This year’s 10 millionth utility patent marked a symbolic milestone. More important, it gave pause for many to reflect upon the fundamental question: Why does one file for a patent?

Those who personally interact with inventors daily know that their motivations vary greatly. Many individuals want the social recognition that they have contributed something of value, and a patent is the currency that proves it. For them, a patent is something you frame and provides bragging rights. They often have no ulterior motivation.

Others dream bigger and often believe that once they obtain a patent, they have unlocked the key to paradise and solved a world’s problem worth a monumental investment from others. They often drop back down to earth after having tried unsuccessfully to commercialize it for years, only to realize that having a great idea (and a patent) was just the beginning and that the hardest part—by far—is bringing a product to market.

Others are more realistic in terms of their skill sets and are happy to look for partners who will license or sell their invention. Most of these people also fail miserably, as companies nowadays rarely feel the need to pay to license in rights from inventors—especially if the product is half-baked and most of the work is still to come. The fear of an injunction that could stop them from selling an infringing product, a driver once upon a time for licensing deals, is no longer present.

On the other side of the spectrum, we see large corporations still filing thousands of patents a year—while at the same time lobbying hard to weaken the patent system. What may appear to many as a rather schizophrenic behavior (why devalue an asset class you keep investing in internally?) is actually quite clever: Patent enforcement is rarely a battle between who is right and who is wrong but rather who has the resources to fight a long, protracted battle. At that game, the house always wins, and this means a patent becomes a lot more valuable in the hands of someone who has vast resources to enforce it than in those of inventors who do not.

Patents offer an unpleasant peek

Patent filings also offer an opportunity to take a rare peek into the “soul” of a corporation, as it gives a preview of where the company’s research and development efforts are directed—sometimes years before the product sees the light of the day (if it ever happens). As large technology companies yield more power and influence (i.e., Amazon getting billions in tax credits for its HQ2 corporate headquarters or forcing the City of Seattle to reverse itself on a “head tax” to help with the homelessness crisis it is partially responsible for), the last thing the citizenry wants to see is a Fortune 50 company receiving a government-approved monopoly on technology that will only accelerate that trend.

Yet we have noticed lately more patent applications emanating from large corporations that pertain to what I would call the “big brother” category. Recently, the New York Times reported: “A review of hundreds of Facebook’s patent applications reveals that the company has considered tracking almost every aspect of its users’ lives: where you are, who you spend time with, whether you’re in a romantic relationship, which brands and politicians you’re talking about. The company has even attempted to patent a method for predicting when your friends will die.”

The Guardian recently reported about the publication of another Facebook patent application describing a system that would allow the company to “activate your phone’s microphone, using inaudible signals broadcast via a television, to monitor your television viewing habits.” Creepy? You bet. Want more? “A newly public patent shows Facebook is eyeing tech that automatically chooses an animated selfie based on your current emotional state.”

To be fair, Facebook is not alone in its quest to exert more control over people’s information or behavior. We’ve seen patents from almost all large technology companies that were some variations on this theme. Recently, there were reports about Walmart having obtained a patent for “technology that will allow bosses to eavesdrop on their workers. The audio surveillance technology can measure workers’ performance and listen to their conversations with customers at checkout.” This is probably just a temporary measure because most cashiers will eventually be replaced by robots, but nevertheless …

Advancements described in a patent can be used in everyday scenarios, such as a recently issued patent to Samsung pertaining to new facial and iris recognition. But you can easily see the slippery slope. If you cannot trust a company’s management to maintain a certain moral compass, it becomes incumbent for employees at these large organizations to hold the company accountable to higher ethical standards—as Amazon employees did recently when they asked Jeff Bezos to stop selling Amazon’s own face-recognition software to law enforcement. These people deserve a big, free, two-day-delivery hug from the rest of us who do not want our every moves tracked.

This followed similar employee activism at Google over providing AI technology to the Pentagon, and at Microsoft over its contract with the U.S. Immigration and Customs Enforcement. In other words, in all of these cases, the company had to change course because of internal pressures from the rank-and-file. Robots won’t have those ethical quandaries in the future, so now may be the right time to start thinking about types of patents that should be given additional scrutiny before being allowed—just like any patent application that could affect national security is currently subject to an additional screening.

