Tag Archives: Apple

Center for IP Understanding is started by leading IP execs to raise awareness, improve attitudes

The Center for Intellectual Property Understanding (CIPU), an independent, unaffiliated non-profit dedicated to increasing IP awareness and improving negative attitudes towards patents, copyrights and other rights, was launched in New York last week. 

As reported in IAM, Law 360, World IP Review and other publications, the non-profit Center for IP Understanding was founded to address the uncertainty among audiences regarding patents, trademarks, copyrights and trade secrets — especially who do they benefit and their impact on new ideas and jobs.

“[The Centre’s] creation is in many ways a response to the battering that IP’s public image has taken over the last several years,” reported IAM blog, “particularly in the US. In that time a series of Supreme Court cipulogodecisions are widely seen to have undermined patent rights; the idea of efficient infringement has taken root; and the ‘patent troll’ narrative has gained wider traction in many parts the media.”

Outreach

Executives and advisors involved in CIPU on the board of directors or as informal advisors include Marshall Phelps (Microsoft, IBM, retired), Brian Hinman (Philips, active), Keith Bergelt (Open Invention Network, CEO), Harry Gwinnell (Cargill, Eastman Chemical, retired), and trade secret expert James Pooley (Orrick).

Also helpful in getting CIPU underway were Judge Paul Michel (Court of Appeals for the Federal Circuit, retire), David Kappos (Commissioner of the USPTO, retired) and film producer and author Irv Rappaport, former chief patent counsel at Apple and Medtronic, who has generated more than 20 patents, and Jonathan Taplin, a film producer, author and Director Emeritus of the Annenberg Innovation Lab a the University of Southern California’s Annenberg School for Communication and Journalism.

Among the CIPU’s goals for 2017 are a survey of IP awareness and attitudes among the general public and business owners; a research report on trends in media coverage of patent disputes; and a possible joint conference with Duke University on Innovation Policy.

The Center for IP Understanding also plans to provide outreach to educators, parents and business that help to facilitate better IP behavior.

Cultural Shift

“We have entered the ‘free-information’ era, where online content and patented inventions are readily pocketed by those who would never dream of shoplifting,” said Bruce Berman, CIPU Chairman, and CEO of Brody Berman Associates. “Products like music, books, novel designs, inventions and counterfeit goods appear to be there for the taking – or feel as if they should be. Uncertainty about what IP rights cover and their appropriate use compound the problem. CIPU will address these and other issues.”

“IP confusion is costly for consumers and businesses alike,” said Vice-Chairman Marshall Phelps, who is a member of the IP Hall of Fame. “Free-riders – unauthorized users of IP-protected products and works – come in many shapes and sizes. They impact performance and investment, as well as job creation. IP awareness and acceptable behaviors are too important to be left to audiences to decide on their own.”

For the IAM story go here.

For the Law 360 article go here.

For the full launch announcement go here.

For more information about the Center for IP Understanding, please visit www.UnderstandingIP.org. 

Image source: The Center for IP Understanding

Experts: Void from U.S. patent “train wreck” is being filled by China’s patent system

In a few short years China’s patent system has gone from an IP rights wannabe to one of the most responsive and patent-friendly systems in the world.

Leading U.S. IP experts say that underlying this rapid evolution is a desire for China to become a science and technology powerhouse, with the ability to create new and formidable industries that employ many of its 1.4 billion people.

“China wants to be an innovation leader for multiple reasons,” Irv Rappaport, former Chief Patent Counsel at Apple and National Semiconductor, who served on the Uruguay Round of GATT, told IP CloseUp recently. “It is fascinating to see how the U.S. patent system is imploding, while the Chinese system is exploding with activity and purpose.

“For more than a decade the U.S. has been emasculating its patent system, while the Chinese have been studying it and adopting the benefits of a well-coordinated and fast-moving one. The U.S. has gone from being on the global cutting edge in IP in the 1990s, to becoming a patent backwater, because of a well-heeled, anti-patent faction among technology companies that want to stifle competition.

