Posts Tagged: "intellectual ventures"

Last week the United States Court of Appeals for the Federal Circuit issued an important decision that might be easy to overlook. In Intellectual Ventures I LLC v. Capital One Financial Corporation, the Federal Circuit dodged the antitrust question presented by finding that a prior ruling had collateral estoppel effect. Still, the arguments raised by Capital One against Intellectual Ventures are part of a disturbing trend. Unwilling licensees who engage in a scheme of efficient infringement to avoid paying for patent licenses are increasingly looking to creative antitrust theories to escape liability for their actions. Efficient infringement is a cold-hearted business calculation whereby businesses decide it will be cheaper to use patented technology without paying than to license it and pay a fair royalty to the patent owner. This calculus is made on the part of large entities who realize there are a certain number of patent owners that are just simply not going to assert their patents for one reason or another, frequently because they don’t have the money to do so. Then there is another group of those that will assert their patents but will not win. The calculation progresses to realize that there is a small group of those who are likely to both assert patents and prevail, thanks to all the hurdles put in place (i.e., patent eligibility challenges, the Patent Trial and Appeal Board, etc.). The calculation further recognizes that even if a patent owner prevails, a permanent injunction is virtually impossible to obtain as the result of the Supreme Court’s decision in eBay v. MerchExchange, and damages are likely to be minimal thanks to a continual judicial erosion in damages available to victorious patent owners. This cold-hearted business approach to using intellectual property without paying has gone on for decades, but with the weakened state of the U.S. patent system since 2006, it has grown progressively worse.

As a buyer, tracking the behaviors of sellers, both in aggregate and individually, allows you to operationalize your buying activities. This is especially true for repeat sellers, who account for 41% of the transactions for patent packages listed in calendar years 2017 and 2018. Knowing who the regular sellers are, often companies with a large portfolio, allows you to contact sellers to create a private deal. Keeping track of a seller’s listings, package sizes, and asking prices can also help you in negotiations because you know their negotiation parameters at the outset. Similarly, if you are a seller, it is important to get out the word that you are selling. Listing packages on your website, through the IAM Market, or working with brokers attracts buyers to you rather than you having to spend the time and effort to find them. For the analysis of current sellers and buyers we looked at all of the packages that sold between January 1, 2017 and May 31, 2018 (assignments were last checked on August 15, 2018) regardless of their listing date. Sales continue to be made mostly by operating companies, which is not surprising as they file the majority of patents. Operating companies were the sellers in 67% of transactions. This is remarkably consistent, at 66% in the previous two papers.

Rather than frustrate innovation, Maurer and Haber found that patent assertion entities have research and development expenditures which, on average, are twice that of U.S. high tech firms… Public PAEs do not appear to operate in a manner consistent with the hypothesis on patent trolls, which includes the view that PAEs own patents which have no value and that they file frivolous lawsuits that amounts to a tax on innovation.

In claim construction analyses, the plain and ordinary meaning of a claim term will not be narrowed by statements in the prosecution history, unless those statements clearly and explicitly evidence the patentee’s intent to depart from the full scope of the claim. If a dependent claim includes the purportedly disclaimed subject matter and was added at the time of the purportedly disavowing statements, a finding of disavowal is unlikely. Furthermore, a means-plus-function term should clearly and objectively define the function of the limitation; if the function is a subjective term of degree, a finding that the term is indefinite is likely.

On Tuesday, September 4th, the Court of Appeals for the Federal Circuit issued a precedential decision in Intellectual Ventures I LLC v. T-Mobile USA, Inc., et. al., vacating and remanding a grant of summary judgment entered by the district court finding the defendants in the case didn’t infringe a patent asserted by Intellectual Ventures. The Federal Circuit panel of Chief Judge Sharon Prost and Circuit Judges Kimberly Moore and Jimmie Reyna found that the district court had erred in its claim construction leading up to the grant of summary judgment in the case.

In its decision, the Federal Circuit noted that the PTAB is entitled to strike arguments improperly raised in a reply brief under 37 CFR § 42.23(b). However, the appellate court disagreed that Ericsson raised a new theory in its reply brief and thus the Board erred in not considering those portions of the reply brief. “The Board’s error was parsing Ericsson’s arguments on reply with too fine of a filter,” the Federal Circuit found. Ericsson’s petition for IPR described how a person with ordinary skill in the art would be familiar with the concept of interleaving. The CAFC further found that the PTAB’s error was exacerbated by the fact that the new claim constructions proposed by Intellectual Ventures after institution gave rise to the significance of interleaving in the proceeding. In light of this, the Federal Circuit found that Ericsson deserved an opportunity to respond to the new construction.

