Patent licensing firm Wi-LAN raking in millions of licensing dollars

Jim Skippen, CEO of Wi-LAN. (Etienne Ranger, OBJ)

Strong fundamentals: Recurring-revenue model and strong cash flow .

Chief executive Jim Skippen's view : "If we were to shut the business down today and just collect the money from the licensing agreements we have right now, we would bring in $140 million,"

That alone ought to give the company's stock a price of roughly $1.50, he says; combine that with the approximately $1.05 of additional implied value because of the company's stellar balance sheet of more than $101 million, and you've got a "severely undervalued" stock (Wi-LAN's shares have been trading at a median of around $1.58 over the past six months).

While big litigation settlements and one-time deals aren't out of the question, Mr. Skippen prefers to highlight the success of the company's licensing program and the steady revenue that it brings, especially since those payments will have to keep rolling in even in turbulent economic times.

"We've already signed 12 agreements in Q1, we're continuing to add licences, and they aren't usually one-time payments," he says, noting that Wi-LAN now has approximately 170 licence agreements to draw upon.

The company is continuing to see positive cash flow, a handy trait as it proceeds through the long – and often expensive – discovery phase of its various patent litigation cases. "We're not going to see a lot of dramatic announcements (on that front)," Mr. Skippen says.

Nonetheless, he points to recent small victories as indications that the legal proceedings are progressing well; for instance, a Texas court recently allowed Wi-LAN to include its WiMAX and Bluetooth technology patents in another case already involving the company's Wi-Fi and CDMA (code division multiple access) patents, broadening the assortment of technologies covered in its claims against its defendants.

All things considered, Mr. Skippen isn't perturbed by the distress seen elsewhere in the technology markets, nor by Wi-LAN's relatively low stock price.

"Note that we've signed 12 agreements over one of the worst bear markets in any of our lifetimes, including (the second-largest wireless company) Samsung. If we continue at that pace, we'll have the exact number of deals as last year," he says.

"We're focusing on quality, consistent performance, and as long as we can execute on that, we believe the stock price will take care of itself"

Linux Foundation urging Linux fans to "calm down"

Jim Zemlin of the Linux Foundation wrote about the patent lawsuit filed by Microsoft, urging Linux fans to"calm down."

"Right now the Microsoft claim against Tom Tom is a private dispute between those two entities concerning GPS mapping software. We do not feel assumptions should be made about the scope or facts of this case and its inclusion, if any, of Linux-related technology. Any patent litigator will tell you that the path between asserting a claim under a patent and an actual, final determination that the patent is (1)valid and (2) that the claims of the patent are actually infringed is an extremely long road. If this case is in any way directed at Linux (in fact, Horacio Gutierrez, Microsoft’s corporate vice president and deputy general counsel of Intellectual Property and Licensing, has specifically stated that it isn’t), the Linux ecosystem has enormously sophisticated resources available to assist in the defense of any claim that is made against Linux."

HP, Google welcome Patent Reform 2009

The following is a statement from Michael J. Holston, HP general counsel and executive vice president: 

“HP welcomes today’s introduction of patent reform legislation in the House and Senate, and thanks Senators Patrick Leahy and Orrin Hatch and Congressmen John Conyers and Lamar Smith for championing improvements in our country’s patent system. 

“As one of the nation’s largest patent holders – HP is on average granted four U.S. patents every day – HP is a constant target of frivolous patent lawsuits. These lawsuits force HP to divert resources away from innovation and product development, leading to reduced economic benefits from invention. Reforming the patent system will reduce costly litigation and free up valuable resources for research and development. 

“Throughout our nation’s history, innovation has been a key factor in shaping and strengthening the economy. We encourage Congress to pass patent reform legislation this year so that innovators and businesses can aid the process of economic recovery.” 

The following is a posting  by Michelle Lee, Head of Patents and Patent Strategy at Google.

After the last time I blogged about patent reform in late 2007, the House went on to approve the Patent Reform Act. The bill unfortunately got bogged down in the Senate the following year. Since then the problems of the current system — and the need for reform — have only grown.

Consider this: Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.” Most of these cases seem to feature the same small set of contingent fee plaintiff's lawyers asserting patent claims against the same small set of companies. We've also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.

Unfortunately, the temptations and opportunities for abuse have gotten too high. Lawyers and plaintiffs have seen the potentially huge payoffs available in patent litigation. Before 1990, there had been just one patent damage award of over $100 million. Since 1990, there have been at least 15, with at least five topping $500 million.

That's why I'm excited that patent reform legislation is slated to be reintroduced today by Senators Patrick Leahy and Orrin Hatch and Representatives John Conyers and Lamar Smith. Once a driver of creativity, our patent system now poses a hurdle for innovation. All too often, Google and other companies face mounting legal costs to defend against questionable patent claims from speculators gaming the system to reap windfall profits. And those lawsuits make it more difficult and costly to introduce the next revolutionary product.