“Train Wreck”

“China has watched the U.S. train wreck and is moving fast to fill the void,”continues Rappaport. “It wants to become the world’s ‘Eastern District of TX,’ that is, a fair and fast adjudicator of disputes that respects patent holders’ rights. China will soon be the world’s largest economy with the biggest population and a middle class the size of England, France and Germany combined. Their commitment to innovation can not be ignored.”

oj-am734_cpaten_9u_20160720061809

Peter Holden, CEO of ipCreate and former managing director with London-based Collar Capital and a founding executive with IP Value, has worked extensively with Asian companies and patents. He has traveled to Korea, China and Japan more than 100 times over the past twenty years. “The Chinese have learned from the U.S. and are sincere about making their IP system the best — one that will encourage innovation and help their nation to become the economic leader. It is not merely a thought. It’s an idea that they are dedicated to.

“China’s attitude towards foreign patent enforcement may not always be as generous as it is currently. It knows that it needs to bend over backwards to be fair if it is to be taken seriously on a global scale. To encourage competition there needs to be a level playing field.”

Counterfeits Still Rule

But China’s record on counterfeits is poor, with everything from luxury goods to pharmaceuticals sold domestically and exported globally. According the U.S. International Trade Commission, Chinese theft of U.S. IP in 2009 alone cost almost one million U.S. jobs and caused $48 billion in U.S. economic losses.

“Counterfeit goods are still an issue for China,” says Erick Robinson, a patent attorney in Beijing and author of Defending a patent case in the brave new world of Chinese patent litigation, in the current issue of IAM magazine. “However, sales of fake goods are no longer openly accepted and the government has been on the war path trying to stop them in different ways. Authorities know that in order to be taken seriously about IP rights, they cannot ignore the problem of counterfeit goods.”

For a prior IP CloseUp post summarizing the Robinson article, go here.

“Go-To” Jurisdiction

China is just beginning to build its giant tech companies. They have succeed with Alibaba and Huawei, and acquired Lenovo from IBM, which is now a $45 billion (USD) business. Their big businesses currently have less to lose from strong patents and quick dispute resolution than those in the U.S. and Europe. To create successful businesses and attract investment, incentives need to be provided, and strong patents and a reliable legal system for adjudicating disputes are great for encouraging that.

Perhaps when China has as many big tech players as the U.S. it will start to think more defensively, but for now it is the perfect setting for encouraging new ideas with strong patents and courts that make it easy to obtain injunctions.

“It’s interesting that the Chinese are encouraging large foreign corporations to sue non-Chinese companies in China,” opines Rappaport. “This suggests that they are looking to become the patent litigation go-to jurisdiction.” As their innovation grows and becomes more complex, I believe they will have less interest in exporting cheap knock-
china-is-receiving-the-most-invention-patent-applications-in-the-world-insideiim-rishikeshakrishnan-1024x792

offs.  Their IP path is similar to that followed by many of today’s developed economies, such as Japan and South Korea.  You start off copying others and gradually move to internal innovation.”

Despite China’s success in facilitating stronger patents and more decisive courts, a huge question is just how prominent a role will patents play in new companies in a data-driven information age.

“Given the accelerating pace of technology development and nature of discoveries, which are frequently software driven, it’s not clear whether existing patent systems can remain relevant in the longer term,” says Rappaport. ” This effect may partially explain why patents currently seem to be less relevant in the U.S.  It remains to be seen whether this is a longer term development. It is a development that needs to watched.”

“100% Win Rate”

“Trust the Chinese government to do what is best for the Chinese people,” reminds Beijing-based Robinson. “It’s less about assisting foreign patent holders than establishing a really viable IP system that encourages innovation and growth, and that attracts foreign investment. Forty-percent of the smart phones in India are currently manufactured by Chinese companies. Innovation coupled with enforcement will drive China’s new businesses and help them grow.”

As reported by Robinson in IAM, “foreign plaintiffs notched a 100% win rate [65 – 0] in civil cases heard by the Beijing IP Court last year, according to a judge who has been on its roster since it was established in 2014.”

Wake-Up Call

A decade of weakening has taken its toll on the U.S. patent system and patent holders. It will not be quick to recover unless a concerted effort can be made to take IP rights seriously. Allowing U.S. patent policy to be dictated by those with the greatest financial success and market share may be appealing to shareholders, but it is not necessarily what is needed for the nation to remain competitive in a global economy, and to generate new businesses and jobs.

