Tag Archives: AT&T

Top patent defendants have faced far fewer suits in 2016, so far

The size of businesses sued most frequently for patent infringement in 2016 were significantly larger than in 2015, when five little-known patent holders were among the top defendants. The amount of litigation also is much lower this year.

Pharmaceutical company Eli Lilly (341) is the top patent litigation defendant in 2016, with a ten-fold lead over number two Samsung (31). No doubt much of Lilly’s defense is the result of ANDA procedures brought by generic drug manufacturers against branded competitors to establish bio-equivalent drugs.

The rest of the list – Amazon, Actavis, AT&T Mobility I, Huawei Technologies, LG Electronics, AT&T, T Mobile USA and Motorola Mobility – all have 21 or fewer suits filed against them so far this year.

2016

This represents a significant drop over last year, according to data supplied by Patexia.com.

Actavis, which acquired Allergan in 2014, is another diversified pharmaceutical company. Actavis is based in Dublin, Ireland, and is a subsidiary of Teva, an Israeli company. Five of the top ten defendants this year are foreign companies. Absent from the 2016 list is Apple and Google, which owns Motorola Mobility.

More Suits Filed Against Unknowns

For the entire 2015, Lilly had 977 patent suits filed against it. That is in contrast with the 341 filed so far this year. Samsung was again number two last year, with 49 cases filed against it.

The rest of the top-ten defendants for 2015 had some less-known names, including: Spin Screed, Sandi Scales, Conlin Properties, Amneal Pharmaceuticals and Lupin Pharmaceuticals. Rounding out last year’s list was H-P, Actavis and Amazon. Only three companies, Samsung, H-P and Amazon, appear to be IT pure-plays.

The number of suits filed against Lilly last year was almost three times higher than 2016 to date, and those for companies in the two through ten spots were about two times higher.

2015

Response to Increased Risk?

The increase in litigation filings against more established patent holders may have to do with the greater likelihood of favorable settlement or payout of damages from them as opposed to smaller players.

It may also have to do with the changing economics of patent litigation which must anticipate the likelihood, time and costs associated with inter partes reviews.

For access to the top-ten patent litigation defendants and the number of suits filed against them from 2007-20016,  go here.

Image source: patexia.com

An AT&T-Time Warner deal may affect the value of more than premium content & copyrights

The $85.4 billion buyout of Time Warner Corporation (TWC) by AT&T, if it goes through, is a good omen for the value of content providers, like HBO and CNN.

It is unclear, however, how the ambitious acquisition will affect less well-branded copyright holders like independent film productions, TV studios and recording artists dependent on digital distribution.

If content is now truly king, the tide may rise broadly, and rather rapidly.

If nothing else, the proposed acquisition conveys a heightened respect for content – and willingness to pay premium for it – that Google, its YouTube subsidiary and others have heretofore been reluctant to acknowledge.

“The deal is probably neutral for copyrights, but it has the potential to be positive,” one purveyor of music and the content told me from Los Angeles. “The combined entities will still be about half the size of Google, and will be saddled with $120 billion in debt. With those numbers, AT&T’s 5.1% dividend may longer be a given.”

Time Warner is the world’s largest diversified media company.

AT&T’s $107.50 per share offer is 35% premium over its market value. You have to wonder what the transaction might do to secondary content brands like indie labels and movie producers. It’s not just about having a great lineup, but about the particular content that Internet provides believe audiences will crave, which is currently in flux.

AT&T is betting that premium content will matter deeply. Other streaming services are not so certain.

The Future of TV & Broadband

If all of this sounds a bit speculative,” reported The New York Times, “that’s because it is. What this deal actually symbolizes is that the future of television is increasingly going to be built on lots of bold, possibly speculative, experiments.”

Recent acquisitions by Verizon included AOL and Yahoo, which some view as content. I tend to believe that content protected under copyright, and premium content (HBO, CNN) will certainly benefit.

time-warner-1-1024x390

This chart represents TWC prior to the sale of  AOL to Verizon.

 

Bad Business or Goog Timing?

Is the AT&T-TWC deal inherently anti-competitive or merely timely recognition of undervalued assets? After the deal will all content delivery continue to be treated fairly on the AT&T network so far as delivery speeds are concerned?

Will Disney, Comcast – which had acquired NBC-Universal – and Fox move swiftly to shore up their own content?  It’s too soon to tell, but there may be more pressure on Google to become more proprietary with regard to content (and maybe patents) than it has in the past.

It also will be interesting to see if there is a ripple effect on streaming content like music with services like iTunes, Pandora and Spotify.

A list of assets owned by TWC can be found here.

