From Mitsubishi to Apple, to an NPE and finally RPX, one IP asset, several objectives.
It’s a hard-knock life for some patents, so says an insightful article appearing in the current IEEE Spectrum that provides a behind-the-scenes look at the road traveled by a single smart phone patent as it was sold and resold, mostly to well-known holders. Spectrum is the magazine of Institute of Electrical and Electronics Engineers, the largest professional organization for the advancement of technology.
“The Troubled Life of Patent No. 6,456,841,” by veteran technology reporter Tam Harbert, traces the path of an invention by a Mitsubishi Electric Corp. engineer, covering the alert sent to a cellphone user of incoming messages by displaying an icon on the screen. The U.S. patent was issued in September 2002, and for nine years, writes Harbert, led a very quiet life. In 2011, with the smartphone wars heating up, the patent became more interesting, and so did its ownership history.
In March 2011 Mitsubishi transfers the patent and 11 others to Apple. In August 2011 Apple turns over all 12 patents to Cliff Island, a company controlled by Digitude Innovations, which had previously acquired hundreds of chip-related patents, some from AMD. Digitude was established around 2008 by Altitude Capital Partners, a successful patent investment and monetization firm. (ACP was at one time a Brody Berman Associates client.)
In December 2011 Digitude sues 9 mobile phone and tablet companies for patent infringement, but not Apple. In May-June Digitude drops its suit and ITC complaint and sells the ‘841 patent and some 500 others to RPX (NASDAQ: RPXC), a defensive patent aggregator for $46 million. RPX is in the business of deflecting patent litigation for its clients, mostly large technology companies.
It would not be right for me to give away the entire story, which is summarized with good humor in a slide show which you must watch.
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Why did the ‘841 patent take this seemingly strange path?
Harbert is an excellent reporter with keen instincts and an open mind — exceedingly rare in media coverage of intellectual property. I’ve served as a resource to her on stories in the past, and she asked if I could provide some perspective for this one, which you can read here.
Is it possible that the ‘841 patent could be on the move again? You never know who may have the greatest demand for a given IP asset at a particular time, and how best to maximize it.
From my perspective, Apple knew it had purchased something worthwhile. However, to deploy the asset most effectively it needed to transfer it to another, more flexible entity. Enter Cliff Island with its AMD chip patents and a greater ability to sue infringers and sell to them. For Apple it was likely less about the cash return the patent provided than the strategic advantage. The sale to RPX may have bought the consumer electronics giant some temporary patent peace that could not have otherwise been achieved.
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Expect to see more collaboration between one or more operating companies and NPEs in the future as patent monetization models continue to evolve and more businesses seek new ways of protecting their market share and generating revenue on their IP rights.
The unexpected turns taken by the “Icon” patent on its long road have provided uncharacteristic return. I wish that could be said about every patent.
Illustration source: http://spectrum.ieee.org/