“One thing that I find curious is that Cloudflare claims to have 150 patent assets on the same type of technology,” Verlander said. Such assets include U.S. Patent No. 9342620, titled Loading of Web Resources, and U.S. Patent No. 9369437, entitled Internet-Based Proxy Method to Modify Internet Responses. “It seems to me that Cloudflare should be quite concerned. If the technology covered by the ‘335 patent isn’t patent-eligible, all of Cloudflare’s patent assets may be worthless and I imagine that their investors must be worried about that. They may have won the battle but they could lose the war because if they’re correct, competitors could jump right into the market and copy Cloudflare’s technology.”

The U.S. Court of Appeals for the Federal Circuit issued a non-precedential decision in Intellectual Ventures II, LLC v. Ericsson, Inc. (2016-1739, 2016-1740, 2016-1741) directed to three related IPRs, denying that the patentee was denied due process when the Patent Trial and Appeal Board (the “Board”) employed a “surprise” claim construction in its opinion that had not been explicitly argued by either side to find the claims obvious. Because the Federal Circuit decided that the patentee had both notice and an opportunity to respond, it held that no due process violation occurred.

When a product or process worth stealing is created the party that is considered the innovator is the thief and the party that is considered to be standing in the way of innovation is the party that actually invented the thing int he first place. What an entirely screwed up way of viewing the world of innovation!… Obviously, this article was intended to just mention as many patent related buzz words to capture search engine traffic. How else could you pivot from from a discussion of Kyle Bass to a discussion of TC Heartland v. Kraft? … Of course, that doesn’t stop Forbes from saying that patent trolls will be in trouble if the Supreme Court decides “defendants can pull cases from the plaintiff-friendly Eastern Texas district.” But TC Heartland has absolutely nothing to do with the Eastern District of Texas, or Texas, or the South for that matter. And it has absolutely nothing to do with patent trolls either! Of course, you’d never know that from reading Forbes. In fact, you’d think the exact opposite.

A well-known patent monetization firm jumps back into the brokered patent market in 2016’s fourth quarter. A federal judge in New York allows arguments over whether American movie star Marilyn Monroe has become too generic for any trademark rights to continue. Sony files a patent infringement lawsuit over set-top boxes. Forever 21 files a declaratory judgment action calling Adidas a trademark bully. Cher wins a copyright dismissal over claims her 2013 album cover was infringing. The Supreme Court gears up to hear oral arguments in a case that examines the limits of the patent exhaustion doctrine. Plus a very busy week on Capitol Hill.

Although the patent space surrounding VR headsets still looks very open, it’s interesting to note that Nintendo has an early lead over other top tech firms which have reportedly been working on their own virtual reality technologies. Fourth place in the VR headset space is Microsoft Corporation (NASDAQ:MSFT) which owns nine IP assets in the sector. This total seems low given Microsoft’s work on developing its HoloLens mixed reality platform. Trailing closely behind in fifth place is Alphabet Inc. (NASDAQ:GOOGL) with seven IP assets in the sector. Again, given research and development conducted by Alphabet’s Google subsidiary for its Google Glass head-mounted device, it’s interesting to see that the company hasn’t invested heavily in the virtual reality headset space. Following further behind in seventh place is Japanese electronics conglomerate Sony Corp. (NYSE:SNE). Tied in eleventh place are Intel Corp. (NASDAQ:INTC) of Santa Clara, CA, and the Walt Disney Company (NYSE:DIS) of Burbank, CA.

Although the tech industry is big in America, the industry itself was not big on the idea of a Trump presidency. Trump, however, did have one very vocal supporter from the tech community: German-American entrepreneur, billionaire venture capitalist and PayPal co-founder Peter Thiel… There are inklings that the patent troll narrative might actually have sway with Thiel, despite his Silicon Valley outsider status. An article published in September 2014 by Bloomberg pertaining to a corporate restructuring of Intellectual Ventures (IV), a Patent Assertion Entity (PAE) often portrayed in the media as a patent troll, provides some clues. Thiel is quoted as saying: “I think IV is basically a parasitic tax on the tech industry.”

Simply stated, the industry and the public deserve better than Judge Mayer. His anti-patent views so cloud his judgment that he twists, exaggerates and misrepresents in order to attempt to impose his radical views into the law. There is no place for a judge like that. It is time for him to leave the Court. If he chooses not to do that it would seem appropriate for the Court to do what they would with an attorney who grossly exaggerates and mischaracterizes cases and rulings.

This post provides a practical approach for companies to handle the licensing of Intellectual Venture’s (IV’s) smaller in-house funds (ISF & IDF) during a negotiation with IV. These two smaller, in-house funds together represent approximately 20% of IV’s total portfolio. In a typical negotiation with IV, all of the patents in the IIFs (described below) are available for license without exclusions. But, the ISF and IDF patents are more restrictively licensed. Additionally, IV may have presented evidence of use (EOU) materials for assets in these funds, or otherwise highlighted, some of these assets during negotiations, further heightening the risks. For the two smaller funds, IV will provide a list of excluded assets. How can you cost-effectively assess these funds and the associated risks from these smaller funds?