Hopefully, the wake-up call comes soon for the U.S. and it can retain the title of innovation leader it has held since the 19th Century but is slipping away.

Image source: insideiim.com; chinapatentblog.com; wsj.com

Tech cos use patents to turn up the volume on smarter hearing devices

Aging baby boomers, exposed to a lifetime of loud music, are more demanding than past generations about the quality of what and how they hear.

Don’t expect them to sit by idly watching Mick Jagger mouth the words to Satisfaction.

A group of leading technology companies familiar with consumer lifestyle preferences are helping to reshape the emerging hearables industry. A cross between a tiny wearable and smart prosthetic, it would be unfair to call these devices hearing aids. They are tiny, but powerful, information processors which, 13892-32c56cdb6fd37fccfbd10d1ffb425f54if properly programmed to individual users’ needs, can do far more than merely amplify speech.

Some will be able to offer simultaneous foreign language translations and are fully customizable with a phone app.

360 Million Hearing-Impaired 

Companies vying for leadership in the field include Samsung, Apple, Qualcomm and Google, as well as those already in the business – the so-called ‘big six’, each with decades of practical experience.

For the whole story see “Turning up the volume on hearables,” in the Intangible Investor in IAM magazine’s November issue. Subscribers can find my fully linked report here.

A Google search for hearing-aid–related patents by Apple, Samsung, and Qualcomm showed zero patents 20 years ago but 816 in 2015— slightly more than half of the total patent activities by the Big Six in the same period.

For the “Complete Guide to Hearing Technology in 2016” go here.  For “New Patent Applications: The Sound of Hearables to Come,” go here.

Sound Play

Apple has teamed up with Starkey Hearing Technologies to provide support for the company’s advanced Halo 2 smart device; Daymond John – founder and CEO of fashion brand FUBU, star of reality TV series screen-shot-2016-02-12-at-9-29-50-pm-e1455334928779Shark Tank.”  He told CNN that the technology has changed his life (see video here.)

Google is working on commercializing a high-end in-ear computer, according to press reports based on patent filings. The technology is reportedly part of its secretive new wearable tech initiative, known as Project Aura.

If hearables reach their market potential, vision, memory and other human-assist devices will not be far behind. Forgot what you stated for entertainment on last year’s tax returns? An assistant far smarter than today’s Alexa, Siri or Cortana (Microsoft), and swifter than Google, will be able to find what you need.

Yesterday’s iPod is looking like today’s iHear and tomorrow’s iKnow.

Image source: wearable.com; anewdomain.net

Symantec acquires Blue Coat, a leading IPR filer with a $289M loss

Cybersecurity firm Blue Coat Systems has decided to opt-out of an initial public offering and sell itself to software security leader Symantec for $4.65 billion. 

What has not been widely reported in the press is that Blue Coat, a relatively small cybersecurity company with a loss of $289 million in 2015, is a leading filer of United States Patent and Trademark Office Inter Partes Reviews (IPRs) that are designed to invalidate patents that are being asserted by Non-Practicing Entities (NPEs) and others.

According to patent research firm Patexia, Blue Coat is a top-ten IPR filer for 2016, along with Apple, Samsung, Microsoft and GE. The firm filed ten IPRs, a higher numbers than H-P for the period.

*****

“Blue Coat has been at war with Finjan,” Gaston Kroub of Markman Advisors, LLC told IP CloseUp.  “Like Blue Coat, Symantec has been fighting with Finjan too, so these IPR’s may be of value to Symantec as well.”

Top 10 IPR Petitioners_2

Finjan (FNJN) is among the leading targets for IPRs. It could be that Symantec finds Blue Coat attractive not only for its cybersecurity products, but also for its adversarial position with regard to Finjan and others which could assert their patents against it or Blue Coat.

In a 2015 verdict in Finjan Inc. v Blue Coat Systems, a jury awarded Finjan more than $39.5 million in damages, reports IP Watchdog. The lawsuit alleged that claims from a series of Finjan patents were infringed by several Blue Coat products, including Malware Analysis Appliance (MAA), Content Analysis System (CAS), and WebPulse.

*****

To help finance the transaction, Blue Coat’s existing majority investor, Bain Capital, will invest an additional $750 million in the deal. The private equity firm Silver Lake, which invested $500 million in Symantec in February, will invest an additional $500 million.

