The Google deal to buy Waze — reportedly for $1.1 billion — is a strong move for both companies to enhance their respective mapping services, and to help monetize them better. But it could also serve as the tipping point for Nokia to turn the screws on getting Google to take licenses for certain mapping patents that it owns, or else face legal consequences.
According to a source familiar with the situation, Nokia has been eyeing up taking legal action against the search, mobile (and mapping) giant for a while now, and the Waze deal could be the tipping point for that to finally happen.
“Nokia has held off on a suit against Nokia for Google Maps for several years just waiting for the right time to approach with an overall suit covering Android and Maps,” our source says. The right time, it seems, could be based on two patents owned by Nokia, 7,628,704 and its extension, 8,070,608, along with a possible third, 7,092,964, which is more related to location-based mobile advertising. Nokia has more than 9,000 patents both filed and granted in the area of spatial relationships (some covering software, some hardware).
On the first of these, the ’704, our source notes that this specific patent covers Waze directly, in relation to the fundamental technology behind encouraging users to collect spatial data without paying them via money, with a specific call-out for games. “This is at the core of Waze,” the source says.
“It is very likely that they would file on the spatial data side against Google,” our source added. “The Google Maps and Maps API only impacted them somewhat because of what Microsoft, Garmin, Samsung and so many others pay but Waze likely pushed it too far from a risk standpoint.”
The ’704 patent was first filed in 2006 and granted in 2009. From the abstract, it looks like it was conceived for gaming first, and location tracking second:
A method is disclosed for collecting geographic data during game play. A game scenario includes an activity for the game player to perform. The game player may be given an incentive within the context of the game for performing the activity. The incentive may be of non-monetary, monetary or in-game value. Performing the activity within the context of the game directly or indirectly results in the generation of data that is collected and used for the purpose of updating, adding to or supplementing a geographic database.
The patent and the related patents all come from a trove that Nokia picked up as part of its $8 billion acquisition of Navteq, which forms the basis now of its here mapping division.
That division is still loss-making, but has also been highlighted as a core part of Nokia’s mobile strategy. That is both for their own devices now running on Microsoft’s Windows Phone OS, and as a way of moving in as a third-party player for IP for other mobile companies. After losing its position as the world’s biggest phone maker after the rise of Apple’s iPhone, Android and a number of strong handset makers (like current world leader Samsung) that have built devices on Google’s OS, maps are arguably one of Nokia’s strongest products.
On another track for revenue generation, CEO Stephen Elop has noted that Nokia will make $653 million in patent licensing revenues this year, and it is “watching closely” for more targets.
One of the lead inventors named on the patent, Kurt Uhlir, ran Navteq’s skunkworks for years, along with board-level projects. His patents are used for a number of video games including Flight Simulator X from Microsoft (going back to the gaming element of these patents).
Nokia does not details of all its patent licensing deals, but Facebook, Foursquare, Garmin and Motorola are among those who are believed to have already licensed the ’704 and related patents, some possibly in connection with licensing mapping data or in exchange for providing other data to Nokia.
As you can see from this SEC request to Apple for details of its patent licensing settlement with Nokia, the exact terms of what licenses get granted to whom are not required to be made public (and that, by default, could raise questions of whether Apple also has access to this patent). Another company that could fall into that category is TeleAtlas, now owned by TomTom (which provides some data to Apple for its mapping product), which also settled with Navteq over patents (but also sued it for antitrust violations).
Asked for a response, Nokia would not confirm anything to TechCrunch. “We don’t comment on our legal strategy,” a spokesperson said. “We also don’t discuss whether we may or may not have been in talks with other companies. But, as a long term innovator in this industry, and with a portfolio of around 10,000 patent families, it should be no surprise that we have a number of patents for leading edge technologies.”
SAP, the enterprise software behemoth dealt a $345 million penalty in a patent case brought by Versata, has been given a window of opportunity in getting that case overturned, thanks to new rules in the America Invents Act concerning business method patents — used to describe certain processes, which may be years old but then get enforced with what some believe are too-wide interpretations. SAP is the very first company to test out the new rules, which are some of the most significant reforms to the patent industry in years and could potentially help turn around a system that has been much abused in the tech industry by both patent trolls but also legit companies.
Yesterday, however, SAP claimed a victory at the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board over a business method patent around dynamic pricing technology, which Versata claims SAP infringed: the PTAB has now decided that that patent, number 6,553,350 (’350), is unpatentable. This is the very first case to be tried under the new rules — SAP literally filed its appeal the day the Act was approved in September 2012 — and the success of striking down this particular business method patent could set a precedent for other companies opposing other patents based on the business methods.
