Mobile Platforms, Patents and Linux in Context

• Agenda

– Realities that Shape the Context for Android and Other OSS Platforms

– Global Markets & Actors » Secondary Market for Patents» Hedge Funds» Patent Speculators/Trolls» Operating Companies

– Litigation – eBay, ITC and the DOJ

– Conclusion

Realities –

• Emergence of an Increasing Number of Patent Speculator/Troll business models and Defensive Patent Pools (OIN, AST, RPX, etc.) are Forming, at least in part, to address the Patent Speculator/Troll problem

• Operating Companies Threatened by Linux and OSS Technology Platforms are Using Capital to:

• Acquire Patents to Strengthen/Broaden Offensive and Defensive Patent Position

• Limit the Number of Linux/OSS Technology Platforms or Distributions –

• Potentially Fund Patent Speculator/Troll Activities Targeted at Linux/OSS – SCO Redux?

Current Realities

Realities - Mobile Linux/Android Rising

Source: Florian Mueller

Android’s Success is Attracting Attention

Android is More than Just Linux

Current Realities

Source: PatentFreedom © 2011 Data captured as of January 1, 2011

Operating Company Parties in NPE Lawsuits Over Time

 

No. Company Name 2006 2007 2008 2009 2010 Total

1 HP 8 13 20 17 17 75

2 Apple 3 12 12 23 20 70

3 AT&T 6 16 9 10 16 57

4 Sony 5 10 11 16 13 55

5 Microsoft 6 16 13 14 5 54

6 Dell 8 10 8 17 10 53

7 Samsung 8 14 11 6 12 51

7 Motorola 4 12 14 10 11 51

9 LG 3 12 9 7 15 46

10 Verizon 3 14 8 7 10 42

11 Panasonic 4 9 9 12 6 40

12 Nokia 4 10 9 11 5 39

13 Time Warner 6 9 5 3 14 37

14 Google 3 10 7 10 6 36

14 Cisco - 13 6 7 10 36

14 HTC 3 5 10 7 11 36

17 Sprint Nextel 3 11 8 6 6 34

18 Toshiba 4 9 5 8 7 33

19 Deutsche Telekom 2 12 5 5 6 30

19 RIM 2 3 11 6 8 30

21 Acer 4 7 8 7 3 29

22 IBM 3 7 2 10 5 27

22 Yahoo 2 11 2 7 5 27

24 Oracle 6 4 7 8 1 26

24 Fujitsu 3 3 7 8 5 26

Source: PatentFreedom © 2011 Data captured as of January 1, 2011

Ranking of Operating Companies by Number of NPE Lawsuits

Litigated Patents

Category Patents NPEs Litigations

Semiconductor 622 98 1050

Software Applications Market 346 97 701

Financial Service 173 40 664

Communications Equipment 233 69 552

System Infrastructure Software Market 322 101 476

Communication Services 226 59 371

Computing 204 51 286

Wireless 135 46 285

Software Application Development and Deployment Market

114 44 257

Consumer Electronics 119 43 212

Imaging 51 14 198

Industrial Manufacturing 29 12 117

Components 92 28 111

Consumer Goods 22 10 36

Medical Devices, Pharma & BioTech 25 8 35

Retail 31 3 12

Other 26 18 42

NPE Patent Litigation By Product/Technology Category

Source: PatentFreedom © 2011 Data captured as of January 1, 2011

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Mobile Wars – Linux/OSS as Targets

Defensive Countermeasures :

1)Acquisition of 1,000+ patents from IBM

2)Purchase of Select Defensive patents from Motorola and HP (Palm) that were conveyed to HTC

3)Announced acquisition of Motorola Mobility and its 17,000+ Wireless patents

Mobile Wars – Linux/OSS as Targets

Open Invention Network’s Role – Guardian & Enabler

OIN Mission Summary

•Open Invention Network – Industrial Firms Committed to Open Source and Linux and Engaged in Purchasing/Licensing of Patents & Parallel External Actions to Create a Patent “No Fly Zone” around Linux

• Patent Acquisitions (past and current inventions)• Directed Invention (Universities, Individual Inventors, Acquired Patent-Centric SMEs)

• Patents• Defensive Publications•Patents w/Defensive Publications

• Royalty Free Licenses• One on One Assistance to Those Under Threat• DOJ Resource to Advise on Anti-competitive Behaviors Related to Patent Leverage• Linux Defenders

• OS “Peer to Patent”OS “Peer to Patent”• OS “Post-Issue Peer to Patent”OS “Post-Issue Peer to Patent”• “ “Defensive Publications”Defensive Publications”• “ “LinuxDefenders911”LinuxDefenders911”

14

OIN Licensee US patents Holdings

Company Patents ApplicationsIBM 65805 38737Sony 33974 16175NEC 27537 13039Philips 25470 12700Fujitsu Limited 23554 18446Hewlett-Packard Company 22820 1585Cisco Systems, Inc. 6415 2701Oracle 2664 1823Quantum 1360 394Symantec Corp 937 111Juniper Networks, Inc. 782 318Yahoo! Inc. 749 1898Google 664 653Novell 483 309HTC 171 228Red Hat 157 242Fujitsu General Limited 156 70NHN Corporation 40 202Tom Tom International BV 32 18salesforce.com 25 114University of Hull 16 10IGNIS Innovation Inc. 15 21Bakbone 10 1Facebook, Inc. 10 19Barracuda 7 35Netgear, Inc. 7 8Accudata 2 1DeviceVM Inc. 2 1FON (Fon Wireless Limited) 2 0SugarCRM 2 11Nationwide Mutual Insurance Company1 0Ooma, Inc. 1 1Rackspace Hosting, Inc 1 0

Note: For efficiency, only those licensees with US patents and/or applications are listed.

> 385+ Licensees

> 400+ Patents & Applications

> 250+ Defensive Publications

> 300,000 Patents & Applications in Potential Cross-License Grant Back Pool

OIN “Owned” IP Assets & Licensees

AST

Other ‘Defensive’ Patent Entities

Realities –

• Innovation – Discontinuous Innovation - that radically Redefines and Existing Market or Creates a New One - is Challenged by Incumbent Monopolists and Duopolists Seeking to Protect the Status Quo

• Patent Wars Emerge BUT Rationalization Can Be Expected to Develop Over Time as the Linux/Android Antagonists’ Proprietary Products/Platforms are Vulnerable to Defensive Patent Counter-Attack in the Mobile Space

• eBay Ruling and ITC Reform Will Serve to Limit Ability of Speculators and Operating Companies to Secure Injunctive Relief and Further Encourage Negotiated Cross-Licenses

Current Realities

Open Source/Linux is a Social Phenomenon with Far Reaching Ramifications for Innovation - Economic Principle of Increasing Returns Applies 1 + 1 +1 = 6

As a result -

– Open Source/Linux Enable Innovation in a Manner that is Threatening to Operating Companies Seeking to Restrict the Manner and Output of Invention – Direct Android Antagonists

– Market Dynamics have given rise to Increased Patent “Troll Litigation” that Limits Innovation and Diverts Capital to Defense – Indirect Android Antagonists

– Android Platform (not Linux in the main) subject to – direct and indirect – attack on patent grounds in a misguided effort to make total cost of ownership prohibitive for vendor and carrier deployment BUT in the end the market and freedom of choice wins out

Conclusion