Responding to Dean Becker and Equitable IP

UPDATED 5-8-17  Dean Becker appears to no longer work for Equitable IP according to his LinkedIn Profile.

We consider it a success anytime a Patent Assertion Entity (PAE) complains about Unified’s business model.  This sometimes happens after Unified successfully challenges a questionable patent before the PTAB.  Indeed, last week Dean Becker, Chairman of Equitable IP Holdings (Equitable), an entity reportedly started by Erik Stamwell and John T. Meli Jr. (See RPX Corp Q2 PAE Report at 46), sent a mass e-mail (copied below) asking for information concerning Unified’s membership and made allusions to some hidden agenda.  Equitable sent these e-mails only weeks after it shut down its Digital Audio Encoding (DAE) campaign and requested adverse judgment in our IPR.  (See Equitable abandons patent after Unified files IPR).    

It is especially ironic when PAEs, many of whom purposefully obfuscate their business and financial activities, attack others’ transparency.  Unified’s business model has been clear from day one: we seek to deter PAEs and other non-practicing entities from monetizing invalid patents.  Another core Unified principle is that we never pay PAEs.  We independently challenge patents and either win on the merits or settle for zero-dollar licenses, period.  Many of our members have chosen to make their membership public, but some choose to remain confidential.  Confidential, however, does not mean nefarious.  For example, we have consistently provided membership information for real-party-in-interest and settlement purposes.  (See also Unified's Real Party-in-Interest PTAB Panel Decisions).  

Many patent assertions, even some brought by PAEs, involve strong, valid patents.  Unfortunately, many do not.  Statistics drawn from years of litigation (see, e.g. John R. Allison & Mark A. Lemley, Empirical Evidence on the Validity of Litigated Patents) and Patent Office proceedings (see, e.g., USPTO, Inter Partes Reexamination Historical Statistics and USPTO, Statistics) show this to be true, as do numerous anecdotal examples, including Equitable’s own DAE patent.  

Equitable’s e-mail justifies its monetization with a shopworn platitude: “The rights of inventors and patent owners are a critical element in our economy.”  We agree and we believe in the patent system. But granted patents are not necessarily valid ones (To wit, roughly 20 years of PTO data shows that around 80% of challenged patents require amendment or cancellation) (see, e.g., USPTO Historical Statistics).  The assertion of invalid patents harms, rather than helps, inventors, patent owners, and innovation, and is a wasteful drain on the economy and businesses.

Unified seeks to address this very problem using the legal framework set by Congress and protected by legal doctrines.  It is a longstanding right that anyone can challenge granted patents (see 35 U.S.C. § 302 and § 311) and Unified’s use of these procedures promotes Congress’ goals of establishing a more efficient patent system by limiting unnecessary, counterproductive costs (see Changes to Implement Inter Partes Review Proceedings, Post-Grant Review Proceedings at 48,680).  Though some PAEs do not like our model, under the AIA and the Noerr–Pennington doctrine, petitioning the government to review patents is a protected right regardless of purpose or motive (see, e.g., Noerr–Pennington doctrine, Wikipedia).

PAEs who assert invalid patents will never be happy with our success or our business model.  Unified, however, will continue to aggressively defend our technology zones against assertions based on poor-quality patents, and will do so using all available tools provided by Congress.  

Happy new year,

Unified Patents

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EMAIL FROM EQUITABLE IP

 

From: Dean Becker (xxxxxxx@equitableipholdings.com)
To:
Subject: Finding the Truth #1

I NEED YOUR HELP!

I am trying to learn more about the activities of Unified Patents and other
business groups that oppose patent rights via the use and threat of IPR's.

The rights of inventors and patent owners are a critical element in our
economy and one that is directly protected in the U.S Constitution.

I feel that an important way to protect patent rights is to clearly
understand what groups and companies actively oppose these rights.
Unfortunately, many of these companies think that it is best that they act
in secret.  I wonder what they don't want us to know?

Just one example--apart from the members listed on its website, Unified
Patents has stated in court filings that it must protect the identity of its
members.
 

If you know the identity of any business that is a member of Unified Patents
or any similar organization, please let me know.

Please make sure that you only send me legally obtained information that is
not subject to any confidentiality agreement that you may have with any
party.

You can send an email response to me at:

xxxxxxx@equitableipholdings.com
 

Happy New Year!

