Patent Litigation Weekly: Uniloc Keeps Filing Software Suits, and NPE Patents Fare Poorly at Trial
This Week: Undeterred by its district court loss to Microsoft — and waiting on a Federal Circuit appeal in any case — Uniloc sues dozens of companies for 'software activation.' Plus, a new study shows that the most-litigated non-practicing entity patents don't seem to hold up at trial.
By Joe Mullin|September 27, 2010 at 12:00 AM
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Uniloc sues more companies for “software activation” U.S. Patent No. 5,490,216—which is owned by California-based Uniloc and purports to cover “software activation,” a type of antipiracy system widely used to register and control copies of software—was nearly one of the most valuable patents to make its way to court last year. In April 2009, Uniloc won a $388 million jury infringement verdict against Microsoft in federal district court in Rhode Island. Unfortunately for Uniloc, the judge who oversaw the trial tossed out the award five months later, ruling that the software giant had not infringed the patent and that the jury had no basis for its verdict. Uniloc lawyers, who hope to reverse that reversal, made their case to the U.S. Court of Appeals for the Federal Circuit on September 9. Meanwhile, the company isn’t letting the Microsoft setback prevent it from pushing forward with their litigation campaign—this time it’s headed for the tried-and-true venue of East Texas (where judges may be more comfortable with nine-digit jury verdicts). In a pair of lawsuits filed within days of the Federal Circuit argument, Uniloc accused a total of 27 software companies of infringing the ’216 patent. The new suits are in addition to four other complaints that Uniloc has filed since last November, bringing to 73 the total number of companies sued over the ’216 patent. More than 25 of those suits have settled, according to the company. Uniloc says it invented the “software activation” technology covered by the ’216 patent in 1992. At that time, software contained a special “key” number that was activated via telephone. Later, software-activation keys moved online. Either way, Uniloc claims it was the first to come up with the idea of using keys to “activate” legitimate, non-pirated copies of software, and deserves to be compensated for its creation. “When we invented it in 1992, software activation was an extremely disruptive, elegant, unprecedented way to do copy control,” CEO Brad Davis said in a recent interview with The Prior Art. While Uniloc’s litigation has made a lot of headlines, Davis said that there’s more to the company than patent infringement suits. Uniloc, he said, has plenty of software deals in place with customers that have no connection to litigation whatsoever. “For us it [litigation] is such a foreign thing,” said Davis. “We make great software and want to license it to everybody who wants to license it.” The company’s software-activation product is sold under the name SoftAnchor. Still, Davis said, he feels that now is the right time for the company to expand its patent-enforcement actions. “There’s such a taint these days—any small company with a great idea is labeled a patent troll,” he said. “We’re not about litigation. We’re settling these cases as fast as we can. It’s tough to be an up-and-comer. There’s huge market players we’re competing with, and we are duking it out in the market.” Whatever happens with the Microsoft appeal, it won’t affect this new batch of litigation, since Microsoft’s trial court win—which was based on a post-trial motion filed by the company’s counsel at Fish & Richardson—didn’t invalidate the Uniloc’s patent. And while the ’216 patent is the only one Uniloc has asserted in litigation, Davis said the company has 55 other patents that have either been issued or are pending. At both the trial and appeals court, Uniloc was represented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. Documents for this story:
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