Meanwhile, wear sunglasses and leave your phone at home when you go for a walk!

Buyers and sellers

Despite the usual summer slowdown, we’ve still seen a fair amount of activity on the IP transaction side. Google took a trip to the Middle East to snatch Israeli start-up LucidLogix, which had ceased operations a few months prior. Google reportedly paid $40 million for the defunct company’s assets, the lion’s share being Lucid Logic’s patent portfolio. This is a rare happy ending for a company gone bust. It goes to show that a strong IP portfolio can still be of significant value, even when a company is not successful commercially. …

Close to home, defensive aggregator RPX reported “a number of acquisitions on behalf of its patent risk management network in June 2018, obtaining rights to the patents involved either to end litigation against its members or to prevent it in the first place.” Given the RPX practice to do licensing deals as well as straight acquisitions, it is unclear whether this announcement covers both or just the latter. The transactions are said to have occurred within the Mobile Communications and Devices market sector, as well as in the networking space. …

After divesting a portion of its portfolio to Quarterhill-owned Canadian non-practicing entity WiLAN, MagnaChip Semiconductor doubled down and assigned some of its patents to Texas-based NPE Longhorn IP. …

We don’t often hear of IP-driven transactions in the medical device space, but on July 9 Bovie Medical announced a deal with Tennessee-based Specialty Surgical Instrumentation Inc. whereby SSI will receive Bovie’s electrosurgical business and related IP in exchange for a $97 million cash payment. …

After previously picking up assets from Sharp, Intel and SK Telecom, Chinese mobile devices manufacturer Oppo made its largest patent acquisition so far by acquiring more than 20 patent families—totaling about 240 individual assets that cover audio and visual technologies—from Dolby.

Winners and losers

U.S.-based Motorola sent a loud and clear signal that its two-way radio technology patents were not to be encroached upon when it scored an initial International Trade Commission victory against China’s Hytera Communications. A final decision (and possible ban to importing in the United States) is due this fall. …

Tech giant ZTE was condemned to pay Maxell $43 million for infringing its smartphone patents. But it wasn’t a half-bad week for the beleaguered Chinese company, as the Trump Administration lifted its prohibition to sell products in the United States after a few weeks’ hiatus. … Pursuing its winning streak, publicly traded non-practicing entity Finjan successfully closed a campaign against Trend Micro that saw the latter take a license to Finjan’s cyber security portfolio. At $13.5 million, no one will argue this was a mere nuisance settlement. … Another publicly traded IP company, Marathon Patent Group, faces a possible delisting from NASDAQ after losing two of its board directors. …

It appears that patenting is still an old boys’ club, as recent research found that only 7.5 percent of patents were granted to women and that just 5.5 percent of patents commercialized or licensed were done so by women. Clearly, there is no doubt that women are as innovative as men, and female underrepresentation in the engineering world (15 percent to 20 percent) only partially explains this phenomenon (as you’d otherwise have the same percentage of female inventors). Hopefully, this will change with time.

Handshakes

WiLAN announced two licensing deals—one with Brother, the other with Etron— apparently involving patents from Kodak and Infineon, respectively. …

Who wants to go to court in the summer, especially when training camps for the National Football League are under way? Apparently not the NFL, which opened its checkbook and settled a pending case brought by OpenTV that alleged infringement of eight of its patents. … The sunny days also seem to have made lighting technology less quarrelsome; it would appear that Taiwanese  LED maker Epistar shook hands with All Star Lighting. The light bulb went off, and it looks like several lawyers will be able to take their summer vacations after all.

… Fitbit and Immersion also called off the hostility by settling their dispute over haptics patents. …

Interdigital announced that it entered into a multi-year, worldwide, non-exclusive, royalty-bearing patent license agreement with Fujitsu Connected Technologies Ltd. What is remarkable these days is that it was achieved without any litigation. Do the Japanese know something U.S. companies don’t?

