by Dennis Crouch
Luxembourg based Core Wireless Licensing S.a.r.l. has sued Apple for patent infringement in the Eastern District of Texas. The recently filed complaint alleges that Apple’s communication devices such as iPads and iPhones infringe eight different Core Wireless patents. The Core Wireless family of patents focus primarily on communication protocols and the patent owner claims that the patents are infringed by any device that communicates using 2G, 3G, or 4G standards.
Core Wireless obtained its portfolio of 2,000 patents and pending applications from Nokia and (apparently) Microsoft. In 2011, the patent licensing entity MOSAID purchased Core Wireless. MOSAID itself is owned by the US private equity firm Sterling Partners.
The reported purchase price for Core Wireless (including its patents) was just under $20,000 — seemingly a very low price. However, there is a kicker, the sale requires that the new owner enforce the patents and 2/3 of any licensing revenue must be sent to Microsoft and Nokia. Further, the patent ownership rights are subject to a condition subsequent — if Core Wireless fails to meet minimum performance thresholds then the patent rights revert to the grantors (Nokia and Microsoft). The following comes from a 2011 press release by MOSAID:
Core Wireless will retain approximately one-third of gross royalties from future licensing and enforcement of the patents and will bear all of the costs associated with their administration, licensing, enforcement and monetization. Core Wireless’ ongoing ownership of the portfolio is subject to minimum future royalty milestones. The remaining 2/3 of gross royalties will be paid to Nokia and Microsoft Corporation (NASDAQ: MSFT).
One way to look at this is that MOSAID is essentially working as on a property management contract. With patents, title must shift in order to facilitate the necessary lawsuits. The complaint lists the following patents as infringed: 6,792,277, 7,606,910, 6,697,347, 7,447,181, 6,788,959, 7,529,271, 6,266,321, 6,978,143.
This case is also interesting in the context of Professor Schwartz’s article on Contingent Fee Patent Litigation. In a round-about way, Nokia and Microsoft have hired MOSAID on contingency fee to enforce their patent rights. The complaint itself was filed by Henry Bunsow of Dewey Leboeuf in San Francisco with Johnny Ward Jr. serving as local counsel in E.D. Texas. True to its role as hopeful licensor, the plaintiff has only asked for money damages and not injunctive relief to stop ongoing infringement.
Google Buys More Patents: Last fall, MOSAID sold a set of 18 patents and patent applications to Google for a reported $11 million. Recently, the pair recorded a new transaction of about 200 patents and applications from MOSAID to Google. Those patents were previously owned by the Italian tire manufacturer Pirelli and a spinoff company PGT-Photonics. Google also recently purchased one eCommerce patent from the tiny firm Alpine-in-Motion.