Unified Patents claims to “Challenge Bad Patents,” but their statistics tell a different story.
by: Patrick Anderson | July 17, 2017
As part of our ongoing series to factually expose the patent opposition’s effort of “de-propertization” of patents, I further breakdown Unified Patents as more the devil of patents than Saint Thomas More. Last month, I posted a detailed breakdown of Inter Partes Review statistics relating to petitions filed by self-proclaimed ‘Anti-Troll’ Unified Patents. While I highly recommend you read that post, a few of the highlights for convenience:
- A paltry 34% institution rate (compared to about 71% for the PTAB overall)
- An Institution:Denial ratio less than one
- A substantially higher settlement rate than average
No Bad Patents
Unified Patents claims to “Challenge Bad Patents,” but their statistics tell a different story. By failing to institute almost two-thirds of their IPRs, and straight-up losing at the institution stage twice as frequently as petitioners-at-large, only two conclusions fit the data:
- Unified Patents challenges legitimate (or “good”) patents, making them little more than a nuisance to most patent owners – no better than the NPE they love to assail, or
- Unified Patents grossly overstates their skill and expertise in bringing IPR challenges
While neither conclusion paints a flattering portrait, the most likely explanation is a combination of the two.
Unified claims that it “will consider settling.” However, statistics demonstrate that settling is more of a modus operandi than a mere consideration. According to the previously examined statistics, Unified’s ratio of institutions to pre-institution decision settlements is 1.67:1. Statistics from Lex Machina demonstrate the overall ratio to be more than 3:1. Thus, Unified prefers settlement to receiving an institution decision by nearly double the rate of other petitioners. Why?
Unified’s post-institution behavior is even more peculiar for a company claiming to be driven by eliminating “bad” patents. Petitioners have the clear upper hand during the trial phase of the IPR process, with patent owners prevailing, in part or in whole, in less than 30% of final written decisions. With victory statistically assured, a self-proclaimed mission, and, honestly, nothing to lose – observers might expect Unified to settle less frequently than their petitioner counter-parts.
After all, a litigation defendant-petitioner risks strengthening the patent owner’s district court litigation if they fall into the 30% club, but Unified has no such fears. Remarkably, however, Unified’s settlement rate goes up at this stage to 33%, as opposed to the average of less than 25%. Said another way, Unified settles more frequently despite the fact that their only exposure from proceeding to final written decision are their own legal fees.
Specks v Plank
In his famous Sermon on the Mount, Jesus asked, “Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank in your own eye?” (Matthew 7:3). Unified criticizes so-called “NPEs” because they act as a middleman to enforce patents without producing a consumer product, which is a mere speck compared to the plank firmly lodged in UP’s eye blinding them to the fact that they insert themselves as another middleman into a transaction in which they have no stake!
Unified Patents, like the patent owners they deride, also makes no products; its raison d’être is to file IPR petitions in order to obtain a cheap license to intellectual property. Its business practice can be described as IP blockbusting, which is, in reality, far worse than simply not producing a product.
NPEs are Middlemen – vital to IP Industry
NPEs are middlemen and create a market for invention, incentivizing invention critical for driving a knowledge economy. NPEs are vital to an otherwise opaque, illiquid, and overly legalistic industry. They provide patent transaction services broadly to the F500/G2000 and individual inventor alike – and they are paid for the valuable services they provide.
Just look at the recent Apple patent purchase from Goldpeak – IAM Magazine’s story headline no less: (emphasis added)
“Apple’s deal with a Korean NPE indicates the patents involved were of very high quality“
Conversely, UP does actual damage by destroying patent property of inventors for their own financial gain. By abusing the IPR process under pretense of their membership (similar to this case), filing weak petitions in an attempt to intimidate owners into undervaluing their intellectual property, Unified attempts to
extort extract free licenses for the benefit of its own bottom line.
Whether by taking weak positions or by frivolously challenging legitimate patents, Unified’s business model thrives on intimidation, pure and simple. However, it all but falls apart if patent owners defend their patents through final written decision, refusing to capitulate. With the ineffectiveness of their efforts exposed, time will tell whether patent owners harden their positions, bringing about an abrupt end to Unified Patents.
Our standing invitation to Unified Patents to come on our IP…Frequently Podcast remains. While we support and offer strong, fact-based opinions, we are committed to fair and balanced industry coverage; we want the other side of the issues we present to come on and share their POV.