Europe must avoid the distortions of the US patent debate
A recent sponsored editorial piece about PAEs and NPEs by Maryland-based Unified Patents, published on the Juve Patent platform, contained mischaracterisations of Sisvel and others. It is time to push back against such content
By Joff Wild
Words matter.
Spending time thinking carefully about which words to use and how to deploy them can make the difference between a compelling narrative or argument and one that is easily ignored. Nobody knows this better than lawyers and journalists.
In both professions, being able to choose the right words is a valuable skill. It is also one that should be deployed with care. Failing to do this may gain attention but also runs the risk of distorting reality and creating a false impression. That may serve specific agendas but not the common good.
This is why it was so disappointing to read Jess Marks of Unified Patents mischaracterise Sisvel as a patent assertion entity (PAE) in a sponsored article published by JUVE Patent in June. "The term patent assertion entity is used in this article to refer to entities that are commonly referred to as patent trolls, e.g., for-profit companies whose business is the acquisition and assertion of patent assets to collect fees from operating companies that allegedly infringe those patents," Marks wrote.
The piece not only misrepresents Sisvel but, in so doing, demeans the valuable contribution that patent pools make to technology markets, as well as the growing number of innovative businesses that make their patents available for license through pools.
To be clear, Sisvel's primary business is not, as Marks claims, "the acquisition and assertion of patent assets to collect fees from operating companies". Instead, it is the creation and management of patent pools. Even a cursory examination of what we do and how we generate the vast majority of our income would confirm this.
We currently run 14 licensing programmes, encompassing mobile, IoT, Wi-Fi, audio and video coding, and digital video broadcasting. We also have a number of legacy programmes either closed or reaching the end of their lifecycles. Since Sisvel’s foundation in 1982, we have returned billions of euros in royalties to our licensor partners.
The reality is that we work with hundreds of innovative companies, that create and implement world class technologies, to develop flexible, market-based licensing programmes. These iron out complexities and deliver business efficiencies, while operating to the very highest standards of transparency.
Such a business model enables brilliant new products to reach consumers more quickly and at lower prices than would otherwise be the case. It also ensures fair compensation for innovators who can then use the royalties our pools generate to reinvest in further R&D. Everybody wins.
Yes, Sisvel acquires patents. We do so unapologetically to integrate them into our pools. This enhances the efficiency and effectiveness of our “one stop shopping” proposition for both licensors and licensees. Patent assets on the secondary market Sisvel does not acquire remain available for others, such as Unified Patents, to purchase. Of course, their business models may not be the same as ours.
Europe is not troll friendly
Words matter.
On its website, Unified Patents states that it deters “Non Practicing Entities (NPEs) who assert bad patents (aka Patent Trolls)”. Note how that definition of “trolls” – NPEs “who assert bad patents” – is markedly different from the definition provided in the Juve article: “For-profit companies whose business is the acquisition and assertion of patent assets to collect fees from operating companies that allegedly infringe those patents.” In the latter, there is no mention of quality. Why? Perhaps it is because the European patent litigation system is very different to the one in the US.
It is much more expensive and time consuming to litigate patents in the US than it is in Europe. There is also no loser pays regime. This creates the conditions that make it possible to acquire and then assert generally poor-quality assets in the hope of securing multiple low value settlements from defendants that lack the resources or the inclination to spend a higher sum they know they are not going to recoup. Europe, with loser pays, lower litigation costs, expert judges, no juries and quicker times to trial is a very different proposition.
Claiming that US-style “trolls” are a growing problem in Europe, as the Unified Patents article does, but using a definition of troll that is very different to the one you use in the US is an act of bad faith. In and of itself the change in definition is an acknowledgement that US-style “trolls” cannot function successfully in Europe. It is a point we have made previously on Sisvel Insights.
It follows that if the business model deployed by US-style “trolls” is not feasible in Europe, reforms to patent litigation practice and procedure designed to deter them are not necessary. The status quo provides all the deterrent required. Obviously, if you want to change the status quo for other reasons – but see the creation of a “troll” narrative as a way to do this - that is an inconvenient truth.
The sin of omission
Words matter.
Sometimes it’s not what you do say that’s revealing, it’s what you choose not to say. For example, in her article, Marks claims that InterDigital seeks “to acquire a large set of patents to leverage in licensing deals, recently acquiring Technicolor’s patent licensing business in 2019”. It has also been involved in several connectivity-related patent disputes since that time, she observes. What Marks does not mention is that InterDigital actually purchased Technicolor’s research and innovation (R&I) business five years ago. The press release the firm put out at the time states:
The acquisition brings InterDigital’s research team to approximately 340 engineers in eight R&D offices worldwide, and expands the company’s research capabilities beyond its core wireless base into video, augmented reality, immersive content, artificial intelligence and other key areas. Through its relationship with Technicolor’s production services arm as a key customer, InterDigital also gains a direct link to the end-market in emerging technology areas.
Leaving the R&I element out of the InterDigital business proposition creates a false impression about what it does and fails to acknowledge the firm is an innovator with significant research facilities in France, as well as other countries. Draw your own conclusions as to why anyone would want to omit such information in an article based on the premise that more US-style “trolls” are coming to Europe.
Not the US
Words matter
Unified Patents has its HQ in Chevy Chase, Maryland. On its website it also lists an office in Silicon Valley. It does not provide an address for Europe.
Sisvel acknowledges Unified Patents is free to pursue its agenda and service its client base as it sees fit. However, as a proudly European firm, we believe discussion around patents on this side of the Atlantic is best served by the transparent supply of as much information as possible - not its partial provision. Neither should there be any place for distorting reality or leaving out difficult facts.
Importing the damaging patent debate that has been dominated by deep pocket corporations in the US for the last decade and a half is something we should avoid in Europe. Rights owners here and the businesses that implement their inventions, as well as the wider public interest, deserve a whole lot better than that.
On a personal level, as a long-time editor, I understand that the Unified Patents article Juve published was “sponsored” content and that there is a difference between this and copy generated by in-house reporters. However, I can’t help thinking that at least a level of editorial rigour should have been applied before this piece was released for public consumption. Other platforms do it. Juve should too.
Joff Wild is Head of Content and Strategic Communications at Sisvel.