Patent holding firm picks up Sony & Nokia IP, files suit against Apple
Non-practicing entity Ironworks Patents has filed a lawsuit against Apple, hoping to claim up to 12.5 cents per iPhone for U.S. patents originally belonging to Sony and Nokia.
One of the patents, from Sony, covers the ring silencing feature on cellphones, and was filed in 2001 with a 1994 priority date. Two Nokia patents cover silent alarms, including vibrations, and were filed in 2000 and 2004.
The suit is effectively a continuation of a case brought by MobileMedia, which won $3 million in damages last year, later raised to $10.7 million. Apple is appealing that verdict, but earlier this year MobileMedia -- in which Sony and Nokia had minority stakes -- sold its portfolio to the newly-created Ironworks.
The latter firm is looking to collect royalties from more recent iPhones, stretching from the iPhone 4S through to the iPhone X. The MobileMedia suit focused on older hardware, namely the iPhone 3G and 4.
Back in May, Apple and Nokia settled a major patent dispute through terms such as a multi-year licensing agreement and a $2 billion cash payment by Apple.
One of the patents, from Sony, covers the ring silencing feature on cellphones, and was filed in 2001 with a 1994 priority date. Two Nokia patents cover silent alarms, including vibrations, and were filed in 2000 and 2004.
The suit is effectively a continuation of a case brought by MobileMedia, which won $3 million in damages last year, later raised to $10.7 million. Apple is appealing that verdict, but earlier this year MobileMedia -- in which Sony and Nokia had minority stakes -- sold its portfolio to the newly-created Ironworks.
The latter firm is looking to collect royalties from more recent iPhones, stretching from the iPhone 4S through to the iPhone X. The MobileMedia suit focused on older hardware, namely the iPhone 3G and 4.
Back in May, Apple and Nokia settled a major patent dispute through terms such as a multi-year licensing agreement and a $2 billion cash payment by Apple.
Comments
It's literately a patent on avoid hurt feelings. Where were the political correctness gone mad people when this was issued?
The bar for an inventor has never been “you can only sell or license or defend your patent by first becoming a practicing entity.
I have several patents (owned by my former employer) but I’d rather talk about my friend, a classical self-employed inventor, who lives by inventing better devices and then selling or licensing his patents. He would never think to go into manufacturing as this not his dream. He has invented many useful things during his life and were he not able to sell or license them he wouldn’t have been prolific. His patents have value, and like a thing of value, they can be sold.
When end you put “non practicing entity” into the discussion, it is an attempt to render such companies illegitimate. If successful, this removes value from the patent’s originator, or anybody else who may have purchased it from him (because it removes a potential acquirer out of the competition.)
i don’t know who has been been beating the “a patent should not be honored if owned by a non practicing entity” drum but it diminishes the value of all patents, inventors and the system in general. I can only conclude that the fans of this argument either don’t know the law, are aligned with entities trying to avoid patent royalties or defense suits, or are not or have never known an inventor.
The problem is when a company with little personal investment in an invention sits on a patent hoping another company will accidentally create a successful product which may infringe on their acquired patent and then wait to sue in order to maximise damages which can be extorted from the infringing company. That’s what people mean by non-practicing entity when referring to it in the negative. That’s also not in the spirit of why patents were created. It’s an abuse.
Non-practicing patent pricing reform
I've grappled with the dichotomy presented by the need to protect intellectual property versus the drag on invention that the non-practicing entity lawsuits represent.
Perhaps the answer is to limit the royalties that can be demanded from patents that are not being applied (non-practicing) versus those that are applied in some product or service. This would give greater protection and rewards to those who own patents and are using the patented technology in their products, because damage from infringement is higher versus damage to a non-practicing patent holder. If you've gone through the expense of utilizing a patented process or mechanism, then you should be compensated greater when someone infringes that patent and potentially harms your revenues. But if you haven't, and therefore also haven't brought a new product or service to market that allows society to benefit from the invention, then perhaps you shouldn't receive the same compensation for infringement.
