Who Is The Real Winner In Apple’s Patent Settlement Over Siri?
May 4, 2016 (Mimesis Law) — On April 19th, Apple agreed to pay $24.9 million to resolve a 5 year-long lawsuit with Dallas-based Dynamic Advances over its Siri voice technology. The lawsuit dates back to 2011 when iPhone 4S with voice-based digital assistance Siri was released. Apple was accused of infringing a patent, which was granted to Rensselaer Polytechnic Institute in 2007. The patent was licensed exclusively to Dynamic Advances.
If the case is settled out of court, Apple, in exchange for paying $24.9 million, will receive a patent licencs to use the technology and immunity from lawsuits for the following three years. Under the term of the settlement, Dynamic Advances expects to pay 50 percent of the money received from Apple to Rensselaer. However, it is rumored that Rensselaer has not agreed to the royalty rate proposed in the settlement. The case may therefore go to trial this month in U.S. District Court in the Northern District of New York.
Apple has been facing an uphill battle over its Siri technology around the world. In China, Shanghai-based Zhizhen, which offered its own voice recognition service, named Xiao i Robot, filed a patent infringement lawsuit against Apple in 2012. In its response, Apple claimed in 2014 that the patent owned by Zhizhen be ruled invalid; but the claim was refused by China’s State Intellectual Property Office and also by Beijing’s Number One Intermediate People’s Court.
What is noteworthy about this case is that Dynamic Advances’ parent company, Marathon Patent Group seems very much like, what is called, a NPE (non-practicing Entity). As a matter of fact, its website says:
“Marathon Patent Group is a patent and patent rights acquisition and licensing company. We acquire patents and patent rights from patent holders ranging from individual inventors to Fortune 500 companies. Our strategy of acquiring patents that cover a varied scope of subject matter allows us to achieve diversity within our patent asset portfolio. We generate revenue with our diversified portfolio through actively managed concurrent licensing campaigns. This approach is expected to result in a long-term, diversified revenue stream.”
I wouldn’t dream of calling the Marathon Patent Group a “patent troll”, however; this settlement may provoke a discussion as to whether it is appropriate or not for patent trolls or NPEs to take full advantage of their intellectual property rights to reel in large sums of money. On the other hand, particularly for IT Giant Apple, $24.9 million may not be a big concern, because it gives Apple a free hand to use its Siri technology, which is an essential function of its iPhone series.
Now, let me suggest that you ask your iPhone’s Siri a thought-provoking question: “Who is the winner of this lawsuit?”
Roy Song is writing under pseudonym and works for an unidentified government and Intellectual Property Office.