Bain had acquired the company for $2.4B in 2015.

According to The New York Times, “The deal will create a big provider of security products, both the traditional antivirus kind that has long been Symantec’s focus and the newer online protection services in which Blue Coat has specialized. Executives see little overlap between the two businesses.”

“With this transaction, we will have the scale, portfolio and resources necessary to usher in a new era of innovation designed to help protect large customers and individual consumers against insider threats and sophisticated cybercriminals,” Dan Schulman, Symantec’s chairman stated.

In its I.P.O. prospectus, Blue Coat said that it lost $289 million on top of the $598 million in sales for the 12-month-period that ended on April 30. That compares to a $271 million loss on top of nearly $569 million in sales for the same period a year before.

Image source: twitter.com/symantec; patexia.com

Automobile industry convergence is the focus of Detroit IP conference

Over the past ten years or so the motor car of the 20th century has been transformed from a mechanical conveyance to a high-speed information technology platform.

Cars today draw upon networks of complex inventions and intellectual property rights that are destined for licensing and disputes.  

IP in the Auto Industry: Challenges and Opportunities in a Converging World will address these and other issues at an event that will take place at the Ford Motor Company Conference Center in Dearborn on May 3.

Speakers include Nick Psyhogeos, President of Microsoft Technology Licensing LLC, Kevin Rivette, co-author of Rembrandts in the Attic, and a former Apple, IBM and Nissan advisor, and William Coughlin, President of Ford Global Technologies.

IP CloseUp readers are being offered an exclusive discount of $150 off the full delegate rate. Register here by April 29 for an opportunity to network with over 100 thought and market-leaders. Use code IPCLOSEUP3 to receive the discounted rate of $745.

On April 12, Ford made public plans to build a state-of-the-art world headquarters campus designed by SmithGroupJJR, the same architecture and engineering firm that designed offices for Google, Microsoft and Tesla.

The redesign comes as automakers compete with Silicon Valley and Seattle to hire engineers, designers and other tech-savvy workers who will design the autonomous and electric cars of tomorrow.

Ford’s corporate-campus overhaul comes as Toyota is preparing a new North American headquarters in Plano, Texas, and as General Motors continues a $1 billion renovation of its Tech Center operation.

websiteimage

“The focus on IP in the auto industry has intensified at all levels,” said Richard Lloyd, conference producer and North American Editor of IAM Magazine. “Issues such as branding, reputation management and counterfeiting are moving up the corporate agenda, while technological convergence means that patent protection and enforcement, licensing and collaboration have become more important than ever.”

IP in the Auto Industry will feature contributions from over 25 industry-leading companies, addressing the following issues:

  • Securing 360-degree protection – featuring representatives from Cooper-Standard AutomotiveHarman International and Tenneco
  • The implications of convergence – FordMicrosoftPanasonicUnited Technologies
  • The impact of new market players – 3LP AdvisorsUnified Patents
  • The development of robust policing programs – Cellport SystemsHarley-DavidsonMotor & Equipment Manufacturers Association
  • Spare parts and the after-market – FordGeneral Motors
  • Managing brand reputation – Dezenhall ResourcesMarx Layne

For the final conference program and the full speakers’ list go here. To register go here.

IP in the Auto Industry is produced by IAM in conjunction with World Trademark Review. 

Image source: autoalliance.org; globebcg.com

Samsung is the leading US patent holder, 24,000 ahead of IBM

Of the top eleven active US patent holders, only four are American companies.

But who gets the best return on their innovation rights is less clear. 

It is no surprise that many foreign companies are significant US patent holders. The leader in active US patents, Samsung, with 63,434, is now more than 24,000 issued invention rights ahead of the American leader, IBM, with 39,436. But US patentees are learning that they do not all need to be top banana to succeed.

What this tells us is that for some companies – especially foreign ones – the quantity of US patents still counts, even if quality appears to be somewhat of a moving target. And besides, big technology companies seldom put their patents to the test. US-Patents

“Depending on the stage of a corporation’s development, intellectual property may be a primary value driver,” according to an article, “The largest US patent portfolios are shrinking,” by Michael Chernoff of MDB Capital in the May IAM magazine.

