Patent Litigation Battles And Victories Getting Bigger

Are patent litigation battles in courts and the rewards for being victorious in these battles getting bigger? The 2009 statistics recently published by CorporateCounsul.com sure seem to indicate this is true. The publication revealed the “top ten victories from 2009’s intellectual property litigation docket” which featured some stunning rewards within these ranks including a patent award verdict in favor of Johnson & Johnson for $1.64 billion which is the highest ever recorded.

A press release on the same subject lists some of the other big victories published by General Counsel and said:

Other notable IP litigation victories that made this year’s list include:

  • A rare permanent injunction against Microsoft won by Canadian software maker i41–plus a damages award of $290 million.
  •  A major win by seven Hollywood movie companies granting a preliminary injunction blocking the sale of RealDVD, a software program that would let users make personal copies of their own DVDs on up to five computers.
  •  Versata Software’s $138.64 million verdict against German software vendor SAP AG for infringing a pair of patents covering software that helps customers manage pricing for products along complex distribution networks.
  •  A California federal district court ruling that allowed Superman co-creator Jerry Siegel’s family to recapture key rights to the superhero, the latest news in the ongoing epic battle between DC Comics and Warner Brothers on one side and the Superman heirs on the other.

It’s clear the litigation battles are getting bigger and the rewards reaped by the victors are also on the rise. For those on the other side of these litigation battles, the damages are just as big and the role of information in these battles is ever-increasing in importance.  Patent dataand access to great patent knowledge management tools and technology has become instrumental on both sides of patent litigation. Those who are looking to protect their patents and keep an eye out for infringements use extensive technology to ensure deeper insights into what is going on within their space and be equipped to take on anyone who infringe on their IP. On the other side, those seeking loopholes or spaces within the existing patents to find lucrative opportunities also need to have reliable research capabilities to avoid any traps or mines in the form of patents.

With litigation being either a battle that must be one or one that must be completely avoided depending on which side of the legal scale one is on, having a strong IP knowledge management infrastructure in place can provide an upper hand. For now, with the way 2010 is shaping up, we are bound to see some equally big legal battles over patents and equally large amounts of settlements switching hands.

Nokia Vs Apple iPhone The Patent Battle Intensifies – Where Is The Reward For Innovation?

In telecom circles everyone is following the patent infringement battle between Nokia and Apple with keen interest on how it pans out. Nokia claims Apple infringed on no less than 10 of it’s patents related to wireless standards with the launch of the iPhone and no royalties or licensing fees have been paid by Apple till date. What started out as a competitive strategy battle has made it’s way to federal court and the battle has intensified having the online users everywhere support their favorite cell phone manufacturers and having their own little war on blogs and web publications. The Silicon Valley Insider ‘s Business Insider published a post titled “Lame Nokia Sues Apple Over iPhone Patent Infringement “ making their view clear in support of their home team Apple but it questions whether their stand would be down played had the tables been turned and Nokia used Apple’s Multi-Touch technologies in their line smart phones clearly taking away Apple’s innovative advantage. Calling a company “lame” for protecting or enforcing its IP may be a little over the top.  After all aren’t patents a strategic advantage rewarding innovation?

The cell phone manufacturing industry has always been one driven by innovation with the companies which have been able to think out of the box and innovate being rewarded with market share. There was a time not too long ago when Motorola was the force to reckon with. Although their market share gradually diminished and they lost out to other handset makers, their intellectual property rights portfolio has long out lived and out-performed their handset sales as companies today still license many core components which were invented and patented by Motorola.  Virtually every handset manufacturer has had to build their new products by licensing some components or technologies from others patents. What is not very clear and yet to come out is whether Apple missed these patents while developing and launching the iPhone or if they were aware that they were open to patent infringement claims and decided to ignore it till something came up.

In any technology intensive industry it’s not impossible to miss patents which should have been brought to attention during the research and development process or during product development and marketing. Patent research and competitive monitoring data is often managed by multiple people across departments using a multitude of databases, systems, software and vendors. IP research and analysis for new product development can get quite unwieldy without a comprehensive patent system and process for managing workflows and tracking patent sets and it isn’t all that difficult to overlook technologies and their underlying patents that could be very important to have noted. Here is an extract from the post carried by the Business Insider which can put things into perspective:

During the last two decades, Nokia has invested approximately EUR 40 billion in research and development and built one of the wireless industry’s strongest and broadest IPR portfolios, with over 10,000 patent families. Nokia is a world leader in the development of GSM technologies and its evolution to UMTS / 3G WCDMA as well as wireless LAN, which is also demonstrated by Nokia’s strong patent position in these technologies.