I wrote a bit last Congress about the reform provisions that Google cares the most about. The most pressing of those is ensuring fair damage awards. The current system too easily allows damages to be assessed based on the value of the whole product often containing many features — not just the value of the innovation of the allegedly infringed patent — which means the threat of potentially massive awards forces defendants to settle. Balance should be restored by requiring damages to be based on the value of the innovation's contribution to the product.

As members of the Coalition for Patent Fairness, we're optimistic that patent reform faces better odds in 2009 than it has before — not least because President Obama has pledged his support. Passage of patent reform is long overdue.

Patent Reform 2009 highlights

Proposed changes in the Senate Bill include:

First to File: Moving to a first-to-file system that credits invention based on the filing date of the patent application rather than on the date of actual invention.

Oath: Easing the rules to more easily allow rights-holders to file patent applications on behalf of the inventor.

Damages: Must look to the invention’s “specific contribution over the prior art” to determine damages. There is an interesting provision that a reasonable royalty may be calculated as the price of licensing a “similar noninfringing substitute in the relative market.” In some cases, this could push damages to zero if the noninfringing substitute is in the public domain.  The provision also codifies that treble damages are limited to instances where a judge finds that an adjudged infringer recklessly continued to infringe after receiving particularly specified written notice sufficient to create declaratory judgment jurisdiction and without relying on reasonable advise of counsel.

Expanded Reexamination Proceedings: Reexaminations may be requested based on published prior art, or evidence of prior public use or sale. Inter Partes reexaminations would begin to look more like court cases and would be heard by administrative patent judges.

Additional Post Grant Review: Within 12 months of issuance, a third party can file a cancellation petition based on any ground of invalidity (rather than simply prior art).  The post grant reviews would also be conducted by the administrative patent judges.

Expanded Estoppel: The Bill would clarify that parties would be estopped from filing inter partes reexamination requests after a district court judgement.

Administrative Patent Judges: The BPAI would become the Patent Trial and Appeal Board (PTAB).  Interferences would be gone, however they would be replaced by derivation proceedings as well as reexamination and post-grant trials.

PTO Powers: The PTO has power to set its fees, including reducing fees.

Federal Circuit Judges: Making it for a Federal Circuit judge to move more than 50 miles from DC.

InsideSales.com PowerDialer patent issued

InsideSales.com is most known as the inventor of the first hosted dialer technology built into lead management CRM solutions and designed specifically for business-to-business (B2B) companies. InsideSales.com is also known for its award-winning PowerDialer™ for Salesforce.com that embeds its flagship phone dialer software into the world's leading CRM solution.

InsideSales.com also pioneered the concept and technology behind lead response management or immediate callback of web-based leads in conjunction with ground-breaking research done with Kellogg School of Management at Northwestern University and the Sloan School of Management at MIT.

About InsideSales.com

InsideSales.com is the leading provider for on-demand technologies specifically designed for inside sales and lead generation. InsideSales.com avidly promotes Power Dialers as alternatives over Predictive Dialer technologies for increased net sales results. InsideSales combines telephony 'Power Tools' with marketing automation software to be put into the hands of sales teams. InsideSales.com integrates with Salesforce.com and has clients like Omniture, Dun & Bradstreet and many of the largest online insurance, mortgage, and education providers.

Acacia Research Corp patent licensing revenue up $18.3 million

Acacia Research fourth quarter 2008 revenues were $18.3 million compared to $12 million in the year ago period. This was our second highest revenue quarter to-date. During the fourth quarter, Acacia generated revenues from 20 new licensing agreements covering 15 different technologies, including initial revenues from five new licensing agreements.

Acacia started generating revenues from 20 new licensing programs in 2008 and have begun generating revenues from 48 licensing programs by the end of the year, up 71% compared to 20 licensing programs at the end of the prior year.

Read more...

Judge orders Hynix Rambus to Negotiate License

From Bloomberg:

Hynix Semiconductor Inc. and Rambus Inc. will meet in Seoul, South Korea, next month to negotiate the terms of a court-ordered license of Rambus’s designs for dynamic random-access memory chips.

U.S. District Judge Ronald Whyte today ordered the companies to submit a “proposed form” of the license to his court in San Jose, California, by Feb. 27, and to file a detailed agreement to the court by March 9.

The order stems from Whyte’s ruling yesterday ordering Ichon, South Korea-based Hynix, the world’s second-largest maker of computer-memory chips, to pay additional damages on top of a $133.4 million award it must pay to Rambus in a patent infringement lawsuit. Hynix has said it will appeal several rulings in the case.

Rambus, based in Los Altos, California, is a designer and licensor of chips used in such products as Sony Corp.’s PlayStation video game.

Hynix’s sales from Dec. 31, 2005, to Jan. 31, 2009, will be subject to royalties of 1 percent for SDRAM chips and 4.25 percent for double-data rate chips, according to the ruling.

2009 Sale Royalties

For sales of chips after Jan. 31, Hynix must pay royalties governed by the license to be negotiated in Seoul, Whyte wrote.

“If the parties have not reached a complete agreement as to the terms of a compulsory license, the parties shall submit a short statement of their positions regarding any remaining disputed issues,” Whyte wrote in his order. If required, a hearing will be held March 17, Whyte wrote.