SSH Communications Enters Cross-License Agreement with Sony After Losing Patents at PTAB

On Monday, February 5th, Finnish enterprise cybersecurity solutions firm SSH Communications Security announced that it had entered into a patent cross-license and settlement agreement with Japanese electronics conglomerate Sony Corporation (NYSE:SNE). The agreement reportedly resolves all patent disputes between the two companies after Sony successfully challenged the validity of two U.S. patents owned by SSH Communications at the Patent Trial and Appeal Board (PTAB).

SSH Communication’s patent enforcement campaign against Sony began in May 2015 when SSH filed a patent infringement action in a German district court, asserting a European patent covering Internet communications technology for use in mobile devices and certain network equipment. Although SSH did not file any patent infringement actions against Sony or any other entity in U.S. district court, Sony challenged the validity of two U.S. patents held by SSH by filing petitions for inter partes review (IPR) proceedings at the PTAB. Those patents include:

  • U.S. Patent No. 8544079, titled Method and Arrangement for Providing Security Through Network Address Translations Using Tunneling and Compensations. Issued in September 2013, it covered a method of maintaining communication of datagrams by communicating those datagrams to a device via a network address translator device and maintaining mapping for the network address translation by sending a keepalive packet from the device to the network address translator device.
  • U.S. Patent No. 9071578, titled Maintaining Network Address Translations. Issued in June 2015, it claimed a method of maintaining network address translations which is designed to improve the conversion of packets which are transmitted between devices utilizing different protocols, such as IPv4 and IPv6.

Sony filed an IPR petition in September 2015 to challenge the validity of the ‘079 patent on grounds of 35 U.S.C. § 103 for obviousness. The IPR was instituted in April 2016 and in April 2017, the panel of administrative patent judges (APJs) issued a final written decision finding that claims 1 through 32 of the ‘079 patent were invalid under Section 103. SSH’s ‘578 patent was targeted in an IPR petition filed by Sony in June 2016, again challenging validity on Section 103 obviousness grounds, and the PTAB panel on the case instituted the IPR in December 2016. The case was terminated in September 2017 after SSH disclaimed on claims 1 through 15 of the ‘578 patent. Thus, without ever once asserting a patent claim in U.S. district court, SSH Communication lost each of the 47 patent claims of the two challenged patents covering technologies closely related to SSH’s patent infringement case in Europe.

We are pleased to finally end this dispute with Sony” SSH VP of Intellectual Property Erkki Yli-Juuti is quoted as saying in a news release regarding the agreement. “We can now fully concentrate and move forward with our other licensing efforts. SSH is aiming to enter into licensing arrangements with other companies using our patented technology.” SSH forecasts that the license agreement with Sony should have a moderate positive impact on SSH’s net profits in the first quarter of 2018.


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Join the Discussion

4 comments so far.

  • [Avatar for dot dot dot]
    dot dot dot
    February 14, 2018 08:43 am

    @JPM: Your comment mixes apples and oranges.

    It is true that Tatu Ylonen developed the first version of SSH, but these patents have nothing to do with SSH. They arose from later development, and are not widely deployed and are not widely recognized as having significant value. Just because Tatu is recognized as being the inventor of the original SSH protocol doesn’t mean that all subsequent work was equally original.

    (And arguably, even SSH was somewhat derivative; the login functions were inspired by rsh, the terminal functions by telnet, the key exchange by Diffie-Hellmann RSA, and significant parts of the code itself were not original; SSH is open source today because the first version of SSH was built upon open source technologies.)

  • [Avatar for Falcon]
    February 14, 2018 02:46 am

    Patexia, an intellectual property company that performs analytical studies for IP-related issues, named Buchanan as the best performing law firm representing patent owners. Patexia’s report indicated that Buchanan’s Patent Office Litigation Practice Group has a success rate of 80% in defending patents challenged in IPR proceedings. An inter partes review (IPR) is an adversarial proceeding conducted before the Patent Trial and Appeal Board (PTAB) in which a third party petitioner challenges the validity of an issued patent.   In the last five years, IPRs have become a popular choice for contesting the validity of issued patents.   According to the PTAB’s most recent statistics, over 7,300 IPR petitions have been filed since September 2012.  IPRs serve as a faster, more cost-efficient alternative to contesting the validity of issued patents in district courts.

  • [Avatar for Anon]
    February 10, 2018 03:27 pm

    Without digging into the facts of the non-US case, and further presuming that the prior art here would also be considered prior art in any other jurisdiction, I am left scratching my head as to why Sony would agree to ANY cross-license deal with an entity that they just removed “the Crown Jewels” from.

    Is one possible take-away being that US patents are not worth what other foreign patents may be worth? That the property aspect of other foreign patents have clear title that would survive attacks that render US property NOT “clear,” and that Sony wanted a world wide deal and simply “scorch-earthed” SSH’s US market as a warning sign? In the mafia parlance: a offer that SSH could not refuse?

  • [Avatar for JPM]
    February 10, 2018 10:36 am

    It is widely accepted in the open source community that Tatu Ylonen invented SSH (the inventor who is named on both of these patents). SSH is included in the default install of almost all Linux and Unix-like operating systems because it is widely known that SSH is more secure than telnet, another remote access technology.

    I am not surprised that the PTAB would institute an IPR. It seems that the job of the PTAB is to kill all patents that have value and pose a threat to the revenue streams of the large efficient infringer lobby who paid for the AIA law that brought the PTAB to life.

    Tatu Ylonen, the inventor of SSH must be pretty disgusted with the PTAB.
    Let’s hope soon that the PTAB is significantly reformed to benefit inventors, or it is shutdown.