One of the oldest and most profitable patent trolls, Uniloc, has been shot down. Its US Patent No. 5,490,216, which claims to own the concept of "product activation" in software, had all claims ruled invalid by the Patent Trial and Appeal Board (PTAB).
The process through which PTAB eliminated the patent is called an "inter partes review," or IPR. The IPR process, created by the America Invents Act, is an increasingly popular and effective way for defendants to challenge patents outside federal courts.
The PTAB case against Uniloc's patent was filed by Sega of America, Ubisoft, Cambium Learning Group, and Perfect World Entertainment. The board found that every claim in Uniloc's patent was anticipated or rendered obvious by an earlier patent.
"The PTAB decision is inconsistent with two prior rulings by the Federal Circuit and with the opinions of seven patent examiners who previously upheld the validity of the '216 patent in multiple reexaminations," Uniloc president Sean Burdick told the Kansas City Business Journal, which reported the decision earlier this week. "Ultimately the PTAB gave undue credibility to a lone expert opinion that was authored by petitioners' counsel. Congratulations to [opposing law firm] Erise IP for pulling wool over the eyes of the Patent Office."
Burdick didn't say if he plans to appeal the decision, which Uniloc is allowed to do.
Uniloc has sued about 75 companies with the '216 patent, according to the KC Business Journal. Of those, it says one-third settled out of court.
It was Uniloc's lawsuit against Microsoft that provided the company with its original headlines. Uniloc said that Microsoft's system of checking software licenses—in other words, type in a key number and have your software validated—violated the patent. That case led to a $388 million jury verdict against Microsoft. The nation's top patent appeals court upheld Uniloc's win, but it said that damages should be re-calculated. Microsoft settled for an undisclosed sum after that.
The massive win against Microsoft led to Uniloc embracing the pure enforcement model sometimes called "patent trolling," acquiring more and more patents solely for litigation purposes. The dozens of lawsuits based on the '216 patent don't include cases that involve other patents, like US Patent No. 6,857,067 on a "system and method for preventing unauthorized access to electronic data." That was used to sue Minecraft maker Mojang and Electronic Arts in 2012.
The '216 patent, which has been called an anti-piracy or "software activation" patent, expired in 2013 but was still used in lawsuits through 2014. Even after a patent expires, a patent owner can sue for up to six years of back damages.
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