Patent Wars Aren't Finished

By Gary Kim August 23, 2011

A rational observer would now predict that a further outbreak of patent wars, and portfolio-bolstering acquisitions, now are likely. Some observers also are starting to say that the software patent process is broken, costing jobs and threatening innovation as well, and there also is some growing talk that reforms are necessary. Patent system is brokenread the book and complaints that the patent system is broken,while criticism is growing

Among Motorola Mobility Holdings’s more than 17,000 patents, a group of 18 may prove most useful in Google’s effort to fend off litigation targeting the Android mobile platform, Bloomberg reports.

The inventions date back to 1994 and form the heart of three Motorola lawsuits against Apple, making them among the stars of the portfolio, said David Mixon, a patent lawyer at Bradley Arant Boult Cummings in Huntsville, Alabama. They cover technology essential to the mobile-device industry, including location services, antenna designs, e-mail transmission, touch- screen motions, software-application management and third- generation wireless. Motorola’s Value to Google Found in 18 Patents

Patent disputes, though heated at the moment, are not unusual in the technology industry, and typically are dealt with by cross licensing. Remember the patent disputes Vonage faced in 2006? In that case, Vonage was ordered to pay $120 million to Verizon Communications for infringing on three of the company's patents. as reported here and here.

Vonage also was sued by Sprint, and settled that patent dispute with Sprint Communications, and entered into a licensing arrangement under Sprint's Voice over Packet ("VOP") patent portfolio. The parties have entered into an agreement to resolve this patent dispute as well as entered into a business relationship. In addition, Sprint has agreed to license Vonage its VoIP portfolio.

The agreement is valued at $80 million, including $35 million for past use of license, $40 million for a fully paid future license, and $5 million in prepayment for services. On September 25, 2007, a Kansas jury handed down a verdict finding that Vonage had infringed six Sprint patents. Vonage reports settlement of patent infringement case

After losing a patent infringement case to Verizon and reaching a settlement with Sprint Nextel, Vonage then faced a patent infringement suit from AT&T and Nortel. The Nortel dispute was settled without payment of any penalties.

The settlement also calls for a cross license of three Nortel and three Vonage patents and claims over all past damages will be dismissed without prejudice according to Vonage. The dispute had centered around patents behind 911 and 411 call numbers and click-to-call technology.

Vonage also put an end to its patent dispute with AT&T, agreeing to pay up to $7.8 million per year over a five-year period.

But some had questioned whether Vonage and other VoIP providers could survive the round of patent infringement lawsuits. All VoIP providers were threatened.

But there is growing sentiment that software patents, which now are issued with only general descriptions rather than specific code, for example, need reform. Software patent defects

The same article notes that other companies with large patent portfolios could be the next to go, including Alcatel-Lucent, Kodak, Research in Motion, and Nokia. That notion makes even more sense when you notice that shares of struggling RIM have bounced up about 10 percent this week, a move that likely indicates investors view it as a takeover target. More patent wars coming

"Patents are emerging as a new currency," Alexander I. Poltorak, chief executive of the patent licensing and enforcement firm General Patent, told the New York Times. "I've recently received several calls from financial analysts and bankers who want to know how to value patents and what does it mean."

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.


Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves

Contributing Editor

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