Patent Trolls Up to No Good
- By Ralph C. Jensen
- Oct 01, 2015
There are troubling, albeit legal, shenanigans
going on not only in the security industry
but in several other industries, as well. It is
all about patents for products that are on the market,
and may have been for quite some time.
Several security equipment manufacturers contacted
me about “patent trolls.” I’ve read about them,
including those in the security industry, only to find
out that what they are doing is perfectly legal, but I
wonder if it is ethical.
The situation has affected all entities in the security
industry from manufacturer, end user and integrator.
All have felt the blunt touch of the legal system,
thanks to the patent trolls, so much so that the Security
Industry Association (SIA) is urging house and
senate leaders to take up companion bills that would
crack down on abuses by patent assertion entities.
The main offender, or the company that seems to
be on the other ends of the lawsuits, is none other
than Hawk Technology systems, LLC. If you’re in
the security industry, you’ve likely heard of them, and
about them. They have been active in filing patent
lawsuits nationwide.
In a letter to House Speaker John Boehner and
Minority Leader Nancy Pelosi, SIA is asking the
House to pass the Innovation Act (H.R. 9), bipartisan
legislation in increase accountability on patent litigation
and to stop patent trolls. Letters have been sent
to Senate Majority Leader Mitch McConnell and Minority
Leader Harry Reid, requesting action on the
Protecting American Talent and Entrepreneurship
Act (S. 1137), which would increase accountability
while thwarting patent trolls.
According to SIA, patent trolls are companies
or individuals that threaten businesses with lawsuits
based on vague or overly broad patents in an effort
to collect money from settlements. Security product
manufacturers spend millions of dollars each year defending
against frivolous patent litigation.
I had a nice, but short conversation last month
with Marc Shulman, who said he was the legal consultant
and a partner with Barry H. Schwab, who claims
to be the inventor of numerous patents, including the
‘462 patent; now reissued as Patent #RE43462, which
is “A PC-based system for monitoring and storing
representative images from video cameras that may
be utilized for security or other monitoring applications.
Camera inputs from digital or analog sources
are individually and independently digitized and
displayed,and may be stored in digital form on various
recording media. Provisions are included for adding
detection or alarm systems which will automatically
alter image size, sampling rate and/or frame rate of
an individual input source, or activate other physical
responses. In addition to security system monitoring,
further applications of the invention are disclosed for
process monitoring in manufacturing environments
and also for applications in videoconferencing.”
This kind of activity is not new; in fact, the music industry
has been battling this for years, maybe decades.
Well-known and respected attorney Ken Kirschenbaum,
said patent lawsuits and costly to prosecute
and costly to defend. For the most part, it’s all about
the money.
“The security industry invests considerable time,
research and development and human capital into
developing a wide range of cutting-edge security solutions
through their trusted channel partners into
various markets,” said Jake Parker, SIA director of
government relations. “The aggressive efforts of patent
trolls are a significant threat to investment in the
next generation of security products.”
Security companies have not sat idly by to see what
happens. On-Net Surveillance System Inc. has filed
a lawsuit in the Southern District of New York vs.,
Hawk Technology. OnSSI is seeking a declaratory
judgment of non-infringement of the patent in question,
and they claim they and their customers have a
license to and/or are covered by a covenant not to be
sued for infringement of the ‘462 patent.
This is not new business for Hawk Technology.
The name itself is somewhat deceiving because they
do not manufacture any products or offer for sale any
products or services. Formed in 2012, their business
is directed to owning and enforcing the ‘462 Patent in
litigation. They have been busy. To date, Hawk Technology
has filed more than 115 lawsuits for infringement
of the patent, and such suits have been filed in
judicial districts nationwide.
According to the lawsuit filed of OnSSI, they state,
“On information and belief, Hawk has followed each
filing with a demand for a quick settlement at a price
far lower than the cost to defend the litigation.”
Seems like this is an “anything for a quick buck,”
style of litigation. Others have been successful in defending
their company practices. For instance, Genetec
filed a declaratory judgment action against Hawk
Technology in August 2014
Jones Day represented Genetec, Inc. in an action
seeking a declaration that it did not infringe, and had
intervening rights in, Hawk Technology Systems,
LLC’s U.S. Reissue Patent No. RE 43,462, claiming to
cover video storage and display technology. Genetec
further sought a declaration that the ‘462 patent was
invalid. Jones Day resolved the matter for Genetec,
ensuring its integrators, distributors and customers
were protected from Hawk’s ongoing infringement
litigation efforts.Is it legal for Hawk Technology to do
this? Yes. Is it ethical? Not so much.
This article originally appeared in the October 2015 issue of Security Today.