ParkerVision (NASDAQ:PRKR) won a $172M patent infringement verdict against Qualcomm (NASDAQ:QCOM) in fall 2013. The judge in that case has yet to finalize the judgment, after which it would proceed to appeal.
On June 12, 2014, RPX (NASDAQ: RPXC) and I jointly filed petitions to invalidate three of ParkerVision's patents - the 6,061,551 (IPR2014-00947 ), 6,266,518 (IPR2014-00946) and 6,370,371 (IPR2014-00948) patents. The petitions are available for free online here - click on "Direct Link" under the first heading (Patent Review Processing System, search for the IPR2014-xxxxx numbers above), or download them directly from here; updates will be added as the IPR process continues.
I cannot and will not speak for RPX, but I think it is worthwhile discussing these filings and what the significance of these petitions are for ParkerVision from my point of view.
Inter Partes Reviews (IPRs)
It is very important to realize that the Inter Partes Review (IPR) process was not available until fall 2012, so this was not an avenue that Qualcomm had available when ParkerVision filed the lawsuit in July 2011. Since there is a one year statutory bar to filing an IPR after the initiation of a lawsuit, Qualcomm was never eligible to use the IPR process against the patents asserted in the initial ParkerVision complaint.
RPX and I are both eligible to file these petitions under the rules of the America Invents Act (AIA) which created the IPR process.
The IPR Process
After the filing of an IPR petition, the patent owner is allowed to respond before the PTAB decides to grant or deny the petition. By statute, the PTAB must ordinarily grant or deny the petition after six months. The criteria are whether "one or more claims are more than likely to be found invalid, under anticipation or obviousness." If the petitions are accepted, then there is a 12-month process with limited discovery, expert reports, a hearing in front of three patent judges and a final decision. Thus, I expect a final decision by the end of 2015 (18 months after June 2014.)
Given the quality of the anticipating prior art we've found, I can't imagine that any of the challenged claims will survive this process. I encourage readers to review the petition and especially the expert's report. Our expert for these petitions is Prof. Asad Abidi, a well-known RF researcher and the author of many books and papers on the actual subject of these patents. His report is very well done, and clearly shows how ParkerVision's "ideas" are not new and in fact date back to the 1940s, if not earlier.
The statistics for invalidating patents via the IPR process is quite good (i.e., very bad for the patent owner!, see here). The process is laser-focused on the issues of invalidity based on patents and printed publications only, which means that misleading emails from 1999 are unlikely to be even considered and wildly wrong technical statements will be recognized as such. The case is heard by three patent judges who are "skilled in the art," so the process is about as good as it can get for reaching the technically right decision.
Defendants in other litigation may be able to rely on these IPRs and request a stay (here; here; here). Some courts have required defendants to agree to be bound by the IPR results, thus simplifying and possibly eliminating any eventual trial.
The Qualcomm case will continue, and after Judge Dalton's decision on the remaining JMOLs (invalidity and non-infringement) the case will go to appeal. If CAFC reverses Judge Dalton's or the jury's rulings (as seems quite likely), Qualcomm and ParkerVision would, at the very least, be headed for a new trial. Any second trial will most likely not occur until 2016. By that time, the current IPRs should be done in the PTAB and likely on appeal - by ParkerVision - to the CAFC and on their way to final disposition. If the CAFC affirms the PTAB's cancellation of the ParkerVision patent claims before a final judgment from the CAFC on the Qualcomm case, everything that has happened so far in the Middle District of Florida is basically moot. This outcome recently occurred in Fresenius v. Baxter Healthcare (see here).
ParkerVision has to live with arguments already made in front of Judge Dalton and the jury, and these arguments are technically wrong and inconsistent. Under the rules of an IPR, the claim terms are given the broadest reasonable interpretation (see here) in light of the specification. In general, ParkerVision asked for and received very broad definitions in the Florida litigation - which was necessary to make an infringement argument even plausible. The Markman decision (i.e., the court's claim interpretations) sets a lower limit to breadth of the claims as interpreted by the PTAB, which makes it crystal clear that the patents are invalid under prior art. Trying to change up and make different arguments in front of the PTAB will not fly. The standard for non-patentability before the PTAB is preponderance of evidence, not clear and convincing as in district court litigation; thus, the burden of proof is lower to invalidate for an IPR.
My guess is that ParkerVision's primary strategy in the IPRs will not focus on technical arguments, but will be to allege that Qualcomm is the actual real party in interest. However, I know this to be false because I have no economic or legal relationship with Qualcomm. Qualcomm did not request me to do this. Qualcomm has contributed nothing to me or to the process of generating these IPR filings, and Qualcomm is not a client of RPX, as was made clear in the petitions.
The Second Lawsuit Against Qualcomm and HTC
I believe that ParkerVision made a huge mistake in filing the second lawsuit. By law, Qualcomm has up to one year to file their own IPRs on the patents asserted in the second lawsuit. I don't know what Qualcomm will do, but it would seem quite likely that Qualcomm will file IPR petitions on the newly asserted patents and ask for a stay. I think it very likely that the stay would be granted and that the petitions would result in the invalidation of all of the claims of the asserted patents (look at the patent ParkerVision is asserting against Qualcomm's and HTC's baseband - all of the patents in the second lawsuit are invalid over prior art, but the protocol conversion patent is really bad).
Settlements or Additional Lawsuits Against Other Companies
Given the obvious invalidity of nearly all of ParkerVision's patents, my opinion is that no rational company will license them from ParkerVision under these circumstances - with or without the direct threat of a lawsuit. Even negotiating with ParkerVision has been shown to be a mistake, as any discussions would be used against them at trial. Anyone can read the Florida trial transcripts and see what happens to companies who negotiate in good faith with ParkerVision.
I said as early as 2005 (on the Yahoo Board and on pvnotes) that the ParkerVision D2D patents were invalid. I believe it even more strongly now after having spent many months working on these IPR petitions. I would be very surprised if any of the ParkerVision patent claims survive. I can't wait to see what ParkerVision will do for its next "business plan."
Disclosure: The author is short PRKR. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am long a small amount of QCOM. I have no position in RPXC.