High Efficiency Video Coding (HEVC) Patent Pools compared based on Validity and Value

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As part of our goal of improving patent quality, Unified used its new APIX (validity) & CITX (value) tools to compare the US issued patents of the MPEGLA and HEVC Advance High Efficiency Video Coding ("HEVC") licensing pools.  In fact, anyone can try the tools here.

In this case, we obtained the publicly available list of US patents in the respective MPEGLA HEVC (340 US patents) & HEVC Advance (118 US patents) pools to be used in our study.  Note, US patents are a small percentage of both pools.  We then ran them against APIX and CITX to see which ones were rated the highest and lowest.

APIX assesses over 30 variables to determine validity by rating each patent on a scale of "AA" (highest) to "D" (lowest). Patents with an AA or A rating have a greater than 50% chance of surviving a challenge at the PTAB.   For more details on how APIX works, see the full description here. 

 

The study revealed that 176 patents (52%) of the MPEGLA pool received the highest "AA" or "A" APIX rating.   48 patents (41%) of HEVC Advance's portfolio received an "AA" or "A" rating. 

CITX rating evaluates a patent's value using a more traditional assessment of the number of forward citations compared to issued patents in the same year.  The majority of US patents in each pool received a "D" (lowest) CITX rating. 

HEVC Advance CITX Score
APIX Score AA A B C D Total
AA 1 1 8 10
A 4 2 3 29 38
B 8 3 4 25 40
C 7 1 20 28
D 2 2
Total 20 7 3 4 84 118

Cross-referencing CITX ratings with Unified's unique APIX ratings, we can identify what appear to be the best patents based not only on value, but also on validity.   Our analysis shows that approximately 6.7% of HEVC Advance's patents are rated highestreceiving an "AA" or "A" for both APIX and CITX (indicated by the GREEN region).  By contrast, less than 1% of MPEGLA's HEVC patents received a similar rating. 

MPEG-LA CITX Score
APIX Score AA A B C D Total
AA 59 59
A 1 2 3 111 117
B 6 2 5 1 104 118
C 2 1 1 1 34 39
D 7 7
Total 9 5 9 2 315 340

These results are not surprising considering that many believe only a narrow subset of patents are of high validity and value.  Tools such as APIX and CITX allow companies to quickly assess a portfolios and identify the best and worst patents.  Sophisticated entities can then assess how best to mitigate any pool risk and decide from who and when to take licenses to decrease risk and/or lower costs.   Try the tools yourself here.

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