Recent changes to US Patent laws (ala H.R. 1249, the America Invents Act) demonstrated an apparent congressional preference for more complexity in industry-wide patent licensing. As pointed out previously on Gametime IP (See The Patent Lawyer’s ‘Jobs Bill’ May Become Law This Week), patent owners frequently grouped infringers together when resorting to litigation for efficiency, but H.R. 1249 put an immediate end to the practice. An astute commenter noticed the obviously inevitable result, suggesting that future litigation would result in:
Instead of, for example, one lawsuit with 20 defendants, this bill should likely result in 20 lawsuits with one defendant in each case.
This week, German outfit Beacon Navigation Gmbh filed the first major case(s) since enactment of the AIA. Specifically, Beacon simultaneously filed 37 different lawsuits in Delaware’s Federal court. The patented technology relates to GPS navigation, allegedly practiced by the entire automotive industry. For example, one of the older patents appears to be 5,878,368–dating back to the mid 1990’s–covering a navigation system that factors in the a user-definable “cost” of a road trip. From Claim 1 of the ‘368:
A navigation system comprising:
a database of road segments to be travelled by a user, said database including a cost associated with each said road segment;
a system for selecting a beginning point relative to said database of roads;
a user input device for selecting a desired destination relative to said database of roads, said user input device manually selecting at least one of said road segments and adjusting said cost of said at least one selected road segment; and
a system for determining a route from said database of roads between said beginning point and said desired destination based upon said adjusted cost of said selected at least one road segment.
The Beacon portfolio originated with the GPS company Magellan, which was acquired in for almost $100M by Mitac. In 2011, Mitac assigned the patents to Beacon Navigation, Inc., which then transferred them to the German limited liability entity at the end of September. Some of the patents date back to Magellan’s 1997 acquisition of Rockwell Collins‘ navigation division. Beacon brought all of its lawsuits in the same district, so keeping everything organized and consistent should be a little easier. For the court’s part, consolidating as much of the pre-trial proceedings as possible should be expected
Also filed this week was a new series of patent cases by Patent Harbor, owners of US Patent 5,684,514. In total, 8 separate lawsuits were filed against film producers like Warner Brothers, Lions Gate and Disney Enterprises as a result of information Patent Harbor learned in a previous lawsuit. While the logical thing might have been to add all of these parties to that existing case, the new law presumably prevents that as well.
Getting back to Beacon, I am curious about Beacon’s overall litigation strategy. In large multi-party lawsuits, the patent owner typically wants to rapidly narrow the case down to only a few defendants. The companies that respond quickly, are able to resolve the dispute quickly and on more favorable terms than those lagging behind. While this prevents the patent owner from maximizing individual value as to each infringing company, the speed and efficiency of the multi-party process typically presents a beneficial trade-off.
However, after prohibition of the multi-party case, I wonder if patent owners will return to more of a in seriatim process, where patent owners pursue litigation one company at a time, perhaps in different parts of the country. This strategy takes more patience, but offers the chance at a higher total return, not to mention the opinions of various courts and judges as to the patent’s scope and value. Obviously, Beacon has chosen the former strategy, but given the changes to litigation procedure under the AIA, I wonder if it’s the right one.