Image source: cnn.com; valuewalk.com

A record number of major holders were granted far fewer US patents

Many significant tech companies experienced dramatic declines in US patent grants, fueling speculation about the reasons why. 

While total patent grants were virtually flat, according to USPTO data, down just 53 patents from 326,032 to 325,979, and utility patent grants and applications were up, many top US holders received significantly fewer US patent grants in 2015. Patent reform and uncertainty are the most likely reasons why.

Notable declines in patents received include Microsoft, off 17.2%, Sony, down 23.8% and AT&T, which dropped 31.3% after increasing 14.4% in 2014. The immediate result has been a noticeable drop in US patent grants received in 2015 by information technology companies, both domestic and foreign based. Japanese companies led the foreign declines.

Businesses of foreign origin were issued a record of 52.8% in 2015 US patents. US company patent applications abroad was likely up.

Digesting the Declines

Fifteen of the top 26 US patent recipients (58%) were granted fewer patents by the USPTO in 2015 than in 2014.  Even IBM, a leading patent recipient for more than two decades, was down by 0.5%. (See IPO top 300.)

Bucking the trend with net increases among top ten patent recipients include Qualcomm, Google GE , Intel and Samsung Display. Biggest percent increases among the top 300 were from NXP Semiconductor (147.9%), Amazon Technologies (53.3%) and Ford Global Technologies (49.1%).

These are in contrast to 2014, when top US-based patent recipients were all up (see 2014-2013 chart below).

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Litigation Down, Too

It is too early to be certain about why the issuance declines among major IT holders are occurring, but if it is in keeping with the recently announced 30.7% drop in patent litigation for the first half of 2016 (see IAM story), a pattern may be emerging.

What this means for some major technology companies is that patent quantity is no longer king. The arms race may be abating, somewhat. It also indicates that US patents mean less today to many companies than in the past, and paying to secure and enforce all but the best few may no longer makes sense. (I will try to cross-check this with US company foreign filing in a future IP CloseUp.)

Decreases in IT company patent filings can be interpreted in several ways.

The Intellectual Property Owners Association (ipo.org) list of top 300 US patent recipients for 2015, published recently, illustrates a downward trend, with some exceptions noted above. It is difficult to tell whether NXP, Amazon and Ford are playing catch up or see an opportunity that others do not. Also, is it that semiconductors, e-commerce and financial transactions, and automotive are inherently more innovative and potentially combative.

“A combination of factors”

Clearly there are many IP rights in portfolios that should never have been issued, and would be invalidated under further review. Also, patents are less reliable than ever, so why bother? It may be that some companies want to rely on fewer, better quality patents, for freedom of action, but it also may be that they see less value in obtaining them or in identifying new inventions.

“It is a combination of factors,” one veteran patent attorney and analyst told IP CloseUp. “Businesses are seeking better patent quality, and chartoftheday_4260_top_10_patent_recipients_n
USPTO examinations are getting somewhat tougher. Also, there is 
pressure on software patents from the courts, frequent PTAB invalidity rulings, and a general anti-patent environment. Weaker corporate balance sheets also have led to cost cutting.”

The America Invents Act and PTAB reviews have made it much more difficult to license patents, and have diminished their defensive value, too. Patents role in some businesses’ corporate strategy and ROI is under scrutiny.

Interestingly, despite the 2015 drop in patents to top holders, corporate patent buying activity was relatively high. Rock bottom prices may have made portfolio purchases attractive to some.

Patent-dubious Google, which has been an active buyer through various programs (e.g. experimental Patent Purchase Program), as well as a more active filer, experienced a 10.9% increase in patents received in 2015. In 2014, it was up by 31.6%.

Image source: patentdocs.com; aulainip.com; statista.com

 

 

 

Panasonic, NEC & Sony are battling with IBM for patent sales leadership

Despite dramatically lower patent valuations, some big companies, including under-performing foreign holders, have taken the number of U.S. sales to new highs.

While IBM still leads, over the past three and a half years, it has been joined by IP-conservative firms from Japan, notably Panasonic/Matsushita, NEC and Sony. All four of these companies have something in common: poor recent financial performance.

In the January IAM Magazine, the Intangible Investor looks at the latest trends in patent sales among the biggest sellers. Activity is up and emerging are new leaders, like Panasonic, which leads even IBM in U.S. sales for the first half of 2015.

Analysis conducted by Brody Berman Associates in conjunction with Envision IP, a law firm that specializes in patent research, reveals that “for the three-and-a-half year period from 2012 to early August 2015, the leading seller by far was IBM, with 5,356 patents. Buyers include Google, Facebook, Alibaba and Twitter. In 2014 alone, IBM sold 2,187 patents, the most in any year over the period by any of the 12 leading tech companies analyzed.