“This list provides insight as to whether a company’s portfolio has been growing and the impact that those assets appear to be having within their technology verticals.”

Big and Growing

Of the top 100 holders, Alphabet (Google) had one of the highest three-year compound annual (patent) growth rates (CAGR), 16%. They were outdone only by Apple, 19%, Ford, 19% and Taiwan Semiconductor at 22%. Huawei’s CAGR was a 26%, but on a lower base.

Alphabet is #12 and Apple #26 on the top 100 active US patentees list. Microsoft is now four, displacing Panasonic.

Seven entities moved up the ladder and made it onto the US Patent 100 list during the last year: Avago Technologies (36), Kyocera (81), Merck (84), Huawei (86) Caterpillar (97), EMC Corp (98) and Halliburton (100). While most of these new entrants won their place as a result of sustained IP development, some are due to significant acquisitions, as noted in Chernoff’s article. (I understand that Google also, has been an active acquirer.)

Getting vs. Having 

While IBM has received the most patents granted by the USPTO every year for the past twenty years, or so, it does not have the most active US patents. Samsung does, and Canon has inched ahead of IBM.

2015-Patents-Top-Ten-IBM

This is one area where lack of leadership can be strength. IBM allows many patents to lapse once it knows that rivals will not secure them or they are not likely to provide much value. The company also generates many defensive publications that prevent others from securing patents on inventions it may wish to use or build trade secrets (consulting “know-how”) around.

Because IBM is more selective and may have a greater number of quality assets than some of its foreign rivals, the company’s patent portfolio is likely more relevant for out and cross-licensing, and occasional sales, which in past years it has engaged in with the likes of Facebook, Twitter and Google. Fewer active US patents also means lower maintenance costs.

Image source: http://www.diyphotography.net; www.thenextsiliconvalley.com

Survey: Almost half of all 2015 patent suits were filed in E.D. Texas

The Eastern District of Texas (E.D. Tx.) is responsible for almost half of all patent suits filed in 2015, and one judge, Rodney Gilstrap, is handling 80% of the cases, 1,686 of them. 

This is part of the findings of the latest “Patent Litigation Year in Review” just out from IP analytics firm Lex Machina.

The 2,540 cases filed in E.D. Tx. in 2015 represent 43.7% of all cases filed. In 2014, that number was 28%, from which there was a 56% increase.

According to Brian Howard, a legal data scientist with Lex Machina, “at least part of the increase in E.D. Tx. suits is a result of high volume filers, those with ten or more cases, who either are located in Texas or may find E.D. Tx. courts and juries more hospitable.”

Plaintiffs

E.D. Tx. saw a 78.0% increase (1,113) in cases, and N.D. Tx. 84.1% (54), while D. Del. had a 42.4% decrease in cases (401).

Information about top plaintiffs who are mass filers, some of whom give NPEs a bad name, is difficult to obtain. One of them eDekka, LLC, was responsible for the most suits filed in 2015. Edekka was plaintiff on 101 suits in 2015.  In December the E.D. Tx. cited eDekka for attorney’s fees

The Court concluded that “eDekka repeatedly offered insupportable arguments on behalf of an obviously weak patent” and questioned whether eDekka thoroughly evaluated its claims against relevant law before initiating a large number of lawsuits.

Top defendants in 2015 according to Lex Machina included, in addition to Samsung and Apple, four pharmaceutical companies, Mylan, Activis, Amneal and Apotex. This is more than in the past two years, due largely to ANDAs, Abbreviated New Drug Applications for patents on U.S. generic drugs or bio-equivalents for an existing licensed medication. Howard said that these cases are often more about procedure than current or past infringement and are often settled.

Reasonable Royalties Rule

Median damages awards were up significantly in 2015 to $5,443,485 in 29 cases calculated on reasonable royalties, a more than 17-fold increase from 2013 when the median was $311,379. Lost profits awards were down to just $423,079 in five cases. In 2013 they were $5.5 million (see figure 47 on page 28 of the report).

Of the 2,488 IPRs filed since September 16, 2012, the start of the PTAB reviews, to the end of 2015, better than one in three were either denied institution (22%) or settled (13%). In 3%, all claims were affirmed. Of those instituted, all claims were found unpatentable 18% of the time. Only 0.1% of of the instituted petitions were claims amended.