I’ll see you in court

In life as in patent assertion, grit and resilience are paramount skills to success. Body camera manufacturer Digital Ally can attest to this as its patent suit against Taser and WatchGuard can now move to the next phase after having successfully fended off no fewer than five direct challenges to its validity. And I always thought you could only shoot a Taser once! …

Remember the Supreme Court decision in Oil States Energy Services v. Greene’s Energy Group that validated the constitutionality of the Patent Trial and Appeal Board? We discussed it extensively in previous columns, including the veiled invitation by SCOTUS to claim that invalidation of a patent by an administrative tribunal could be seen as a “taking” under the U.S. Constitution. This quickly led to a class action initiated by a patent owner whose invention was declared invalid by the same agency that first granted it, the United States Patent and Trademark Office. Not surprisingly, the Department of Justice is now arguing in a motion to dismiss that case summarily that inter partes reviews do not amount to such a “taking” and the lawsuit should be rejected. …

I’ve been asked by one of our readers to handicap the patent trial between Groupon and IBM, which I declined to do. I am not in the individual prediction business; I would rather focus on trends and industry-wide shifts. Although I am often called to consult with analysts who want to know who has the upper hand in some specific patent battle, my response is always the same: There are only two parties who really know that case in depth enough to comment (i.e. each party’s main counsel), and one of them is invariably going to be wrong.  Regardless, it is going to be an interesting one to watch, as we rarely see a Fortune 50 company not named Apple go all of the way to trial on patent cases. If IBM loses, I hope it had bought a discount from Groupon. …

Speaking of Apple, it pulled out the big guns against arch-nemesis Qualcomm and fired a salvo of six IPR challenges to Qualcomm’s patents. It appears the recent settlement between Apple and Samsung has freed some extra resources at its headquarters in Cupertino, California. … British Telecom, another behemoth, recently flexed its IP muscles by filing a lawsuit accusing Fortinet of infringement of five of its patents around cybersecurity.

From the bench

You must have heard that President Trump chose appellate judge Brett Kavanaugh for his next Supreme Court nominee. Apparently, Merrick Garland was no longer available. … Given how many times SCOTUS has left patent owners holding the bag in recent years, everyone should be supremely interested in what Justice Kavanaugh (should he be confirmed) has to say about IP.

Around the world

European Patent Office Director Antonio Campinos began his five-year tenure and replaced controversial predecessor Benoît Battistelli, who was at the helm for the eight previous years. Battistelli has been accused of abusing staff rights at the office, including introducing proposals to scrap permanent employment contracts, allegedly dismissing staff members against the wishes of the administrative council, and overseeing “shocking events” at the office. And you thought the White House was a mess? …

The European Commission has set up a group to consider licensing and valuations of standard-essential patents. The SEP group was created by the commission to “deepen the expertise on evolving industry practices related to the licensing of SEPs in the context of the digitalization of the economy.” …

It has been said numerous times that China loves to share other people’s secrets, but apparently not its own. China is filing cybersecurity patents at an “unprecedented level,” according to a report from Minesoft and Patinformatics. The report showed that China had surpassed the rest of the world in cybersecurity patents, with a specific focus in the sub-category of authentication.

Similarly, taking a page from the Apple-Samsung playbook, the number of applications for design patents with graphic user interfaces in China has grown rapidly during the past three years at a rate hovering around 50 percent. Patent filings around business methods are also surging in China due to a more favorable policy environment. Why does it sound like the United States 10 years ago?

On the legislative front

Our dear elected also had a burst of energy before leaving to do what they do best: fund-raising. U.S. Reps. Thomas Massie (R-Kentucky) and Marcy Kaptur (D-Ohio) recently introduced H.R. 6264, the Restoring America’s Leadership in Innovation Act. (I love those titles, by the way; it’s like watching a movie trailer. You don’t really need to see the details because you know exactly what the subtext is.)

Nevertheless, this pro-patent bill received support from the usual pundits and was opposed by unsurprisingly by the large tech companies. Because it will likely join the rest of the patent-related bills stalled in Congress for years, there’s no need to delve into this too much, but for mentioning that this continues the streak of pro-patent legislation and provides a decent view of how our politicians view this narrative. We’ve come a long way since all you had to do was say the word “troll” and everyone would answer “patents bad.” …

Of more immediate significance is the ongoing effort to tackle the U.S. patent code Section 101 beast (patentable subject matter) at many levels. It was heartening that the always influential New York Intellectual Property Law Association “has decided to support the joint IPO-AIPLA Section 101 statutory proposal as the best path forward to advance the debate on patent eligibility.” This effort is the most likely to bring forth changes in the near future, assuming the courts decide to follow its lead.