Patent Risk Digest – May 2017

New Lawsuits Persist over Bluetooth-Enabled Products

After acquiring a pair of patents related to peer-to-peer communication, TainoApp Inc. is now asserting them in lawsuits targeting companies that make or sell various Bluetooth-enabled products incorporating Near Field Communications (NFC) functionality. Targeted products include headphones, pocket-sized photo printers, and speakers.

NFC is a method of short-range wireless communications that is increasingly common in devices and makes tap-and-pay services possible. The Puerto Rico-based TainoApp was assigned the patents from Sapphire Dolphin, an entity that previously asserted them in a two-year litigation campaign from early 2014 to early 2016, targeting more than two-dozen defendants for the provision of Bluetooth-enabled devices.

Bluetooth technology has long been a magnet for patent litigation. Significant campaigns of late have included:

Blue Sky Networks, LLC began a litigation campaign in February of 2017 targeting companies that provide smartphones that use Bluetooth to discover nearby devices (e.g. a headset) for communication.

Display Technologies, LLC filed a new wave of infringement cases in January of 2017 against companies that provide Android-based smartphones offering Android Beam, a file-sharing feature that uses NFC to initiate Bluetooth file transfers to another device.

Peppermint Hills LLC last summer asserted a single patent generally related to identifying a device via Bluetooth against makers of smartwatches and other wearable devices.

Papst Licensing GmbH & Company Kg, a German company, filed more suits in 2015 in a long-running litigation campaign targeting mobile device manufacturers—specifically those that make products using certain file-transfer protocols when connecting to a computer (over Bluetooth or USB, for example).

‘Internet of Things’ Litigation Snares Software Providers

Sookbox Development LLC has filed a second round of lawsuits in a campaign that it began earlier this year, targeting software providers for infringing a single patent related to configuring multiple mobile devices to interoperate with a network. The technology is used in applications that turn various mobile devices (in particular, Apple iPhones and Google Android devices) into mobile controllers for a smart home system.

Sookbox Development is an entity that formed in Texas this January. The Internet of Things (IoT) refers to the connection of a growing array of everyday products, services, and operations to the Internet. As we previously reported, this evolution has created a surge in patent risk for manufacturers, suppliers, and providers of anything from thermostats to cars, lights, refrigerators, and home security systems—whatever can be remotely controlled through smartphone applications.

Auto Sector Innovation Fuels Infringement Suits

Automotive manufacturers and companies that make or sell components related to electric motors are the latest targets of patent infringement lawsuits focused on the auto industry. Intellectual Ventures II LLC filed a group of lawsuits last month, alleging infringement of up to five patents in each. The accused products include water pumps, steering units and gear, and turbo actuators.

The auto industry is one of many sectors that continue to rapidly adopt new, patented technologies—for electric and autonomous vehicles; for audio and entertainment systems; for GPS, mapping, and communications; and for other “smart” systems. The owners of those many thousands of patents include inventors, giant tech companies, and entities that make a business of acquiring patents and using them to sue for infringement. And many have become more aggressive about protecting and exploiting their intellectual property. At risk are not just the big automakers but also downstream manufacturers, suppliers, and sellers of auto components. Litigations within the past year include:

Collision Avoidance Technologies Inc. has filed lawsuits asserting a single patent generally related to a system that uses multiple sensors to detect the distance and location of objects near a vehicle.

West View Research LLC has filed suit asserting two patents involving connected car systems such as BMW’s iDrive, and the companion mobile apps used in conjunction with those products.

Jakuta Diodes, LLC sued automakers and lighting product manufacturers over a single patent generally related to devices and methods for diffusing light. The automakers are accused of infringement through the sale and importation of motor vehicles with certain LED headlamps, while the other defendants are accused of infringement through the sale of certain LED lighting products.

Autoloxer LLC sued automakers and component manufacturers in a complaint asserting a single patent generally related to the remote imposition of limits on the operation of a vehicle—with accused products including GM’s OnStar system and Tyco’s MAGTEC system.

Many thousands of patents cover autonomous vehicle technologies such as those involving collision avoidance, braking, and media/communications systems. These likely present the next wave of risk for companies associated with the auto industry.

Effective Patent Insurance Hinges on Data, Expert Analysis

When it comes to insurable business risks, most are easy to project, quantify, and cover, thanks to vast amounts of available data on frequency and cost.

Patent litigation is different.

Confidential settlements and the complexities of the legal process in such cases make the big picture murky, and render most insurance products ineffective. Many providers possess some limited information gathered from public sources on litigations and patents, but such information tends to be spotty and misleading—and lacking in critical context that only experts in the patent space can provide.

The kind of information required to precisely quantify and effectively protect against patent risk is rare—but it does exist, and risk managers should insist that any patent insurance product they get is built on it. Be sure your provider has:

A robust and accurate database of 50,000+ patent lawsuits along with the asserted patents, plaintiffs, and defendants in the suits; their related market sectors; and which courts and judges are involved
Claims and transaction data on litigation resolution costs and related patent portfolio acquisitions
Underwriting based on an actuarial model built on that data
Just as critically, a diverse and deep team of patent, litigation, and market experts to advise and assist when risk manifests

With these components, an insurer can project with precision how likely a company or its customers are to be sued for infringement, how costly those suits might be, and what type of customized policy is most appropriate. In the next edition of Patent Risk Digest, we’ll discuss another key element of effective patent litigation insurance: a suite of available products customized to address the needs of companies of all sizes, and in any stage of development.

Contact Us

Contact patentriskdigest@rpxcorp.com to request more detailed information on patent litigation risk in your sector, as it applies to your particular business or clients.