sonic is a patent privateer for ASUSTeK.

Patent privateering is a type of trolling practice that patent holders assign a patent assertion entity (PAE) to engage in exploiting their IPRs (for the origin of privateering, see http://en.wikipedia.org/wiki/Privateer). This kind of outsourcing practice of patent enforcement to PAEs can adversely affect to industries and consumers. First of all, patent privateering can increase patent lawsuits significantly because PAEs do not make products or services, and thus, they don’t need to worry about counter lawsuits. Second, patent privateering can harm consumers directly because PAEs willingly sue consumers instead of manufactures or service provides.

In addition to Innovative Sonic, there are several entities that are suspected to be a patent privateer:

Unwired Planet: Ericsson agreed to assign 2,185 patents (http://www.techinvestornews.com/Mobile/Latest-Mobile-News/ericsson-sells-2185-mobile-tech-patents-to-newly-minted-troll-unwired-plane)

Vringo: Nokia sold 500 patents (http://finance.yahoo.com/news/nokia-sell-500-patents-licensing-193248944.html)

 

For more information, please contact Alex Lee at alexglee@techipm.com . 

©2013 TechIPm, LLC All Rights Reserved 
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Samsung accounted for approximately 36% of InterDigital’s total 2012 licensing revenues

According to InterDigital’s financial report, its total licensing revenues reached $279 M in 2012. The licensees include Samsung, LG, Pantech, Apple, HTC, Acer, BlackBerry, Sony, Sharp, NEC, u-blox AG, Cinterion Wireless, Wistron, and Quanta Computers. Samsung alone accounted approximately 36% of InterDigital’s total licensing revenues in 2012. For over three years S. Korean companies were the top client for InterDigital’s licensing revenues (three years’ total of $412 M) followed by Canadian, Japanese, and Taiwanese companies.

As of December 31, 2012, InterDigital’s patent portfolio consisted of approximately 2,700 U.S. patents including 1,200 pending applications and approximately 16,700 non-U.S. patents including 7,900 pending applications. The patent portfolios cover 2G, 3G and 4G mobile technology, Wireless LANs, and M2M communications technology

©2013 TechIPm, LLC All Rights Reserved

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Characteristics of Patent Trolls' Monetization Assets

According to the recent research, titled ‘The AIA 500 Expanded: Effects of Patent Monetization Entities’, patent trolls filed 56% of the patent lawsuits in 2012. To understand the characteristics of patents exploited by patent trolls in liligations filed in 2011 – 2012, we did further analysis of the subset of the researched patents, which are related to telecommunications.

We studied following characteristics of total of 159 patents: number of litigations, assignments (in the USPTO), families, forward citations, Independent claims, and priority date. We found that patents exploited by patent trolls in litigations are generally characterized by high in numbers of litigations, assignments, families, forward citations, Independent claims and early in priority date: averages are 4, 4, 3, 47, 5, and 1997 for numbers of litigations, assignments, families, forward citations, Independent claims, and priority date respectively.

©2013 TechIPm, LLC All Rights Reserved

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LTE Smartphone Killer NPEs

TechIPm’s research for patents that are directly related to smartphone LTE implementation in the current US market as of January 15, 2013 reveals that there are more than 400 issued patents shared by more than 20 IPRs holders. According to GSA (Global mobile Suppliers Association), there are 83 LTE enabled smartphones as of 2Q 2012.  It is also expected that the number of LTE enabled smartphones will be doubled in two years. These facts imply that there are enough number of smartphone LTE patents for bring patent infringement lawsuits and products which can be involved in the patent disputes any time soon.

TechIPm researched patent portfolios of smartphone LTE IPR holders that do not manufacture LTE Smartphones (potential NPEs) in the current US market. The research reveals that InterDigital, Ericsson, Texas Instruments, and ETRI hold the most threatening smartphone LTE patent portfolios to smartphone manufactures.

InterDigital is the most notorious NPE in mobile handset industry. InterDigital holds more than 20 issued patents including seven LTE standard-essential patent candidates as of January 15, 2013. InterDigital’s LTE patents are developed well strategically to cover key technologies that are essential for LTE smartphone implementation.

As can be seen in recent patent lawsuit against Samsung and more than 2000 patents acquisition by Unwired Planet, Ericsson can be a potent NPE for LTE smartphone manufactures in the US. Ericsson holds more than 30 issued patents including three LTE standard-essential patent candidates as of January 15, 2013. Most of Ericsson’s LTE patents are characterized by high forward citations. Ericsson actually used two LTE standard essential patents in recent ITC litigation against Samsung.

Even if Texas Instruments manufactures some chipsets related to LTE smartphones, Texas Instruments can be a potential NPE for LTE smartphone manufactures considering its aggressive patent exploiting strategy. Texas Instruments holds nearly 20 issued patents including four LTE standard-essential patent candidates as of January 15, 2013.

ETRI is a well-known non-profit research institute in S. Korea. In year 2010, ETRI sued 22 mobile phone manufactures over 3G mobile patents. ETRI holds nearly 20 issued patents including three LTE standard-essential patent candidates as of January 15, 2013.


©2013 TechIPm, LLC All Rights Reserved
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4G (LTE, WiMAX) Technology & IPR

Alex G. Lee, Ph.D. (Principal, TechIPm, LLC)

Trends & Issues with Strategic Patent Management for Mobile Communication Technologies:

1. Mobile Revolution Began with Patent

2. Patents at the Heart of Mobile Business: Qualcomm’s Profit Center

3. Beginning of 4 th Generation Mobile

4. Complex IPR Landscape 4.1 LTE IPR Landscape 4.2 Mobile WiMAX IPR Landscape

5. IPR Strategy: Strategic Alignment 5.1 IPR-Standardization Alignment Best Practice: LTE Case Study

6. Strategic Management of Patent Portfolio

7. Patent Portfolio Management: Mobile Telecom Case Study

8. Patent Portfolio Management: LTE Case Study (1)

9. Patent Portfolio Management: LTE Case Study (2)

10. Licensing Issues: Pool or Bilateral

11. NPE Issues: Evolution of IP business? 11.1 NPEs in Mobile Telecom 11.2 Pro or Con for the NPEs

Appendix. 4G IPR References

Hyeonwoo Lee, Ph.D. (Next G Mobile Program Director, Ministry of Knowledge Economy)

Roadmap and R&D Support in Mobile Communication:

1. Mobile Comm.Industry

2. Mobile Comm. R&D Roadmap

3. R&D Investment & IPR Status

4. R&D Support Policy

5. R&D Direction in Mobile Comm.

Junwon Lee (IPR Director, Samsung Electronics)

4G & Patent Portfolio:

1. Evolution to 4G

2. Standardization & IPR Portfolio for 4G

3. 4G & Patent Pools

Jari Varrio, Ph.D. (IPR Director, Nokia)

Patent portfolio creates value in many ways:

1.Multipurpose Devices

2. Innovations at Mobile Devices

3. Nokia IPR Assets

4. Innovations through Standards Collaboration

NPEs (Patent Trolls) in Mobile Telecommunications

NPE (non-practicing entity) is a patent owner who does not manufacture or use the patented invention, but rather than abandoning the right to exclude, an NPE seeks to enforce its right through the negotiation of licenses and litigation.

IPRs and litigations involved by NPEs in mobile telecommunications are analized for US issued patents using Innography.

As of Oct. 30 2009, NPEs hold 907 patent families (4% of total patents) and are involved in 129 lawsuits (13% of total patent litigations).


©2009 TechIPm, LLC All Rights Reserved
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