With 10,000 patent families to track and keep an eye on from one manufacturer such as Nokia and likewise many patent portfolios held by other manufacturers in the same space the possibility of patent infringement liabilities is ever present as are the odds of overlooking important patents which could come back at a future date in the form of lawsuits or claims.

Apple in comparison is relatively new in handset market and has already broken ground with its superb UI innovation capabilities which is evident from their iPhone product. The Multi-touch technology which has been patented is just one of those innovations and as Apple’s portfolio grows over time other handset companies will have to keep tabs on Apple’s patents and may find themselves with horns locked in a similar situation some day. While many will base their opinions on whose phone they like better or who their favorite cell phone manufacturer is, the battle is about innovation and the ability to protect IP. In sum, businesses that innovate should be rewarded for their efforts.

IP Intelligence for Patent Licensing & Enforcement Activity

Most companies hold on to their patents as a defensive means to protect themselves from competition gaining an upper hand from their innovations and development efforts. Their ability to drive maximum revenues for the business comes from their ability to have exclusive access to their innovation and fend off the competition for a stipulated time giving them a clear head start. Then, we have the Patent Licensing & Enforcement Companies (PLECs) who either acquire patent portfolio or partner with the patents holders and then look to license their technology with a completely offensive strategy. They drive revenues from assertive licensing via legal notices or even going to the extents of filing law suits against those who infringe on the patents. Due to the nature and amount of damages being awarded by the courts it may appear that Patent infringement cases can be even more profitable and less cumbersome than manufacturing products and getting them out to market. So it’s little surprise that this is a growing business model. Intellectual Asset Management Magazine online stated in a 2008 article that the IP awards and settlements market in the US is $3.4 billion annually.

Small innovators can see PLECs as a necessity to help them license their patents and take on a large companies who may be potential infringers while traditional R&D houses see these as Non-practicing Entities (NPEs) or in some cases as Patent Trolls i.e., those that buy up patents only to benefit from suing companyies having established products in the market. While there are both arguments for and against these intermediaries, they are very much a part of the innovation industry as licensing as well as return on patent investments become a concern for many. As long as businesses and inventors will need help in these two areas, there will be a market for those who can help provide this support.

Whether you are on the side that is looking to license and protect your patents or the side that needs to steer clear of PLECs, patent trolls and other businesses who may have patent portfolios that overlap yours, your intelligence will primarily come from patent databases in addition to secondary online information such as company and products literature.

In a previous post titled Unlocking value from your IP using Patent Citation Intelligence  we discussed at length ways to discovering licensing options to maximize revenue. Searching for infringing companies is not too different from searching for potential licensees. The process of assertive licensing usually involves demonstration of infringement and so technologies present in your patent sets need to be matched with either the claims of the other party or the infringement must be evident from the products functioning or product literature. Tools to fast search, lookup, rank claims help save a lot of time as part of this process.

Analyzing patents for infringement and being able to navigate around potential infringement suits are two sides of the same coin where information in patent data can come to the rescue. For both parties who need to enforce patents and those that need to safeguard their development activities against potential law suits, you should create a list of those working in the same domain who may have a need for the technology in question or those who may benefit from using the technology. The same set of companies form a watch list which PLECs analyze closely to look out for a infringement.

A 2006 EETimes article speaks about how a small company avoided going bust from patent enforcement:

Patriot Scientific Corp. had spent nearly a decade trying unsuccessfully to establish a new microprocessor architecture when it decided it needed to do some soul-searching. It hit paydirt when that process revealed its real products: patents.

The six-person company netted more than $24 million in 2005 from Advanced Micro Devices, Casio, Fujitsu, Intel and Hewlett-Packard by licensing seven U.S. patents it considers fundamental to CPUs. And it’s just getting started.

“Hundreds of companies have been put on notice as potential infringers,” said David Pohl, CEO of the Carlsbad, Calif., company, which hopes to collect royalties on sales of all microprocessor-based systems–sales that are estimated at $200 billion a year. “Virtually every electronic product that a consumer or business comes into contact with is touched by this portfolio.”

The extract above demonstrates how important it is to be able to identify potential licensors for a patent as well as knowing who potential infringers are- an activity that has been mastered by PLECs. While identifying companies such as AMD, Casio, Fujitsu, Intel and HP may be more obvious, being able to identify and list the hundreds of smaller companies which in this case could benefit directly from the microprocessor architecture requires an even more efficient process. Whether relying on a third party company to which the task of enforcement is delegated or done in-house, the ability to create a solid watch list and keep a close eye on infringement activity relies heavily on having good intelligence at the push of a button. Being able to view graphical representations of relationships by citation data, being able to track the use of a certain technology within various industries and also to compare phrases within the patent text of a group of similar patents to detect similarities help facilitate the process.