IPRstats

Prior to institution, petitions were either settled or procedurally dismissed 28% of the time.

For a personal copy of the full Lex Machina 2015 litigation report go here.

To register for a live webinar to review the highlights of the report on March 24, go here

Image source: Lex Machina

Technology companies back as top patent defendants in 2016

While it may seem like all of the patent infringement targets are large technology companies in 2015, at least 7 of the top 10 defendants were less well-known or in the pharmaceutical business. 

According to Patexia, a California patent research firm, the top defendants in patent law suits in 2015 were in descending order: Apple, Samsung, Spin Screed, Mylan Pharmaceuticals, Sandi Scales, Conlon Properties, HP, Mylan, Actavis and Amneal Pharmaceuticals. 

Apple was defendant in 51 cases in 2015, while the lowest of the top ten, Amneal, was defendant in 31 suits.

Patexia Graph

Spin Speed is a construction tools company. Sandi Scales is a Georgia company doing business as Sandi Scales Etching Company. An extensive Internet search revealed no background on Conlon Properties.

Mylan Pharmaceutical, Mylan, Actavis and Amneal are all pharma or pharma-related business. Apple, Samsung and HP are primarily consumer electronics companies.

2016

For 2016 to date, however, the top patent defendants is comprised entirely of tech or e-commerce companies, most with a consumer focus: Expedia, Apple, AT&T Mobility, T-Mobile US, Huawei USA, Samsung, HP, T-Mobile USA,  ZTE and Huawei.

For access to the 2015 and 2016 top defendants list go here.

Image source: patexia.com

 

Apple was paid $1B for rights to feature Google search engine

It’s no accident that Google is top dog for search on iPhones and other Apple products. It cost the company $1 billion in 2014 according to possibly leaked documents.  

It’s being reported that as part of a five-year case against Google’s apparent use of Oracle’s Java technology, a court heard that “at one point in time the revenue share [between Apple and Google] was 34 percent,” according to a Bloomberg report.

Apple received $1 billion from its rival in 2014, according to a transcript of court proceedings from Oracle Corp.’s copyright lawsuit against Google. The search engine giant has an agreement with Apple that gives the iPhone maker a percentage of the revenue Google generates through the Apple device, an attorney for Oracle said at a Jan. 14 hearing in federal court.

Apple-Google1Oracle has been fighting Google since 2010 over claims that the search engine company used its Java software without paying for it to develop Android. The showdown has returned to U.S. District Judge William Alsup in San Francisco after a pit stop at the U.S. Supreme Court, where Google lost a bid to derail the case. The damages Oracle now seeks may exceed $1 billion since it expanded its claims to cover newer Android versions.

Apple has something to be embarrassed about, claiming that it is dedicated to protecting customer information and not profiting from it.

TechCrunch reported that “Another factoid thrown up by the case included a claim that Android has generated $31 billion in annual revenue to date, of which $22 billion is profit.”

*****

Reports of the death of IP licensing appear to be exaggerated.

 

Image source: valuewalk.com

Apple acquires 26 finger print scanning patents from failed startup

26 of a tiny company’s 31 finger print scanning patents were recently transferred to Apple. How Apple plans to use the invention rights is not clear.

What is clear is that Apple has been watching Charlottesville, VA based Privaris, a biometric security company, for several years and, a company, reports Business Insider, which still exists but has not updated its website since 2009.

Why did Apple wait so long to make its portfolio move? (It had bought three patents from Privaris in 2012.) Did it have to acquire the patents to keep the portfolio out of the hands of competitors or NPEs?

Perhaps the Apple was biding its time to see who else was interested in the technology, or maybe there is know-how (trade secrets) associated with the inventions that it wants to control?

iPhone Improvement?

It has been reported that Privaris’ patents could potentially make the iPhone’s TouchID sensor more useful. For example, one of Privaris’ patents covers the ability to use a touchscreen and fingerprint reader at the same time. Another invention of Privaris’ could allow you to open a door with your iPhone by scanning your fingerprint and holding your phone up to a reader, similar to how you pay for items with Apple Pay.

