Litigating, licensing, and other activities involving “patent trolls” have been a focus of numerous past commentaries here at The Legal Pulse. Two developments in the realm of trolls (often more politely called “Patent Assertion Entities,” “Non-Practicing Entities,” or “Patent Monetization Entities”) caught our eye last week, both of which will have an impact on patent and antitrust matters into 2013.
FTC Workshop. On Monday, December 10, the Federal Trade Commission (FTC) held a “Patent Assertion Entity Activities Workshop.” The purpose of the workshop according to the Commission was “to explore the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy.” Ars Technica has an excellent report on it here. PAEs/trolls rarely venture into the public eye or speak to the press, so the presence at the workshop of the leadership of Intellectual Ventures, Mosaid, and Round Rock Research in one place was quite remarkable.
It’s certainly far from clear whether the Commission has an interest in enforcement activity with regards to patent trolls, which laws or legal theories it could utilize, or which factual situations might give rise to federal action. One complicating factor, which became clear at the workshop, is that some tech companies which might be targets of troll suits, such as Nokia, have found it beneficial to do business with their would-be courtroom combatants.
Jury Verdict in iPhone Patent Suit. Meanwhile, on Thursday, December 13, a federal jury in Delaware found that several features in Apple’s iPhone, including how it accepts and rejects calls, infringed patents owned by patent “holding company” MobileMedia Ideas LLC.
Others have used less polite terms to describe MobileMedia, such as “cut-and-clear patent troll.” It is owned by Sony, Nokia, and MPEG LA. MPEG LA is an administrator for a pool of standard-essential patents in video compression technology. MobileMedia holds over 300 patents, including reportedly 122 issued to Nokia and Sony. Sony, in turn, is one of MPEG LA’s shareholders, and MPEG LA’s CEO is also CEO of MobileMedia. MPEG LA has reportedly been the subject of a Justice Department investigation involving claims that MPEG LA used its patents to hamper a competitive web video technology.
Targets of patent troll suits have complained that some “operating companies” such as Nokia use reputed trolls like MobileMedia to wage “patent wars” against competitors. If the suits had been brought by the operating company itself, defendants like Apple would fight back with infringement counterclaims, something that can’t be lodged against trolls, who don’t produce anything. Such concerns were raised at the FTC workshop, and have in fact been raised in court overseas. Some may ask, however, how Apple’s involvement in the patent holding company The Rockstar Consortium, which paid $4.5 billion for 6,000 Nortel patents, is any different. One possible difference: so far, Rockstar has not asserted its patents offensively.
Some experts have argued that patent litigation in times of technological and economic expansion is to be expected. At a WLF Media Briefing last month, George Mason University Law School Professor Adam Mossoff pointed as an example to the “sewing machine patent war” of the 1850s.
We can thus expect more of the same, perhaps even intensified, battles featuring patent trolls/PAEs in 2013, and, whether warranted or not, many more calls for federal action in the interests of “innovation.”