Hope for a Little Miracle

RESTORE Act’s main difference from previous pro-patent bills: Bicameral support

If RESTORE passes, this would be the biggest game changer since the creation of the Patent Trial and Appeal Board in 2012.

BY LOUIS CARBONNEAU

In previous columns, I’ve written about the recent IP bill brought on the floor of Congress—aptly named the RESTORE Act (Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive Patent Rights). 

What a mouthful! It was formally introduced on July 30 by U.S.

Sens. Chris Coons (D-Delaware) and Tom Cotton (R-Arkansas). The House companion bill was introduced simultaneously by U.S. Reps. Nathaniel Moran (R-Texas) and Madeleine Dean (D-Pennsylvania).

So, this is a rare bipartisan, bicameral bill that would restore the presumption that courts will issue an injunction to stop patent infringers, strengthening protections for U.S. inventors, entrepreneurs, universities and startups. In short, it aims at abrogating the Supreme Court decision in the 2006 eBay v. MercExchange ruling that pretty much eliminated injunctions for patent cases, thus removing most of the leverage patent owners once yielded against infringers.

The proposed bill has garnered some visibility after authors expressed support in tribunes such as The Hill and the Financial Times, of all places.

I have become quite cynical of patent bills ever coming into law and am inclined to give this one the same long odds as its many predecessors. At the same time, few of those bills have been introduced in both chambers. One must wonder if perhaps, in an election year where some senators and congressmen/women look to prove to their electors why they were sent to Washington in the first place, we might see a little miracle.

Big Tech has been fiercely lobbying to protect the status quo. But if RESTORE passes, this would be the biggest game changer since the creation of the Patent Trial and Appeal Board in 2012.

Kudos to the U.S. inventors lobby that successfully advocated their case to Congress against all odds. Meanwhile, if you want an injunction in a patent case, you can always go to … Brazil!

Rare Suits

Though we are accustomed to seeing a constant flow of new patent assertion lawsuits from non-practicing entities (NPEs) that own or have acquired patents, we recently witnessed two relatively rare events that could be a harbinger of things to come.

In one case, U.S. online retail giant Amazon sued Nokia in Delaware federal court, accusing the Finnish telecom company of infringing a dozen Amazon patents related to cloud-computing technology. This was just the fourth time since 2008 that Amazon enforced its own patents, since its infamous campaign on the “OneClick” patent. 

This recent case is in clear retaliation against a previous (and still pending) case in which Nokia asserted its own patents against

Amazon—in what is often referred to as “legal tit for tat” to gain leverage in negotiations.

Even more surprising was the case filed by large patent owner Qualcomm against Transsion in Munich before the Unified Patent Court, alleging infringement of patents the U.S. chipmaker acquired from HP. 

We rarely see large companies that own thousands of homegrown patents assert patents they did not develop themselves. But why not? A patent is a property right (the “public franchise” label assigned to it by the U.S. Supreme Court notwithstanding) after all, and can be transacted freely with all its attributes. 

It will be interesting to see if this kind of acquisition for monetization purpose becomes more prevalent among large operating companies.

Big Patent Verdicts Abound

We have reported numerous times on how large patent verdicts may improve the health of the IP market—just like some large real estate transactions can suddenly boost home valuations in a given market.

In the first half of 2024, there were several large verdicts compared to the previous year—and a few new and notable awards since our last column.

In mid-July, Amazon was ordered to pay nearly $122 million after a U.S. court found the e-commerce giant guilty of patent violations against AlmondNet, an adtech company based in New York. A few weeks later, a jury in California federal court determined that data storage giant Western Digital violated an Austrian physicist’s patent rights and owes the owner of his patents more than $262 million in damages.

On August 23, a west Texas federal jury awarded Lashify Inc., inventor of the DIY Lash Extension System, a substantial victory in a patent infringement case against Qingdao Lashbeauty Cosmetic Co. when it found the defendant had willfully infringed three of Lashify’s patents. Lashify was awarded $30.5 million in lost profits. And no one

batted an eye.

Finally, Paltalk, Inc., a communications software innovator that powers multimedia social applications, announced another jury in the  Western District of Texas (the “Court”) had awarded the company $65.7 million in a verdict against Cisco Systems, Inc. for infringing one of its U.S. patents via its well-known Webex platform.

However, as I have commented regularly, patent verdicts are like moods and can swing rapidly.

