$1,200 Cash Prize for Prior Art on "Earphones holder" Patent

On November 22, 2019, Unified added a new PATROLL contest with a $1,200 cash prize for prior art submissions for US 9,167,329. The '329 patent, generally directed to a magnetic earphones holder, is owned by Snik LLC (an NPE) and has been asserted in district court. To protect innovation and deter future frivolous assertions, Unified is offering a $1,200 cash prize for the best prior art on this patent.

The contest will expire on February 22, 2020. Please visit PATROLL for more information or to submit an entry for this contest.

Cassiopeia IP (IP Edge) patent challenged as likely unpatentable

On November 18, 2019, Unified filed a petition for inter partes review (IPR) against U.S. Patent 7,322,046, owned and asserted by Cassiopeia IP LLC, an IP Edge affiliate and well-known NPE.  The ‘046 patent, generally directed to secure use of a network service, has been widely asserted in 18 district court litigations against such companies as Best Buy, Western Digital, Aruba Networks, Epson America, and Funai.  

View Cassiopeia's district court litigation.  To read the petition and view the case record, see Unified's Portal.  Unified is represented by in-house counsel Alyssa Holtslander in this proceeding. 

Patent Litigation Report: Open Source 2012-2018

In a recent study, Unified examined district court litigation involving patents asserted against open source solutions. Unified identified approximately 260 district court cases since 2012 that involved open source projects/platforms.

First and foremost, the study revealed that litigation against products and features derived from open source projects has increased since 2012. While the number of cases is still relatively low compared to other sectors of technology, current trends seem to indicate that such open source litigation is becoming more common.

Utilizing the NPE status information provided through Unified’s Portal, the study also revealed that approximately 59% of these open source cases are initiated by NPEs.

A closer examination of these cases revealed that open source reliant “Systems” (such as APIs, operating systems, developer tools, etc.) were targeted about 38% of the time. “Web” products and services (e.g., UI/UX, hosting platforms) were the next most targeted at 27% of all open source cases. For more information about these categories, view Unified’s Open Source Zone definition (available here).

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Methodology

This report includes all District Court cases filed between January 1, 2012 and December 31, 2018.

Total 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 services. Statistics include litigations initiated by NPEs and 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.

Who do Non-Practicing Entities (NPEs) Target?

People in the IP community have been debating what type of enterprises NPEs target in their campaigns. In particular, some have suggested that NPEs only target large corporations while others claim that small and medium size enterprises (SMEs) are also being targeted in these litigation campaigns. To add some data into the debate, we decided to investigate.  

Using Unified’s comprehensive patent litigation and NPE database, we evaluated over 38,000 district court cases filed since the AIA was enacted to determine how frequently NPEs sued SMEs (which we defined as companies with less than $200 million in revenue and 200 or fewer employees) by looking at every defendant to find whether they were large enterprises or SMEs.  The results indicate more prolific NPEs and individual patent owners tend to sue SMEs more than others, especially at the beginning of campaigns.

First, we found that NPEs are suing hundreds of SMEs at a steady rate even though overall NPE litigation has been decreasing.  Second, the most prolific NPEs (and whose patents later are more often found invalid when challenged) often started campaigns by targeting SMEs.

Figure 1: Approximately one-third (32%) of all post-AIA NPE litigation involved an SME.

One theory for this is that SMEs are much less likely to take a case to trial or challenge a patent because of the high costs and risks involved. Prolific NPEs use this to their advantage to achieve quick settlements which can be used in later assertions with larger companies with more resources to fight, at which point most lose. To check this theory, Unified looked at the top 30 most litigious (by volume) post-AIA NPEs to identify any patterns in their filings based on timing and parties. The results bear out the theory NPEs tend to target SMEs earlier in an assertion campaign. Below are some case studies of such behavior:

Figure 2: Uniloc, owned now by Softbank, targeted SMEs at a significantly higher rate in its earlier campaigns than in later ones. View Uniloc’s SME targets here.

Figure 3: Blue Spike’s targeting of SMEs was even more pronounced. View Blue Spike’s SME targets here.

SMEs were targeted almost half of the time and 31% more often by the top 30 NPEs (by volume) than average.

Figure 4: The top 30 NPEs (by assertions filed), sued SMEs 47% of the time.

Most NPE assertions against SMEs are attributable to Patent Assertion Entities (or PAEs). It should be noted that NPE (Individuals) —e.g., individual patent owners or shell entities run by a single attorney — were the 2nd most frequent filers against SMEs, accounting for over 2,000 new complaints (or 32% of all NPE filings against SMEs) between 2012 and 2019.

Figure 5: PAEs account for 65% of district court assertions against SMEs. View all NPE / SME cases here.

In summary, the data indicates specific types of NPEs use strategies which appear to target SMEs to drive higher returns, which It is unfortunate since SMEs have traditionally been the US economy’s innovation and jobs engine.

Methodology

This report includes all District Court cases filed between January 1, 2012 and October 23, 2019.

Total 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 services. Statistics include litigations initiated by NPEs and Declaratory Judgments (DJs) initiated by operating companies against NPEs.

A small or medium-sized entity (or SME) is defined as a company with less than 200 employees and with under $200 million in annual revenue. Unified made its best effort to accurately identify SMEs through all available materials such as government records, financial reports, tax documentation, and official company websites, profiles and statements.

Unified strives to accurately identify NPEs through all available means, such as court filings, public documents, and product documentation. NPEs are categorized as NPE (PAE), NPE (Small Company), or NPE (Individual) based on the definitions below:

• NPE (Patent Assertion Entity) = 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.
  
  

Carucel Investments patent determined to be likely invalid

On November 12, 2019, the Patent Trial and Appeal Board (PTAB) instituted trial on all challenged claims in an IPR filed by Unified against U.S. Patent 7,979,023 owned by Carucel Investments, an NPE. The ‘023 patent is related to in-vehicle cellular systems and has been asserted against numerous automotive companies such as Fiat Chrysler, General Motors, and Mercedes-Benz.

Unified is represented by Raghav Bijaj and David McCombs from Haynes and Boone as well as Roshan Mansinghani in this proceeding. View Carucel's district court litigation here. To read the decision and view the entire case proceeding, visit our Portal.