“Armed with the ability to create a fingerprint scanner that resides beneath the iPhone’s touchscreen, but can still scan your finger through the phone’s display, Apple could finally be able to design an iPhone with logo_privarisan edge-to-edge screen.”

However, Apple doesn’t always create the technology it patents itself or acquires elsewhere, and has previously filed its own patent for a TouchID fingerprint sensor that sits underneath the touch screen of the iPhone or the iPad.

Patently Apple, a blog of unclear origins which usually waxes poetic about Apple inventions reports that, “According to [a] report, ‘Apple acquired its first three Privaris patents on December 19, 2012, and Apple bought most of the other Privaris patents in October 2014.’ Considering their website hasn’t been updated in four and half years, Apple has likely acquired the patents but not the company as the report suggests. It is not entirely clear what the relationship between Apple and Privaris is now, or will be in the future. The last transaction between the two firms closed in October 2014, and Apple bought its first three Privaris patents at the end of 2012.”

A CNN story takes the patent transfer as a sign of a planned acquisition. But why would Apple want the entire company if it has no apparent value? The company’s website also plusID90still lists Authentec, another biometric identity and security firm that Apple acquired in 2012, as a technology partner, Patently Apple reports.

However, MacRumours says that Privaris essentially shut down about five years ago, so Apple could just be buying the firm’s intellectual property.”The news section of the Pravaris’ site hasn’t been updated since 2009, and none of the company’s employees have changed their LinkedIn profiles to indicate that they now work at Apple.

Yours, Mine, Ours

Another possible reason for the Apple purchase: to keep these patents out of the hands of competitors like Samsung or Microsoft who would love to be able to license them to Apple or its competitors.

Should Privaris find itself insolvent and have to file for Chapter 11 relief, a possible scenario, a creditors committee could gain control of the patents (similar to Nortel or Kodak, but on a smaller scale) and either sell them for a good price to the highest bidder, or find an NPE partner to enforce them.

Either scenario could pose a challenge to the iPhone’s current leadership in biometrics. 

Image source: spie.org; prevaris.com

 

Patent values are hit by uncertainty; operating co buying overtakes NPE

Three things are needed to succeed today in patent licensing: more capital, more patience and more good patents, which are in increasingly short supply. 

Uncertainty is the glue that binds weaker patents to cheaper ones.

Patent reliability is poorer than ever, in part because invalidating bad patents is now somewhat less arduous and costly. The courts are awarding fewer and lower damages awards, and defendants with time on their side and cash in their pockets, can play an even longer waiting game.

Increased uncertainty has encouraged more patent holders, mostly those operating companies that generate their inventions and rights internally, to consider purchases that they may not have previously. At “buyers’ market” prices, who can blame them? It will be interesting to see how uncertainty in the patent system will affect future R&D strategy and domestic patent filings.

With asking prices per asset trending down, and brokered patent sales lower, the percentage of packages sold is actually up significantly, as is opco buying.

The top buyers in 2015 Q1 according to Richardson Oliver Law Group, which tracks brokered patent transactions, were RPX, a Canadian numbered company, and Intellectual Ventures, for their Intellectual Investment Fund 3. These buyers accounted for 42% of all of the packages purchased in 2015 Q1 and RPX alone accounted for 28%. Other, much smaller buyers in Q1 include Apple and Philips.

patpkgssoldUntitled

Listings are Down; Sold Packages Up

ROL indicates that patent deal listings (patent and application packages) are down 20% from 4Q 2014 to 1Q 2015, but that packages sold are up 88%. In an article in IAM earlier this year by ROL (see The brokered patent market 2014,), it was shown that corporate buyers have overtaken NPEs in 2013 and 2014, comprising 46% for the market versus 38% for NPEs.

Asking prices for US-issued patents monitored have fallen from $577,000 in 2012 to $360,000 in 2014, a fall of 37.6%. ROL’s latest broker sales stats can be found here.

*****

“Uncertainty rules,” my latest Intangible Investor, the July IAM Magazine looks at why confusion over new patent hurdles and lower damages awards is creating an opportunity for some companies to buy patents at lower prices and settle disputes more favorably. Subscribers can get it here.

*****

Don’t expect to see patent uncertainty to wane anytime soon.  Many operating companies and at least some NPEs will be sad to see it go.

