Last week, I issued the following challenge:
Walker Digital was at the forefront of the most aggressive patent assertion effort ever to be attempted. (That’s not hyperbole. I challenge anyone to find an instance where a patent owner asserted more patents against more companies in a comparable period of time).
via Does The New Patent Licensing Regime Look Like The Old Patent Licensing Regime? (emphasis added)
Gametime IP reader Jerry Hosier stepped up to this challenge offered up the storied inventor Jerome Lemelson, and the licensing campaign involving his “machine vision” patents, including U.S. Patent Nos. 4,338,626, 4,511,918, 4,979,029, 4,984,073, 5,023,714, 5,067,012, 5,119,190, 5,119,205, 5,128,753, 5,249,045, 5,283,641 and 5,351,078. This campaign included patents like U.S. Patent Nos. 4,969,038, 5,119,205, 5,128,753, and 5,144,421 related to “automatic identification” (a subset of the machine vision patents) and U.S. Patent Nos. 5,039,836 and 4,390,586 relevant to the semiconductor industry. (You can view all of these patents here.)
This licensing campaign kicked off in November 1989 with letters being distributed to well over 200 companies, including the top electronics, semiconductor and automotive companies of the time. Within two years, many foreign companies were asking for licensing terms that would cover the entire Lemelson portfolio, and before the end of ’92 licensing revenue from the campaign was approaching half a billion dollars from over 40 licensees.
The first lawsuits were initiated in late 1992 and early 1993 against eight companies, with subsequent rounds following in 1998, ’99, 2000 and 2001 against the likes of Intel, Lucent, Alcon, CompUSA (obviously a much bigger retail player at the time), and Broadcom. A key moment came in June of 1998 when the storied “Big 3” automakers simultaneously settled their pending litigation. This proved to be a tipping point as it later became fashionable for American companies to do business with Lemelson.
A significant number of Lemelson’s patents stemmed from a 150 page patent application he filed on Christmas Eve in 1954, after conceiving of a way to design machines that could “see,” process information and handle numerous automated manufacturing tasks. Various continuations and continuations-in-part relying on this original specification issued between the 1960’s through the 21st Century. Lemelson is often accused of manipulating patent office rules in order to extend prosecution of his patents, thereby “lengthening” his patent term.
However, other reports suggest that Lemelson’s original 1954 application was subjected to an unprecedented 20-way restriction requirement. In other words, the patent examiner’s ordered Lemelson to pick from one of 20 distinct inventions, and forced him to apply for each invention separately! Practitioner’s know that restriction requirements are fairly common, with examiner’s asking inventors to elect between 2 or occasionally 3 different species of invention. But 20? Naturally, in the 1950’s, Lemelson was anything but wealthy, so he did the only thing he could afford to do, which was to prosecute these applications one at a time.
Others criticize Lemelson for not personally commercializing any of his inventions, but this is a dubious distinction. The very purpose for granting exclusionary rights to inventors is to allow those inventors to control the use of their inventions. The patent rewards the mental, not physical, labor of inventor with exclusionary rights to control implementation of the invention. How the inventor chooses to implement those rights is irrelevant to the value of the invention in the first place.
So is Jay Walker the next Jerome Lemelson? Like Jay Walker, Lemelson had also been compared to Thomas Edison, although Edison’s 1000+ patents significantly overshadows Lemelson’s 600+ and Walker’s 200+ (and counting). But unlike Lemelson, Walker has gained prominence as a businessman and entrepreneur prior to his more recent efforts at monetizing his IP. Lemelson essentially worked as a full-time inventor in the 1950’s and never looked back, despite having to wait until the 1970’s to see any significant return for his licensing efforts. And even then, it was not until the 1990’s, when he teamed up with Jerry Hosier that his licensing success really took off.
Lemelson’s litigation team was also much leaner than Walker’s is today. Walker Digital is represented by a combination of Russ, August & Kabat, Agility IP and SNR Denton. Lemelson had Jerry Hosier along with a handful of attorney’s and staff. Of course, after seeing the success Lemelson enjoyed, patent lawyers started to take more interest in contingent fee cases. Ray Niro worked with Jerry Hosier in the 90’s to license patented technology for Acacia, a company virtually unknown at the time, but today synonymous with monetizing patents. These days it seems like there’s a new contingent fee firm popping up every day, such as the Uniloc trial team that just left Mintz Levin to start their own IP boutique.
Although it might seem that way, this was not intended to be a post about Lemelson himself. As I continue to research, I’m finding his story to be quite compelling, and I’ll likely have more to say about him in future posts. Getting back to the topic, which was comparing Lemelson’s licensing campaign to Walker’s, there may ultimately be more differences than similarities. As far as which campaign is more “aggressive,” I think Walker’s involves more patents over a more diverse array of technologies, but Lemelson’s move was way ahead of its time.
Lemelson and Hosier also proved the simple fact that, with enough skill, strategy and perseverance, the little guys can beat the big guys, which opened the door to the competitive patent marketplace we see today.
- Has Jay Walker Rendered Intellectual Ventures Irrelevant? (gametimeip.com)
- Walker Digital Litigation: The Bruce Schneier Effect (And Other Miscellaneous Updates) (gametimeip.com)
- Does The New Patent Licensing Regime Look Like The Old Patent Licensing Regime? (gametimeip.com)
- Behind Walker Digital’s Velvet Glove Lies An Iron Fist (gametimeip.com)
- Patent Litigation Experiences K-T* Event? (gametimeip.com)