OFweekRobotRecently, a foreign drone company (Synergy Drone) launched a patent lawsuit against China’s DJI and France’s Parrot, accusing the two companies’ drone products using “headless mode” (in the direction of the remote control). Sense is the direction: no matter how the drone flies, it is based on the sense of direction of the remote control, which is a common function of the drone) plagiarizing one of the company’s drone patents and infringing the company’s interests. From the background of Synergy Drone, this lawsuit is most likely a “little move” by patent trolls, whose purpose is to extort huge compensations.
The lawsuit states that the patent was issued by Katherine C. Stuckman and Michael D. Invented by Reynolds, submitted in 2008, and has changed hands several times since. Some foreign media pointed out that Nicolas Labbit, an intellectual property lawyer of Synergy Drone, has repeatedly filed lawsuits with several companies due to patent disputes. He will launch a series of infringement complaints against related companies on a single technology patent. 8 auto companies including Honda and 25 U.S. banks.
What is a patent troll?
Patent trolls, also known as patent roaches and patent sharks, refer to companies that have no physical business and survive mainly by actively launching patent infringement lawsuits. Since there is no physical business, it is also known as NPE (Non-Practicing Entities, non-practicing entities) internationally. Intellectual Ventures (Intelligent Invention), Interdigital, Acacai, etc. are all well-known among patent trolls.
Patent warfare is a common business practice. In 1993, the United States used patent cockroaches to describe companies that actively launched patent infringement lawsuits. Such patent companies often have a strong parasitic smell. The term Patent Troll originated in 2001, when Techsearch and its lawyer Raymond Niro launched a patent lawsuit against Intel, when Peter Detkin, Intel’s deputy attorney general, used the term Patent Troll to describe Techsearch and Raymond Niro, later alleged to have specialized in acquiring patent rights from inventors at low prices. The so-called patent trolls are clearly motivated by money.
In terms of characteristics, professional hooligans mainly have four characteristics:
1. Buy patents from bankrupt companies at low prices
2. Do not produce products by yourself
3. Buy important patents to sue big companies
4. Attack in the dark
As a professional patent troll, its patent acquisition is divided into two ways. The first is to take MobileMedia Ideas as an example: the giant company behind the scenes will package and license a set of patents owned by itself to “patent trolls”. MobileMedia Ideas is jointly funded by Nokia, Sony and Tagivan. It is a combination of inventions that are widely used in portable devices such as smartphones and laptops. The second one takes Intellectual Ventures (IV) (High Wisdom Invention) as an example: High Wisdom Invention Association cooperates with small companies and individual inventors to obtain patent rights. A portion of the revenue from this patent goes to the collaborators. And when Gao Zhi Invention found out that a certain company was infringing, it would not hesitate to take the other party to court.
The operation methods of the above two patent troll companies are almost the same as the final infringement claims, mainly through strategic cooperation, asset operation, and capitalization of the patent asset packages they own, such as common patent sales, patent licensing and patent infringement litigation, in order to obtain income. Among them, patent infringement litigation is their core weapon. By launching large-scale infringement lawsuits, some defendants are forced to obtain early settlements, and then use these funds to continue to litigate with their targets to earn maximum benefits. Such patent troll companies attract investors or promote stock price growth through patent operating income, obtain new funds for further R&D, creation of patents or acquisition of patents, and then continue to operate patent packages, forming a cycle.
The following are some of the more well-known lawsuits
In 1995, patent troll Pitney Bowes sued Hewlett-Packard for infringement on the first three of seven “claims” in a patent filed in 1982. On June 4, 2001, the two parties reached a settlement and HP paid the plaintiff $400 million. Pitney Bowes continued to sue Apple, Panasonic Electronics, Samsung and other eight electronics factories with this patent.
In 2010, MobileMedia Ideas filed a patent infringement lawsuit in the Delaware District Court, claiming that Apple had infringed on 16 of its mobile phone patents, and asked the court to order Apple to pay $18 million in damages. In September 2016, the U.S. District Court of Delaware ruled that Apple’s iPhone 3G, 3GS and 4 models infringed the “polite-ignore” mobile phone call mute call rejection technology patent held by MobileMedia Ideas, and ordered it to Apple paid $3 million in damages.
This is only a very small part of patent infringement lawsuits initiated by professional hooligans. According to the statistics of Patent Freedom, the number of patent lawsuits initiated by NPEs around the world is on the rise every year, from 588 in 2004 to 4,602 in 2011. Notable companies such as Apple, HP, Samsung, AT&T, Dell, Sony, HTC, and others are among the most frequent defendants in NPE lawsuits. For example, Apple faced 44 such lawsuits in 2012 alone.
In recent years, with the continuous expansion of the scale of Chinese enterprises and the layout of overseas markets, patent hooligans have sharpened their knives and opened their bloody mouths, ready to enjoy the “big fat sheep” in their eyes. DJI’s alleged patent infringement is just one of them. According to Patent Freedom’s statistics, both Huawei and Lenovo encountered 13 lawsuits initiated by “patent trolls” in 2012, and only in the first half of 2013, Huawei encountered 13 lawsuits. The number of such lawsuits rose to 15. This also reflects the innovation and rise of Chinese companies from another aspect. There is a saying in the industry that “the most frequently accused may also be the most innovative”. In 2015, Samsung was the second largest company in the US patent licensing, and in 2014 the European patent licensing In terms of R&D investment, Samsung ranks first among global technology companies. In 2015, Samsung was sued for the most patents, which just shows that Samsung is one of the most innovative companies.
To grow a company, globalization is an inevitable way. Faced with those “patent hooligans”, how should Chinese companies deal with them if they want to go overseas safely? First of all, Chinese enterprises should regard patent litigation as an important part of their own development strategies. The first task of Chinese enterprises after encountering a ‘patent troll’ is to actively respond instead of blindly withdrawing from the market. Requests for invalidation, or bypassing the patent infringement to avoid unnecessary litigation. In addition, it can continuously strengthen its own patent strength by purchasing patents and licensing patents.
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