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Companies Save Millions in Royalty Payments to Non-Practicing Entities by Invalidating Patents and Proving Non-Infringement
Chipworks Prior Use Analysis and Non-Infringement Services Support Companies in Refuting Claims
| Source: Chipworks
OTTAWA--(Marketwire - September 22, 2009) - Although there are limited options in defending
against Non-practicing Entities (NPEs), invalidating patents through prior
use and prior art and proving non-infringement are two tactics that often
prove successful. Services provided by companies like Chipworks
(www.chipworks.com), the world's leader in reverse engineering and patent
infringement analysis, can be a vital asset in proving non-infringement and
invalidating patents.
"With a growing number of high-tech patent litigations involving NPEs,
IP groups and law firms are employing unique approaches such as prior use
analysis to invalidate patents, saving millions of dollars in royalty
payments," said Founder and CEO of Chipworks Terry Ludlow.
According to Patent Freedom statistics, of the 2,806 patent cases in the
United States in 2008, 12.8% were NPE-driven. Through June 3, 2009,
according to the PACER and Lexis/Nexis data, NPE cases have increased while
overall patent litigation activity has decreased. Of the 1,318 U.S. patent
cases filed in the first half of 2009, 17% were NPE-driven. This data
implies that NPE activity will continue to rise at an above-average rate
into early 2010.
"Most often, companies will look to invalidate a patent internally first,
through prior art. Failing that, they will turn to a firm like Chipworks
to conduct a prior use search or non-infringement analysis," added Ludlow.
The main advantage that Chipworks provides is its ability to combine
traditional prior art methods with prior use analysis, thereby increasing
the likelihood of identifying patent invalidity. For example, Chipworks
maintains both an information resource centre that houses over 8,000
research resources such as: reverse engineering reports, databooks,
datasheets, and conference proceedings as well as an in-house product
inventory. Its product inventory includes over 60,000 products/devices
dating from the 1970s, including those that are hard to find on the open
market, with nearly 5,000 new devices added annually.
In one recent case, a semiconductor company that was in patent licensing
negotiations with a competitor twice its size realized it needed
irrefutable evidence to invalidate the competitor's patents and reach a
favorable settlement. Chipworks identified and procured a
difficult-to-obtain device that pre-dated the patent, performed a
combination of circuit extraction and functional testing to verify the
circuit function in the device, and within two weeks, delivered a report
confirming evidence of prior use. As a result, the company is saving
millions of dollars in royalty payments to the NPE.
"Despite a short turn-around time, Chipworks gave us exactly the kind of
evidence we needed," said the Vice President, Intellectual Property, of the
semiconductor company. "They continue to help us with other prior use
investigations."
In another case, a consumer electronics giant was sued by a NPE alleging
patent infringement supported with claim charts. Chipworks re-created the
testing environment using the claim charts submitted by the NPE, ran
several new functional tests to understand the circuit operation, compared
it against all the key claim elements of the claim, and produced
documentation showing how the giant's products operated in a manner
substantially different from the patent claims asserted by the NPE.
Chipworks delivered a live demonstration of the functional tests to the
opposing counsel and their technical experts, leading, ultimately, to the
withdrawal of the suit.
"The non-infringement evidence produced by Chipworks helped us avoid
millions in litigation costs and damages," said the Intellectual Property
Counsel of a consumer electronics giant.
These cases exemplify the value that prior use and non-infringement
analyses bring as defensive tactics against patent infringement allegations
brought on by NPEs.
About Chipworks
Chipworks is the recognized leader in reverse engineering and patent
infringement analysis of semiconductors and electronic systems. The
company's ability to analyze the circuitry and physical composition of
these systems makes them a key partner in the success of the world's
largest semiconductor and microelectronics companies. Intellectual
property groups and their legal counsel trust Chipworks for success in
patent licensing and litigation -- earning hundreds of millions of dollars
in patent licenses and saving as much in royalty payments. Research &
Development and Product Management rely on Chipworks for success in new
product design and launch, saving hundreds of millions of dollars in design
and earning even more through superior product design and faster launches.
Headquartered in Canada, Chipworks maintains offices in the USA, Japan,
Korea, and Taiwan.