There's perhaps a bit of precedent here in the FRAND royalty calculations for patents that are considered standards essential. The whole notion of SEP is that there's a greater good to society to allow multiple parties to utilize an invention as part of a standard and therefore it should be affordable for all to utilize the patented invention. Same here. Patented inventions that are sat upon don't benefit society, so there should be incentive to get those inventions into use.
To give time for a new patent holder to develop products and services around a patented invention, perhaps the first few years after the patent is granted, it can be exempt from the rules I'm suggesting here. The current status quo would remain in effect. But after, say, three years, if you haven't shown that the patent is being developed into a product or service, then licensing limitations go into effect so that the amount you may charge for your invention will be limited, ala FRAND-type pricing guidelines. So, if you don't intend to utilize a patented invention, either accept the lower royalty rates so that others can utilize it, or sell the patent to a company that will utilize it and therefore retain full royalty and infringement power over it.
Besides, any patent granted to AT&T in the 1960's will have expired long before the mobile phone became a reality.
Not to mention some patents may takes year for other technologies to catch up in order to make it happen. Do these investors has the right to collect their royalties?
eg, I develop a theory and a device that can generate electricity from water under $100. But the technology to make it happen won’t realize in 20 years. 15 years later someone use a similar theory but totally different techniques to make it work. Will I able to collect my royalties? Remember a lot similar cases happened to Apple and other big tech companies. So who is in the right?
on a computer" type) straight down the rabbit hole. (See https://www.eff.org/alice). Alas, the rubber-stamp USPTO stuff pre-Alice are returning like zombies.
It's not quite that simple. A patent is property (IP) and those property rights are protected in the US. A company that acquires patents may be a non-practicing entity, but that doesn't mean they should not attempt to gain the maximum value of those patents. Let the courts sort it out.
Society benefits the moment the patent is published, even if it is not immediately, or ultimately, utilized because a published patent gets an idea of of a single head into many more heads. From the moment of publication, all other parties have a chance to invent an even better mousetrap that either utilizes the patent, or works around the patent; whichever path is chosen, the insights and potential inspiration for further advancement is free. This allows society, or "those skilled in the art", to immediately build upon that idea. This is a tangible benefit.
The FRAND concept was to essentially award a working monopoly to a certain given technology owned by a given entity. When new tech starts to emerge, there are sometimes multiple entities offering essentially competing tech, as well as multiple parties wanting to implement that tech. A FRAND choice by a standards body (which in part represents potential users) basically allows users to bundle their buy down to the tech of single tech owner who is willing to conform to the FRAND idea in order to become the preferred solution supplier (the supplier commits to play nice with potential users, in order to secure a preferred market position, once the standard is accepted.)
By cherry-picking the idea of patents apart, this reduces the incentive for inventors, be they like my friend, or a company, to invest time and money into multiple different solutions, which are then not delivered into society's consciousness via the patent mechanism (only a subset of these ideas are developed, or some are held as trade secrets and not published at all.)
As to your last paragraph, this is like saying to a farmer, don't let your field lie fallow else it will be seized or taxed at a higher rate. Why should an IP owner, regardless of type, be so coerced to use, license, or sell his IP? If we already established that society has already benefitted from the patent bargain at the time of publication (the embodiment of a particular implementation is available to act as a point of departure for the next creative step for everybody, some may license it, or buy it, or work around it.) Once one starts cherry-picking the exclusive rewards of the patent bargain between society and any inventor, all patents are devalued and they lose value.
I didn't finish this reply as quickly as I wanted to, and saw some later replies, essentially trying to draw a distinction between owners ... again, if you start cherry-picking one owner against another, IP loses value.
I still thing the patent-troll /NPE meme is something cooked-up by big business to try and whittle away at IP owner's defense of their IP. Because if big business can limit the rights of IP defense for all but the independent inventor, then it is pretty much green lights all the way down Infringement Boulevard, because the small inventor is almost guaranteed not to have the resources to fund a competent defense of their IP.
I think Apple had been sued for that.