Leading Patent Sellers

“Surprisingly, the number two, three and four patent sellers in the 2012-2015 period were all Japanese companies,” writes this reporter. “Panasonic/Matsushita, NEC and Sony, with 4,203, 2,131 and 1,578 respectively. This is a dramatic shift for conservative Japanese electronics giants, which rarely litigate patents to generate revenue or enable others to.”

Subscribers can link to IAM’s January issue here.

Intellectual Venture’s 70,000 patent portfolio appears to contain no patents originally owned by Apple, Google or Qualcomm, as Envision’s findings indicate. Several patents owned by IV investors appear in its portfolio, including those of Nokia, Verizon, Microsoft and Sony. Only 268 of the 19,559 US patents owned by IV were identified as having a litigation history, representing less than 1.5% of the portfolio.

Top 4 Patent Sellers

Among the top companies IV purchased from are Kodak (1,057), American Express (643), AT&T (358) and Philips (313) and Ericsson (273).

A list of IV’s 35 top sources for acquisitions can be found here.

Image source: Envision IP, LLC

Mobile & Other Patents will Play a Role in Pantech Bankruptcy Sale

Expect a transaction to yield some clues about which smart phone-related patents are interesting, what they are worth and to whom.

Struggling South Korean handset maker, Pantech, announced this week that it is up for sale. Pantech’s financial troubles could be other technology companies’ gains, especially if they are interested in cracking the lucrative Korean smart phone market.

A Pantech sale for all or parts of the company also will test the volatile market for US cell phone patents many businesses and NPEs still covet.

After filing the equivalent to Chapter 11 bankruptcy  earlier this year patent-rich Pantech, which sells in the US through AT&T, Verizon and others, announced recently that it was for sale.

Envision IP published a report yesterday that provides a snapshot of Pantech’s patent portfolio. While the size of the portfolio is only a fraction of Samsung’s (60,000 total US patents) and LG’s (30,000), the patents it contains, a number covering signal transmission, appear to be similarly valid based on citation analysis.

Pantech currently owns 291 US patents, with 269 utility patents and 22 design patents. Pantech also owns 2,654 foreign patents, with the 2,239 of these being Korean patents, and 211 European patents.

“In terms of reverse and forward citations, the portfolios of all three companies are relatively comparable,” said Maulin Shah of Envision IP. “The citation analysis indicates that Pantech’s patents, on average, are technically as strong as Samsung’s patents from a validity standpoint, based strictly on the reverse citation count.  With regards to how

EnvisionIP-Pantech-US-Patent-Portfolio-e1412174293852

innovative Pantech’s patents are to the mobile device sector, the patents appear slightly less fundamental than both LG and Samsung’s patents, based strictly on the forward citation count.”

Korean network carrier SK Telecom has been considered the front-runner for the bid. Other Korean conglomerates such as Samsung, LG and Hyundai Motor Group have also been mentioned as potential buyers. (In 2013 Samsung acquired a 10% stake in the struggling company.)

No US or European buyers have been named.

“The possibility of a foreign company nabbing Pantech is also very real,” reports CNET. “Earlier in April, an Indian consumer electronics giant, Micromax, had considered buying a sizeable stake in Pantech. Chinese handset makers Huawei, Lenovo and Xiaomi could all benefit from acquiring Pantech, forging entry into the nigh-impenetrable Korean handset market.”

Image source: pantechusa.com; envisionip.com

Can a Publicly Held Patent Buying Service Solve the ‘Troll’ Problem?

An article in Fortune by a former litigator examines a possible market solution for what he calls “the nation’s most pressing legal challenge.”

Taking on the Trolls in the current Fortune is worth reading for what it hints at – a possible market based solution for a growing business problem, patent disputes – as well as what it leaves out, a balanced discussion of what has caused the increase in NPE suits.

The article is written by Roger Parloff, perhaps the best legal journalist in America. Parloff undercuts his profile of Rational Patent Exchange (NASAD: RPXC), a patent buying service which to date has acquired rights on behalf of its clients totaling more than $500m, as a possible NPE solution by drawing upon misleading data and making snide remarks about inventors.

Parloff should know better, and so should reporters at some other major media outlets. He dismisses the majority of patent enforcement as frivolous, and suggests the enforcement numbers are skyrocketing for some high-profile (Fortune 500) targets, like Apple, when in relative terms they may actually be down.

