What happened to Ottawa-based patent-licensing firm Wi-Lan in an East Texas court this week has to be the nightmare of every company using patent licensing portfolios, lawsuits, and settlements as their business model of choice.
Wi-Lan is one of several patent licensing firms that claims to own patents related to wireless Internet. Wi-Lan filed a lawsuit against 22 companies over Wi-Fi in 2007, and in 2010, it went to East Texas to sue many other companies, claiming it owned patents critical to the data transmission standards in mobile phones. Later that year, it added cable modem makers to its lawsuit.
While a good amount of these cases are settled out of court, Wi-Lan (a publicly traded company) sued companies that decided to fight back. A verdict in the case was delivered on Monday, and investors in the publicly traded company reacted poorly to the decision. The stock lost around a third of its value on Monday, but has bounced back slightly since then.
The defendants that decided to fight back were Alcatel-Lucent, Ericsson, HTC, and Sony. LG Electronics originally was part of that group, but ultimately decided to settle out of court in 2010.
After sitting through the six-day trial jurors took about an hour to decide the case. Jurors came to the conclusion that none of Wi-Lan's patents in the case were infringed upon. The jury also found that three of the patents were invalid because they were used by earlier technology or were just obvious.
Of course, this decision in no way bankrupts Wi-Lan; the company claims a portfolio of 3,000 patents. Wi-Lan can also appeal the decision at the US Court of Appeals for the Federal Circuit…
Source: Ars Technica