InterDigital Inc (IDCC)

[dndodd]

I wonder how many phones Huawei would have to have sold or sell to get o $500M at .019%?

My guess there is a very wide gap between .019% and the Arbitration results that will not go down as easily as you are guessing.


Discussion: The reason behind the new trend of patent transactions
Published: 2015-11-25 Source: IPRDaily
Previous research report confirmed the trend in recent years, patent transactions: 2011--2012 trading very active year patent, patent valuation is high; 2013 - to reduce transaction level of activity in 2014, the patent valuation decreased significantly, especially the lack of big transactions.
Patent transactions there is always behind commercial purposes, such as to curb competition through patent litigation, litigation century wars as demonstrated by Apple v.Samsung of that. However, from 2012-2015, the commercial competition in the smart phone as the representative of consumer electronics products, the more intense (Apple, Google, Samsung, Huawei, millet, etc.), the number of worldwide patent litigation has not significantly reduced. Therefore, the reduction of patent transaction reason seems to be looking for other ways.
I sort have been some changes in recent years, judicial environment, legislation, and other aspects of the government's industrial policy, trying to find out whether these factors, and the impact of the patent deal to what extent.
1. Effect of the new US patent law (America Invents Act) are: IPR program
The new US patent law created a new program for the patent declared invalid: IPR (Inter Parte Review), since September 16, 2012 implementation.
Related statistics show that: the proportion of IPR rights held invalid PTAB program requirements up to 77 percent (which is not included in the initiative to give up the rights of the patentee's claim, right PTAB not hearing request). In addition, statistical data POST GRANT HQ release also pointed out that the right to challenge people invalidation request, there are invalid or give up 73% of the claims.
Before IPR program was created, IPX (Inter Parte Reexamination) invalid claim success ratio is only 31%. However, the proportion of invalid patents in US District Court has been relatively high, although CAFC (the Federal Circuit Court of Appeals) sometimes overturn the district court's judgment. Robert Smith's "White Paper Report: UnitedStates Patent Invalidity Study 2012" CAFC statistics proportion of invalid patents:

Anyway, by the United States courts to invalid patents it is extremely expensive. In contrast, IPR provides a cheaper, faster, more efficient way invalid patents, US patent was invalid possibilities substantial increase in serious decline in valuation, patent deal also adversely affected. Richard Baker even think, IPR makes all US patents devalued by two-thirds of the US economy and therefore a loss of $ 1 trillion.
2. The United States Supreme Court's attitude change (2014)
CAFC has been seen as the establishment of the US "strong patent protection (Pro-Patent)" reflects the policy. Over the past few decades, CAFC indeed achieve better protection for the rights of people. However, this situation has changed. 2014, the US Supreme Court arraignment unprecedented up to six patent cases, judgments are all to some extent have a negative impact on the patent holder, which can be seen as the United States Supreme Court to correct or adjust the CAFC's Pro-Patent Policy .
It said six US Supreme Court ruling affect the following aspects to the patentee:
(1) Patent easier invalid
Alice v CLS Bank, a focus of controversy involved:. "Abstraction" is a general purpose computer to be implemented, whether to authorize theme? Supreme Court held that: no. In this case lead to business method patents can not be granted the basic patent, software patent also easier because the Patent Law Section 101 is invalid.
. Nautilus, Inc. v Biosig Instruments, Inc, the focus of controversy involved: the extent to which "do not know" will result in the patent being invalid? Supreme Court held that: Patents need to meet the "reasonable certainty", which is a relatively high standard. In this case led to the patent is easier because of the Patent Law Article 112 paragraph (f) shall be null and void.
(2) the patentee to improve the standard of proof for patent infringement
Medtronic, Inc. v Mirowski Family Ventures, LLC, the focus of controversy involved: Licensee filed in court, "declared non-infringement" of the complaint, the burden of proof of patent infringement which party? The Supreme Court said: patentee bear. Thus "declared no infringement" of the complaint, the patentee to increase the burden of proof.
Limelight Networks, Inc. v Akamai Technologies, Inc., the focus of controversy involved: lure infringement must be identified as a precondition for direct infringement? The Supreme Court said: Yes. In this case leads to a higher standard to prove lure infringement, patent infringement is more difficult to prove.
Bear (3) the cost of litigation
U.S. patent litigation of high legal fees is an important reason patented high valuation. Bessen et al report on "The Direct Cost From NPE Disputes", the average cost of patent litigation in more than one million US dollars in the following table.
However, in 2014 the Octane Fitness v. Icon Health and Fitness and Highmark Inc. v. Allcare Health Management Systems, Inc. case to change or adjust the allocation mechanism attorneys' fees (the so-called attorney fee shifting). At issue in both cases is: how to identify the other party shall be borne by the losing party's attorney fees "exceptional circumstances"? United States Supreme Court held that: District Court judge has discretion. That is, the local court has full discretion to make the other party shall bear legal fees, so that the patent holder (as the plaintiff) against the judgment and the possibility of other legal fees bear greatly increased.
3. to curb the abuse of a dominant market position for the patent holder to make SEP value lower
The implementation of certain industries (or national) standards, we must implement certain patents, these patents are called standard essential patents (SEP, Standard Essential Patent). SEP field communications industry's most famous people, including the rights: Qualcomm, Nokia, Motorola and other companies. Since the SEP is not open around, so the right people SEP occupies a very strong position in patent licensing negotiations, the commercial value of these SEP is also very high.
However, since 2013, national courts, government agencies, international organizations have the right to SEP people began to notice the use of market dominance and high patent licensing fees to obtain an attempt to curb the abuse of the rights of the patent holder. Here are the major impact of the case:
(1) Microsoft v. Motorola (2013.4)
Motorola is H.264 and 802.11 standards SEP right person, to obtain 2.25% Windows and Microsoft Xbox sales as license fee (to $ 200 Xbox, for example, patent licensing fees Motorola requested is $ 4.5 / each ).
US District Court Judge James Robart Microsoft needs to pay for the final judgment of the above criteria SEP patent licensing fee is $ 1.8 million per year, far below the $ 4 billion required by Motorola.
(2) Huawei v. InterDigital (2014.4)
Similarly, in 2014 Chinese courts hearing Huawei v. InterDigital's case also the judgment of the SEP's patent licensing fees.
InterDigital is a 3G communication standards (including WCDMA, CDMA2000 and TD-SCDMA) of SEP rights holders. InterDigital patent licensing fees to Huawei Huawei request is 2% related product sales. Chinese court judgment Interdigital as SEP violated human rights "anti-monopoly law," the payment of compensation of 20 million yuan to Huawei abuse of market dominance; In addition, the court-related SEP licensing rates should be Huawei's sales of related products The 0.019% [36].
(3) The international organization IEEE (Institute of Electrical and Electronics Engineers) modify SEP licensing policies (2014.10)
Although there are companies such as Qualcomm and Nokia's strong opposition, IEEE or modified for SEP licensing policies.
This amendment relates to (a) SEP Get ban based condition; (b) evaluate SEP patent license fee meets the RAND commitments ("reasonable and nondiscriminatory") of various factors. IEEE amendments have also been highly appreciated by the United States Department of Justice [38].
(4) Chinese antitrust investigation body to investigate Qualcomm (2015.1)
Qualcomm holds 3G and 4G communications standards in a large number of SEP. By Qualcomm chip sales and licensing fees in 2013 to get $ 24.8 billion in revenue worldwide, nearly half of which come from China. 2014, Qualcomm company by the China Development and Reform Commission investigation. In January 2015, the NDRC final decision to require Qualcomm to modify its patent licensing policy, the year 2013 at eight percent and impose a fine of market sales, total 6.088 billion yuan. (Author: Song Haining Jun He Law Firm)


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