“NPEs have their defenders,” chides Parloff, “… the argument continues, but also society at large, by preserving the incentive systems that our Founding Fathers wrote into the Constitution to ensure that the Thomas Edisons of the world would be motivated to provide the rest of us with the maximum possible benefit from their genius.”

Top NPE Targets

According to statistics attributed to RPX in The Ten Biggest Troll Targets, an excerpt from the Fortune article, which “have been relied upon by academics and government agencies,” NPEs filed 3,608 new suits in 2013, up 19% from the 3,042 they filed in 2012. Their suits named 4,843 total defendants, up 13% from the 4,282 sued a year earlier. NPE suits accounted for 67% of all new patent cases filed last year, and 63% of all new patent defendants. 

“Still, the sheer numbers have made many people skeptical,” continues the award-winning reporter and former criminal litigator. “Is AT&T really stealing breakthrough ideas from various Edisons at a rate of more than once per week? Or might someone be gaming a flawed system, bringing dubious claim in favorable plaintiff’s venues and harvesting nuisance settlements?”

Words like “stealing” and “trolls” are inadequate when it comes to patents. They do not help to capture the complexity of the problem, nor do they serve to address the fundamental issue of disputed innovation. It’s difficult to accuse a party of stealing when patents are so unreliable and their coverage difficult to define. At the same time, those who have the capital and experience to monetize legitimate rights should be allowed to.

Bad Actors on Both Sides

Bad actors exist on both sides of patent disputes. There are 140226110436-rpk17-troll-illo-620xasome plaintiffs who rely on the high cost of litigation to settle quickly and there are tens of thousands of  businesses selling products that infringe others’ inventions. From the defendants that I talk off the record it seems most of the patents being enforced are legitimate. Demonizing all enforcers or all NPEs may  help some companies in the short run, but it is only a small part of the story that will have a negative impact on innovation and commerce.

In fairness, most companies want to do the right thing when they can, but the uncertainty implicit in patents (only a portion of those issued are eventually found valid put to the test) and the courts makes doing so difficult. Businesses are frequently blindsided by patents they never knew existed.

One question rarely asked aloud is how thoroughly have they searched for patents that might read on their products?

When these businesses are confronted with quality patents that the products they sell may be infringing, which they can not cross-license and must pay to practice, they are in state of pseudo-shock.  A leveler playing field for innovation rights is a geography that more innovative businesses are reluctantly becoming familiar with. This is a truth that the Fortune reveals. RPX, however, is only one answer. [Taking on the Trolls is available in its entirety in Fortune in print or to digital subscribers.]

More Inventions, More Disputes

There are more NPE suits for several reasons, including (1) there amount of innovation is much greater, (2) invention returns are higher than in the past, (3) more inventions can now be produced by an individual as opposed to big research lab, (4) NPEs are better at bringing suits than top-heavy, risk-adverse large public businesses or individual inventors, and (5) the America Invents Act (AIA) makes it necessary to separate what litigation-costs-prepared-by-rpx-for-pandodailywould have been several defendants in a single suit into separate suits.

How did patent litigation get so expensive? Don’t ask the law firms, ask the defendants. Time (and cash) is on their side.

When the market for trading potentially dangerous patents brings down the risk factors, you may see more companies proactively taking an early license or using buying groups, like RPX, AST or Unified Patents to acquire patents or bust them early, as opposed to rolling the dice and possibly getting embroiled in a suit or numerous suits.

Given the explosive pace of innovation — the USPTO granted 277,835 patents in 2013 alone —  it’s a wonder that invention disputes have led to only a few dozen suits and a handful of trials annually. It’s inevitable that the numbers rise, unless a system of adjudicating disputes can be improved. A single large tech business’ products can draw upon 20,000 or more inventions, some of them fundamental to a successful product. Techdirt reports that some 250,000 patents impact a smartphone.

RPX has a point in saying that law firms are benefiting the most for invention disputes. (The article cites some data to support that.) But despite their whining most large holders can afford to allow things to play out over time. The potential danger of weaker patents and more arduous and costly monetization options is that established businesses will be allowed to determine what innovation is and what is not. Highly disruptive inventions, those that can create new industries, will have a harder time getting through, especially if they are seen as potentially threatening.

Market Solution

Permitting successful technology companies set the patent agenda will inevitably tip the advantage in their favor. With foreign competition just beginning to heat up, it may not be the best time for this to happen. More competitive, market-based solutions for patent disputes, and fewer legal ones, are a natural evolution for a society built on providing more and better ideas, and a healthy way to maintain our inventive DNA. RPX is one among many who can help to provide a step in that direction.

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Image source: money.cnn.com; rpxcorp.com 


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