Dean Becker

2016 Annual Patent Dispute Report

Overview

While the volume of patent litigation in district courts dipped in 2016, the number of PTAB challenges stayed flat, approximately matching the number of petitions seen in 2014 and 2015.  District court litigation was down 24.8% from 2015 and 11.7% from 2014.   Predictably, high-tech patents were the most frequently asserted and challenged, accounting for nearly 60% of all 2016 disputes. NPEs also continue to flood district court and PTAB dockets. They were responsible for approximately 55% of all new cases in 2016, and more than 90% of all cases in high-tech. 

Figure 1: The number of PTAB petitions filed in 2016 was consistent with 2014 and 2015, while the number of patent suits filed in district court declined. 

Figure 2: High Tech patents continue to be the most frequently enforced and challenged. They are the subject of more disputes than all other patents combined.

Figure 3: PTAB remains the most common venue for patent disputes, closely followed by the Eastern District of Texas. The Eastern District of Texas saw more patent disputes than the next four "Top Venues" combined. 

Figure 4: 91.2% of all patent disputes in the Eastern District of Texas in 2016 were brought by Non-Practicing Entities (NPEs), more than PTAB or any other district.

District Court Litigation

Figure 5: Keeping with the trend from 2014 and 2015, patent litigation peaked in Q2 and slightly decreased in the second half of 2016.

Figure 6: Nearly 84% of all NPE litigation involved Patent Assertion Entities (i.e., companies formed for the sole purpose of monetizing acquired patents). 

Figure 7: High-tech companies are the most frequent targets of infringement suits. They represent 60.7% of the accused infringers in all district court litigation.

Figure 8: NPEs predominantly enforce high-tech patents, while disputes between operating companies involve a much more diverse array of technologies.

Figure 9: In 2016, patents owned by operating companies were at issue in only 9.1% of patent disputes in the high-tech sector. By contrast, NPEs were responsible for more than 90% of high-tech litigation.

PTAB Disputes

2016 also marked a significant milestone for Unified Patents. We filed 29 new IPRs against the most prolific NPEs, bringing our all-time total to 60 challenges. Unified Patents was the 5th most frequent petitioner at the PTAB in 2016, and by far the highest third-party entity. We are the only solution that deters NPE activity without incentivizing further litigation. 

Figure 10: The number of new PTAB disputes has remained relatively steady since 2014. 

Figure 11: IPRs continue to be the most popular procedure for patent challenges at the PTAB.

Figure 12: As in previous years, high-tech patents were the most frequently challenged at the PTAB in 2016.

Figure 13: NPEs were the respondent in approximately 65% of all 2016 PTAB petitions challenging high tech patents. 

Figure 14: Fontem Holdings faced the most PTAB challenges in 2016, followed closely by Papst Licensing (an NPE). 

Figure 15: Unified filed 29 IPRs against NPEs in 2016, making it the 5th most frequent petitioner at the PTAB.

Definitions

Sectors

High-tech = Technologies relating to software, hardware, and networking.

Medical = Technologies relating to pharmaceuticals, medical devices, and any other health-related technologies.

Other = Technologies relating to mechanical, packaged goods, sporting equipment and any other area outside of high-tech and medical patents.

Entities

Non-Practicing Entity (NPE) = Company which derives the majority of its total revenue from Patent Licensing activities.

Operating Company (or Op. Co.) = Company which derives most of its total revenue from product sales or services. 

Other = Universities / Non-profits / Government / Non-Governmental organizations (NGOs).

NPE (patent assertion entity) or NPE (PAE) = Entity whose primary activity is licensing patents and acquired most of its patents from another entity.

NPE (small company) = Entity whose original activity was providing products and services, but now is primarily focused on monetizing its own patent portfolio.

NPE (individual) = Entity owned or controlled by an individual inventor who is primarily focused on monetizing inventions patents by that individual inventor.

SME = Companies that make less than $200 million in annual revenue.

Venue, Federal District Court

TXED = Eastern District of Texas

DED = Delaware

CACD = Central District of California

ILND = Northern District of Illinois

CAND = Northern District of California

Methodology

The number of reported cases can vary based on what is included. Unified made its best attempt to eliminate mistaken, duplicative, or changes in venue filings, hence the totals may vary slightly compared to other reporting entities.

This includes all District Court and PTAB litigations between January 1, 2016, and December 31, 2016.

Statistics include litigations initiated by NPEs or Declaratory Judgments (DJs) initiated by operating companies against NPEs.

Unified strives to accurately identify NPEs through all available means, such as court filings, public documents, and product documentation.