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IP, IP Asset, Patent

Cisco Pays $36 M To License Acacia Patents Acquired From Philips, J2 And Two Start-ups

Last month, Acacia reported in its second quarter earnings that 72% of its revenue for, or $36 M, came from a single licensee.  (See A Tale Of 2 Quarters – Acacia Research Illustrates Patent Play Volatility).  During a telephone conversation with Paul Ryan, he explained that revenue concentrations can occur when companies license multiple Acacia portfolios in a single quarter, rather than spreading those licenses out over time.  In a later report, I summarized the inevitable conclusion from the information disclosed by Acacia in its reports:

Continuing, Ryan provides a timely example: “We did, in the last quarter, to certain companies, four or five licenses, and we got that all in one quarter as opposed to having it come in four different quarters.” Acacia issued a press release summarizing it’s earnings, and revealing that Cisco (CSCO) entered agreements with Acacia and some of its subsidiaries “to resolve pending patent matters,” including a list of four specific subsidiaries: Lambda Optical Solutions LLC, Teleconference Systems LLC, Video Streaming Solutions LLC, and Unified Messaging Solutions LLC. The revelation led to much speculation identifying Cisco as the likely company responsible for the $36 M revenue concentration. JPMorgan research analysts reportedly reached a similar conclusion.

(See Acacia CEO Paul Ryan Clarifies Second Quarter Results And ‘Key Performance Metrics’)

A look at the four portfolios licensed to Cisco reveals that each came from a very different source.  First, Cisco tangled with Teleconference Systems, LLC in a 2009 Declaratory Judgment suit filed in California over Patent no. 6,980,526.  The ‘526 patent is assigned to Margalla Communications, and co-invented by Margalla founder Saqib Jang.  According to Margalla’s website, Jang is “personally involved in all Margalla Ventures activities” which include “raising capital, due diligence, mergers & acquisitions, and venture capital advising.”  Curiously, those activities at one point led to Jang’s invention of a videoconferencing method:

1. A method for videoconferencing using Internet Protocol (IP), the method comprising the steps of:

installing a videoconferencing services switch at an access point to a service provider IP network;at the switch, registering a plurality of subscribers for videoconferencing services, each subscriber including a plurality of endpoints;

receiving subscriber-specific settings to be applied to multiple videoconferencing calls from the plurality of endpoints associated with each subscriber;storing the subscriber-specific settings at a location accessible to the switch; and

configuring the switch to connect calls from the plurality of endpoints at each subscriber based on the corresponding subscriber-specific settings.

Lambda Optical Solutions, LLC filed a Delaware lawsuit against Cisco and several other companies back in 2010 over Patent No. 6,973,229.  The patent was originally owned by First Wave Intelligent Optical Networks, Inc., and was reformed as Lambda Optical Systems following an acquisition by VC firm Sevin Rosen in 2003.  The first independent claim of the ‘229 Patent, which was confirmed during reexam, describes an optical switch:

1. An optical transport switching system for use in an optical network, comprising:

an optical access ingress subsystem which is adapted to receive an optical signal associated with an access network;an optical access egress subsystem;a transport ingress subsystem;

a transport egress subsystem; and

an optical switch subsystem which is adapted to ingress the optical signal into the optical network by optically coupling the optical access ingress subsystem to the transport egress subsystem and which is adapted to selectively provide optical coupling between the transport ingress subsystem and at least one of (1) the optical access egress subsystem, and (2) the transport egress subsystem.

Video Streaming Solutions LLC, filed suit in March of this year over 8 different patents originally owned by Philips, and sold to Acacia via one of Coller Capital‘s IP acquisition funds.  Included in the suit is Patent no. 6,157,673, which describes the de-multiplexing of data, and accused of being used in Cisco’s IP TV headend solutions.  Claim 17 from the ‘673 patent illustrates the application of a de-multiplexing for television programming data.

17. A method of decoding a plurality of transport streams comprising:

de-multiplexing data for at least one elementary stream corresponding to a program from a currently accessed first transport stream of said plurality of transport streams and decoding the de-multiplexed data;

during said de-multiplexing, accessing and extracting program specific information from a second transport stream of said plurality of transport streams, indicating a correspondence between packet ID numbers and data for programs in said second transport stream; and

using the extracted program specific information in an event of a channel change necessitating that data for at least one elementary data stream corresponding to a program in said second transport stream be de-multiplexed.

Finally, Unified Messaging Solutions, LLC, which acquired exclusive licensing rights to patents from J2 Global, was mentioned in Acacia’s press release despite no record of the company actively litigating against Cisco.  Unified Messaging has, however, actively litigated a number of patents originally acquired by J2 through an acquisition of Netoffice.  Included in the portfolio is Patent no. 6,857,074, describing a messaging platform accessed through a browser interface that notifies users of available messages.

1. A communications messaging platform, comprising:

at least one computerized server system programmed to implement:

a messaging function configured to receive messages and configured to place the messages in storage areas associated with respective mailboxes associated with respective intended recipients of the messages, the messages being of any one or media types selected from the group consisting of an audio media type, an image media type, and a data media type; and

a notification function configured to send notification messages to respective ones of the intended recipients after receipt of the messages, the notification messages alerting the respective ones of the intended recipients of the receipt and availability of the messages at their respective mailboxes,

wherein:

the messaging function is configured to interface with the intended recipients through a browser interface;

the intended recipients are capable of accessing their respective mailboxes and the messages associated therewith through the browser interface; and

the messaging function couples information associated with the messages to the respective intended recipients via the Internet.

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