This, we understand, is just the first step for SAP in turning things around. The USPTO is still considering whether to reexamine the patentability of Versata’s ’350 patent in a separate ex parte reexamination proceeding based on prior art, Arner notes. And then comes the much bigger issue: whether SAP will be able to use these rulings to overturn the damages awarded to Versata. That case, before the Court of Appeals for the Federal Circuit Court, is still pending.
The full decision is embedded below, but the background to this particular case centers around the ’350 patent. The case was first filed in 2007 by Versata, which claimed that software that it had created, and patented, to price items based on purchaser and other parameters, was effectively ripped off by SAP. Versata’s claim was that it had a thriving market for this software; then when much-bigger SAP started to offer the same, business collapsed. From its litigation site:
After several stages of the case, with increasing fees levelled against SAP, the final ruling in May was for SAP to pay $345 million in damages.
That was, however, before this secondary appeal got lodged and seen by the PTAB. Erika Arner, a partner at IP law firm Finnegan, representing SAP, notes that the PTAB had decided that the ideas described in the patent were too abstract and general, and without “enough significant meaningful limitations to transform these abstract ideas into patent-eligible applications.” The PTAB, in fact, ruled all of Versata’s challenged claims unpatentable and therefore cancelled.
Business method patents are obviously not just the terrain of older companies, nor of trolls hoping to cash in on an existing, active company’s fortunes. Amazon, for example, owns a business method patent on the One-Click shopping cart.
The rules, however, will make it easier for companies who are on the receiving end of those suits to formally question whether they are too abstract and therefore unpatentable. There are other efforts being made to also help form more useful patent methodology, such as the combined effort of StackExchange and the USTPO to crowdsource prior art that can be used to determine the validity of patents.
Last year, Twitter announced something it called the Innovator’s Patent Agreement (IPA), which would keep patents in the hands of the designers and engineers that came up with the technology behind them. What this agreement serves as is a promise to only act on a patent for “defensive purposes.” Anything outside of that scope would need to be signed off on the creator of the patent itself.
Here’s how Twitter defines “defensive purposes”: “Defensive purposes means that you can defend yourself should another party try to initiate patent litigation against you or your customers or users. Under the IPA, it also means that you can use these patents against anyone who has sued others offensively in the past (up to ten years).”
The first patent to get the IPA treatment is Loren Brichter’s pull to refresh user interface interaction, which was built into Tweetie, the Twitter app that was acquired by the company and adopted as the official client.
Basically, Twitter is saying it’s not going to go after companies that are using pull to refresh, or other parts of Brichter’s patent, within their app. If someone were to claim to have created the functionality first, only then would Twitter defend itself.
Twitter has also announced that two other companies, Biz Stone’s Jelly and the Lift task tracking app, will also be adopting the Innovator’s Patent Agreement. With so many ideas running around, there should be no reason why the first person to successfully file a patent should hold the power to make everyone’s lives miserable. At the end of the day, all companies benefitted from Brichter’s work, and it’s been nice to see Twitter not going after anyone else for replicating parts of it.
When the IPA was announced last year, Twitter VP of Engineering Adam Messinger had this to say:
This is a significant departure from the current state of affairs in the industry. Typically, engineers and designers sign an agreement with their company that irrevocably gives that company any patents filed related to the employee’s work. The company then has control over the patents and can use them however they want, which may include selling them to others who can also use them however they want. With the IPA, employees can be assured that their patents will be used only as a shield rather than as a weapon.
Using patents as a shield will hopefully slow down the rampant patent trolling that has plagued the technology space for the past ten years. Twitter, Jelly and Lift promise not to be trolls, and that’s a good thing.
You can read the full IPA draft here to see if it’s something your company would want to adopt.
[Photo credit: Flickr]
Companies like Google, BlackBerry, Earthlink, Red Hat, and others in the tech community, have been piling pressure on the U.S. government to take a stronger stand against companies that file patent suits but don’t actually make any products themselves — known formally as “patent assertion entities” but more commonly as patent trolls and patent privateers (a term favored by Google). Now someone in government is responding. Today, U.S. Sen. Charles Schumer (D-NY) is expected to announce legislation that looks to snuff out patent suits brought by these companies in their early stages, by sending the suits to the U.S. Patent and Trademark Office for vetting before they hit the courts.
This could not only help snuff out bogus suits, but it could also highlight which patents may be bogus as well, creating a framework for preventing their use in subsequent suits.
Patent trolling is a lucrative business, and they are even costlier when including extra business like legal costs: in a recent document submitted to the Department of Justice and the Federal Trade Commission, Google, BlackBerry, Earthlink and Red Hat estimated that patents abused for financial gain cost U.S. companies alone nearly $30 billion in 2011, “and $80 billion when accounting for all costs — direct and indirect.” The average patent settlement reached by PEEs can cost a small or medium company $1.33 million, while an in-court defense would cost the same company an average of $1.75 million per case.
Senator Schumer’s bill will address exactly that latter aspect of the issue, around the prosecution system. The announcement was made while Schumer was in his home state of New York, and it will get introduced formally next week, when Congress is comes back in session starting May 6.
In a phone interview with TechCrunch, Senator Schumer says the impetus for the bill came from feedback he was getting from the tech community “from one end to the other”:
“From large companies like Google to the smaller startups, this is one of the major barriers to business across the country,” he said. “Fred Wilson alerted me to how it especially hurts startups as well. Several small companies that have been put out of business. When asked by people about what I can do to help the tech industry, the top two things they ask me about is immigration reform and this. I’m working on both.”
What’s interesting is that the bill proposes a new process by which all patent cases will get vetted by the USPTO — not just the “extortion” (his word) brought by trolls. “This will apple to all patent cases, but if you have a legitimate case it will go forward in a month. It just eliminates all the frivolous suits. We think it’s the best solution.”
There are other solutions being suggested for how to deal with the overrun tech patent lawsuit situation. Another suggestion has been for the losers in the cases to cover legal costs for both parties. The idea is that this would be a deterrent for those looking just for a financial return, but Schumer said he believes this would get quashed by the trial lawyer lobby.
“Even if you have to pick up the court costs, you might still be scared into settling because it could take years before a court makes a determination,” he noted. “We would have it before it goes to court and discovery stage.”
This bill is a variation on another piece of legislation that Schumer pushed through Congress successfully in 2011. That update, called the Schumer-Kyl program, was to the America Invents Act and specifically concerned patents in the financial services industry. So far the USPTO has examined some 20 patent cases as part of that patent review program.
But tech patent trolling is a much bigger issue in terms of numbers, says Schumer. Some 62% of patents asserted by trolls from 1990-2010 were software patents; 75% were in computer and communications technology. The case brought by Lodsys against dozens of app developers is typical of how many of these suits run, it appears: some 82% of companies targeted by trolls have annual revenues of less than $100 million.
The USPTO published a number of Apple patent applications Tuesday, including two related to automobiles (via AppleInsider). The car patents both describe systems that can be built into future iPhones, replacing most of the functionality of your standard key fob with the smartphone, and providing a way to help drivers navigate the often maze-like interiors of parking garages to find their ride.
In one application, Apple describes what amounts to a series of different indoor positioning systems to help drivers locate their cars when parked. The system would involve pairing a car and an iPhone via Bluetooth, and then using that connection to automatically detect when a car ends up actually parking in a spot. Then, it uses sensor data communicated from the parking facility itself to peg a location.
Once a user returns to the garage, they can trigger the phone to find their current positioning data from the same system, and then provide actual guidance or directions back to their car itself. The patent describes parking garages in which devices are placed at regular intervals throughout to help facilitate the indoor location portion. Apple’s recent acquisition of indoor positioning system company WiFiSLAM could also work very well in terms of helping provide a way to make this system work.
The IPS element is interesting, but where Apple’s patent is really unique is in using on-board device sensors, including things like the camera and microphone, to determine automatically when a car parks to begin with to trigger the car location logging information. There are plenty of “where did I park my car” apps out there (though few boast IPS), but the automatic, fully-integrated way Apple’s system would work would make it so that you don’t even have to remember to activate it.
The other car-related application describes a system that would turn the iPhone into a remote car starter, unlocker, and essentially a parental control device for a target vehicle. The patent talks about using Bluetooth to pair a car and a handset, then allowing a user to choose their level of security, making it possible to have the phone unlock the car automatically based on proximity, or require a PIN to even use any car control functions.
Apple’s patent goes further than most remote starter/unlocker key fobs by allowing a user to set specific limits for particular devices, like making it possible to start the engine with a phone only during set hours, setting a max speed for use with a particular device, limiting access to infotainment services, and building in geofencing. All of these can be used in theft prevention, but also to set limits on say a teen child’s car permissions.
It’s about time that cars got tighter integration with mobile devices, in ways that make the best use of all the tech on board our modern smartphones. Many car companies seem to be open to working closer with Apple, too, so while there’s a lot of infrastructure changes described in these patents, we still could see these features make their way to shipping devices over the next few years.