For instance, Western Digital has appealed the quarter-billion verdict, and there are good chances it might be reduced significantly by a United States Court of Appeals for the Federal Circuit that is well known for not liking large patent awards. (Judges apparently have something against other people getting rich!)

Meanwhile, a Delaware district court overturned a jury verdict that ordered AstraZeneca to pay Pfizer $107.5 million for infringing on

the company’s cancer drug patents. The district judge ruled that the two Pfizer patents were invalid due to lack of enablement and lack of written description of the invention.

SEP mediation, anyone?

Lately, numerous cases have been reported that involved two large technology companies battling over standard essential patents.

On one side, we have the innovators who have spent years and billions in R&D to develop new technologies that the whole industry can build an ecosystem around. (Think USB, Wi-Fi, 5G, etc.)

On the other side, you have the implementers (charitably recasted as ”product innovators”) who have a massive channel in place to ship products worldwide and want to pay as little as possible to integrate these new standardized technologies into their product line.

Because both sides are usually of equal stature, this ends up being a gorilla fight that is both costly and time consuming for both sides, as no one wants to lose face or accept a precedent that will have a ripple effect on future negotiations. Most of the time, the main issue

revolves around how to calculate FRAND (fair, reasonable and nondiscriminatory) royalties.

If this sounds similar to divorce cases where the parties haggle over the amount of child support, you are not wrong. Here enters an old tool in family law that could prove useful in resolving SEP disputes: mediation.

Recently, some experts have started providing seminars to both innovators and implementers that could bring them to the negotiation table in a more constructive setting than on the doorsteps of the

courthouse. You can read a fascinating article my former colleague at Microsoft and good friend Michele Herman recently wrote that shows how this format was put to test at a recent American Intellectual Property Law Association meeting.

Let’s hope this becomes a compulsory step in the near future, because SEP disputes tend to suck up a huge amount of resources from the courts, clogging the judges’ dockets and contributing to longer delays before other inventors asserting their patents can get their day in court.

One just wishes that Nokia and Veriphone, which recently agreed to a broad licensing deal around their payment platform, could have

done so prior to the Finnish giant suing Veriphone in Germany. Hey, Rome wasn’t built in a day after all.

Noteworthy Deals

In an encouraging trend for large IP owners, several others reported new broad licensing deals and increased revenues. 

Among them, Adeia (formerly Experi) reported earning $87.4 million in the second quarter. Licensing highlights included agreements with Panasonic, Mitsubishi Electric and a few others. 

Interdigital’s revenues soared 120 percent year over year on the strength of its 5G license with Google and Lenovo’s extra $55 million payment from the UK appellate court. Finally, U.S.-based Qualcomm signed a license with Chinese original equipment manufacturer Honor.

Canada’s IP Push

In its most recent federal budget, the Canadian government announced a new Patent Box measure. The Canadian Chamber of Commerce recently published a supportive op-ed for the measure, which is worth reading. (Editor’s note: See the Toronto Globe and Mail, August 18.)

This, coupled with several other programs (IP Assist, Elevate IP, IRAP, etc.) that aim to help innovators reduce their IP-related expenditures, signals a clear will from Canada to make up for lost time and try to become an IP powerhouse—mirroring some Scandinavian countries of similar size. 

As with any well-meaning policy, no good deed goes unpunished

and the law of unintended consequences can surprise us. Thus, it will be interesting to see how these combined tools for innovators play out in the longer run.

Patent Pools in Vogue

It has been so difficult for small patent owners to enforce their rights individually that many have resorted to join patent pools that have the strength in numbers and can negotiate equal to equal with large implementers.

Outfits including Avanci and Sisvel have been quite successful with that model and have continued to create new vertical pools in parallel verticals such as IoT, video streaming, or automotive.

For instance, Sisvel just announced that ACER became the 23rd licensee to its Wi-Fi pool. Ironically, ACER’s top IP lawyer has shared that it is itself relying on patent pools to effectuate its IP strategy instead of relying on individual licensing deals. What is good for the goose …

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Award is a Lucky 13

Tangible IP founder and CEO Louis Carbonneau has been named among the world’s leading IP strategists by the Intellectual Asset Magazine (IAM) Strategy 300 for the 13th consecutive year.

This unique guide is a listing of individuals nominated by their peers and validated via in-depth research by a team based in London, Washington, D.C. and Hong Kong.

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