 

static1.squarespace

Image source: Richardson Oliver Law Group

US Tech Cos are Bulking-up On Software and Methods Patents

More than half of Google and Microsoft’s 2014 US patent grants were in methods-related classes. IBM and Apple also were active filers in these areas.

By Maulin Shah and Bruce Berman

Patent values are down, partially a result of recent court decisions and legislation. But not everyone is writing-off software and method patents, even though they are among the most difficult to defend. In fact, software and methods patents comprise surprisingly high portions of four leading US companies’ 2014 grants.

Better than half of the patents issued to Google and Microsoft by the United States Patent and Trademark Office (USPTO) in 2014 were methods-related patents, and more than one-third to IBM and one-quarter to Apple. This is according to data collected and analyzed by Envision IP, a law firm specializing in patent research.

CLS Bank v. Alice decided in June by the United States Supreme Court made the bar for affirming software patents considerably higher than in the past. Software inventions now have to show that they are not directed to mere abstract ideas or that they are not simply existing solutions that have been expressed with a computer.

The Patent Trial and Appeal Board (PTAB), which was established as a result of the American Invents Act, also made proving validity more challenging, especially for methods patents.  Reviews to date have invalidated nearly 78% of claims in cases instituted by the PTAB, with almost a quarter of all AIA petitions filed in fiscal year 2015 directed towards methods claims.

Despite the new case law and recent legislation some active patent filers continue to pursue and receive patents in significant numbers in USPTO classifications 700-708, 715, 717, 726 and 902, which are associated with software and methods. (Class 705, business methods, also is reflected in the bar graph, above, and pie chart, below.)

The Numbers Tell a Story

Companies intent on obtaining method patents include Google, for the first time in 2014 in the top ten of US patent recipients, in eighth place just behind Toshiba and Qualcomm. Of the 2,599 US patents granted last year to Google, 1,522, or 59% were in the methods classes. Microsoft, with 2,847 patents received, had 1,575, or 55%, that fall under the heading of methods.

2012_2014_Software_Methods_Issuances_EnvisionIPPerennial US patent recipient leader IBM secured 7,540 patents, and received the most methods-related patents with 2,916, 39% of its total grants for last year. Not to be outdone was Apple, with 2,037 patents, 538 or 26%, which are associated with software and methods. Samsung, LG, Qualcomm, Panasonic, Canon and Toshiba, all top-ten US patent recipients for 2014, secured less than 10% in methods.

Methods patents were up slightly for IBM, Microsoft and Apple from 2013 and 2012. However, Google received 69% more methods patents in 2013 than it did in 2012 (1,225 vs. 723) and 24% more in 2014 than the previous year (1,522 vs. 1,225).

Our analysis indicates that many of the foreign multinational technology companies that top the list of US patent recipients are focused on receiving hardware and non-software related patents.

For example, less than one-tenth of the patents issued last year to Samsung Electronics, Canon, Toshiba, Panasonic, and LG Electronics, all top-ten US patent recipients, were in the methods and software-related classes that we analyzed. This is not necessarily surprising, as these Korean and Japanese technology icons have for decades been known for their diversified consumer electronics products, notably televisions, cameras, and media players.

Microsoft, Apple, Google, and Sony tend to sell products that are software or methods-dependent and are connected to smart devices powered by cloud technologies. We would expect these companies to have a higher percentage of recently issued patents in software and methods-related classes.

Filing Strategy

The data also suggest that some large filers may believe that their software and methods-related patents are better than others that have been previously granted and can be defended, if necessary. Another possibility is that recent methods recipients believe there is little likelihood that their patents will ever be tested in court or at the PTAB.

_________________________

Maulin Shah, Esq., is Managing Attorney of Envision IP, a specialty law firm focused on patent research and invalidity studies. He holds dual BSc degrees in Electrical and Biomedical Engineering from Duke University and practiced patent law at Snell & Wilmer LLP before starting Envision IP.

Bruce Berman heads Brody Berman Associates, a strategic communications firm that helps to differentiate IP rights and holders. He is responsible for five books, including From Ideas to Assets and The Intangible Investor.

Image source: envisionip.com
*A previous version of this post ran on IP Watchdog.

 

%d bloggers like this: