More legal trouble for Apple with WiLAN patent claim


It seems Apple (s aapl) can’t even go a full week without being targeted with a new patent violation claim. Friday, patent-holding firm WiLAN (s wiln), which does little beyond seek licensing fees for its 800 wireless tech patents, announced that it had begun the process of litigation against Apple, as well as Dell (s dell), HP (s hpq) and others, for infringing on two of its patents related to CDMA, HSPA, Wi-Fi and LTE technologies.

WiLAN filed its claim with the U.S. District Court for the Eastern District of Texas, which is generally a go-to court for patent claims because it has a track record of favoring plaintiffs, with 88 percent of rulings siding with those laying claims, vs. a nationwide average of only 68 percent. WiLAN, an Ottawa, Ontario-based company will employ the services of McKool Smith, one of the best U.S. intellectual property law firms, and one with ample experience arguing cases in East Texas.

WiLAN has a history of pursuing claims against Apple, including in a suit related to Wi-Fi tech in 2007, and in a 2010 case over Bluetooth. Some companies have settled with WiLAN in these cases, Intel (s intc) among them, but otherwise, they remain ongoing. Most recently, it was in the news for its ongoing attempts to acquire another patent-holding firm, MOSAID, through a hostile takeover bid. MOSAID has recently added more than 2,000 patents to its portfolio in a deal with Nokia (s nok).

Typically, companies like WiLAN just want to extract licensing fees from the companies involved in the suit, so you seldom see an actual verdict in these cases. You can see why, in the face of constant attacks from companies like WiLAN, Openwave (s opwv) and Lodsys that Apple and others would want to build deep patent portfolios. There’s also the motive of being able to hamstring your closest competitors through patent litigation, of course.


Dilip Andrade

Suits from non practicing entities (NPEs being a more general term than troll) are not the reason that Apple is trying to bulk up its portfolio.

Apple is bulking up its patent portfolio for both offensive and defensive purposes, but the defensive purposes are only applicable to competitors with patent portfolios that would be interested in a cross-license agreement.

A company like WiLAN doesn’t make anything, and thus has no interest in cross licensing anything, so Apple’s portfolio is not a threat to them. This is why NPE’s are considered so dangerous in the space. They are always looking to strike a deal, but as long as they are certain that they will win, they can hold out for the price that they want without fear of this breaking their business.

Matt Liotta

That is mostly correct. Remember that any NPE that has a decent shot against Apple is valuable as an acquisition to a number of companies including Google, Samsung, HTC, etc. NPEs that can sue Apple, need to do so to raise their valuation given current market trends.

Paul Sullivan

While it is true that WiLAN’s primary source of revenue today is from technology licensing, no one should consider them to be “patent trolling”.

Those familiar with WiLAN’s history will acknowledge that the founder, Hatim Zaghloul, was immensely focused on wireless innovation, and the development (and protection) of disruptive technologies. He was renowned for his passion and enthusiasm (think obsession) in creating new directions in wireless. Significant investments in R&D did not, however, translate into success in the market. Lots of blame to go around – operational execution, timing, location… The one thing that can’t be argued is that this company positioned themselves as a technology innovator, having directed substantial resources towards innovation.

WiLAN did not go out to the market and scoop obscure patents from distressed or defunct businesses. It filed for protection of the intellectual property it created as part of its vision to lead the wireless industry. And its shareholders should expect the company’s management to find ways to unlock the value of the assets they own.

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