As the ecosystem of patents filed grows and the list of competitors or possible infingement liabilities is on the rise , it can become increasing difficult to track all the developments and cover all bases without the support of good analysis tools. Luckily patent data analysis tools have advanced in leaps and bounds giving businesses the tools needed to protect their business interests through protecting their most valuable assets – their IP. Licensing and enforcement activity is todays vanguard for a IP portfolios held by businesses and we can expect to continue seeing developments in this space.

Citations In Patent Data And Why They Need Your Attention

A friend of mine who is an avid blogger shared an interesting story of how he landed himself in a tight situation just last week.  He received an email over the weekend from the owner of a copyrighted image he used on his blog without his permission and was now threatened with being sued and facing a fine for violating the copyright laws mentioned on the owners website. This came as a big surprise since he found the image on popular photo sharing platform Flickr, contacted the owner to seek permission, confirmed the photo was published under the “creative commons license” and made sure he complied with every requirement including giving credit to the owner with a link to the original photo and yet now he finds himself in a soup. It turns out, although he sourced it from Flickr respecting every rule and following the right process, the photo was originally copyrighted on another website and another photographer had claims on the image. Despite all precautions and doing nothing wrong, there was practically no way knowing how many people had claims on that image or coming across their websites and tracing the path of the ownership sources.

Luckily for him, it was a clear case of him being lead to believe the image was free to use just because someone else had published it under that license but our discussion on the fiasco brought about an interesting point. He said to me “I contacted the person I thought was the owner and did everything right, how was I supposed to know who had claims on the image before he published it and perhaps who owned it even before that guy?”

Now that’s where we can draw a parallel between his situation and the thousands of us who work with intellectual property and patents. Patents, unlike copyrighted images, have citations and there are several situations where innovators and researchers need to take the time to research patent citation history just to make sure they do not infringe on existing patents. Yet, many a time they find themselves in a sticky situation much like that friend of mine where a competitor or (worse) a Non-practicing entity (NPE) / troll sues them for infringement.

Today, having a strong portfolio of patents behind a successful product is good but not enough since there still lies the threat of NPE’s and trolls whom you cannot counter-sue. Companies with a portfolio of patents in a technology area must look at backward citation mining in addition to regular search when conducting infringement/FTO analysis for their own patents in order to identify risks to their portfolios. Going one generation back ‘(G-1)P’ from your portfolio ‘P’ is not enough and you must go at least 2-3 generations back or (G-1)(G-1)(G-1)P and then go forward from there. A comprehensive backward citation research would perhaps include {(G-1)P,  (G-1)((G-1)P),  (G-1)((G-1)((G-1)P)),  (G+1)((G-1)P),  (G+1)((G-1)((G-1)((G-1)P)))}. The same technique also applies to Invalidation Research and can help locate critical invalidating prior art for a blocking patent owned by a competitor or someone else.

In citation research, patent volumes tends to quickly become unmanageable if you are working with a larger group of patents and looking through all the data for specific relationships. Citation analysis is one such area where these relationships need to be seen clearly so that nothing is overlooked and the researcher has a very clear picture of everyone who has patents and claims on anything that they are working closely with. Patent data analysis software such as Patent iNSIGHT Pro comes with citation analysis components which can create citation trees and clearly display those links in a graphical format which is easy to interpret. Using both forward and reverse citation graphs one can see clear relationships across a group of patents and the chances of missing important citations is greatly reduced. Multi-generation citation sets can be created from a starting point which itself can be a single patent or a whole portfolio. These citation sets can be compared easily via intuitive tables and charts to help both quantitative analysis and a more minute claims analysis.

Apart from infringement or invalidation research, getting an overview of the history of and invention across a time line and following its evolution and usage can provide valuable R&D insights that can help make better product and research strategy decisions while also making clear the pattern of ownership and inventors associated with the work.

Despite the clear differences in copyrights and patents, citation analysis which provides insights that can help minimize unpleasant surprises like my friend had. With the right tools, it is possible to look deeper into the data and see the broader picture with a group of patents. It can help avoid any oversights and potentially expensive mistakes which were not intentional but just happened. While one perhaps can never to enough homework on IP data, it definitely pays to be as careful, calculated and informed as possible.