Intellectual Property (as of 2005)

In its March 2005 financial statements, ParkerVision placed a net value of approximately $8 million on its “Patents and Copyrights” out of a total value of $10M for “other assets”. This number is also presented on the company’s balance sheet, where the total assets were about $42M, and cash represented about 50% of the assets. Therefore, intellectual property represented almost 20% of ParkerVision’s total assets, and almost 40% of its non-cash assets. From the September 2005 financial statement (published November 11, 2005), the total assets had decreased to $27.9M (with $13.3M remaining cash) and the other assets had decreased to $9.4M, with intellectual property representing $8.7M. Therefore, the patents represented 31% of the total assets, and 60% of non-cash assets!

 

The company therefore places significant value on its intellectual property relating to the ESP platform and D2D/D2P technology. However, to date, ParkerVision has only consummated a single licensing deal with Symbol Technologies (a 6.5 year agreement signed in 1999), and no Symbol products have been marketed under the D2D name to date. Furthermore, it appears that the last payment made to ParkerVision by Symbol was in 2004, and that the relationship ceased to exist long before the license expired.

 

It appears, however, that not only is the size of the portfolio questionable, but the novelty of the ideas in the patents is dubious, and the enforceability of the patents is uncertain. Given ParkerVision’s expenditures of several million dollars in creating its intellectual property portfolio, one can only wonder what business rationale was used to approve such an investment.

 

Is the number of patents overstated?
We define “portfolio” as all issued, independent patents and patent applications (i.e., we did not count different codes for the same application number as separate patent applications as they are only different versions of the same application). Detailed holdings based on searches at the US Patent & Trademark Office website (www.uspto.gov) and the WIPO website (www.wipo.int) are given in ParkerVision Patents and Patent Applications Pending and ParkerVision Patents and Patent Applications Pending – A More Recent Look.

 

We highlight several recent claims by the company regarding its portfolio:

  • August 2004, in product descriptions posted on CompUSA for the PC LAN card: ParkerVision states that it has “over 130 patents awarded and pending” on D2D technology.
  • March 16, 2005, 2004 10K statement (page 8):

 

“The Company has obtained 59 patents related to its D2D technology and has over 90 patent applications pending in the United States and other countries. The Company estimates the economic life of its patents to be fifteen to twenty years.”

 

We summarize the following statistics for ParkerVision assigned intellectual property holdings at the time of the 10K release. Note that these numbers are the direct result from searches done on January 8, 2006, with no further triage. It should reflect patents that were issued and published with 100% accuracy, and patent applications filed before June 6, 2004 with 100% accuracy.

 

D2D
Year

Total

US
Patents

US Pat Apps

Intnl
Patents

Intnl
Pat Apps

2006

75

25

22

6

22

 

There is a substantial difference, over one year after the announcement in the number of patents awarded and pending. The difference is 75 versus 130 in the product descriptions, and 149 in the 10K statement. The ParkerVision numbers are greater by a factor of 2, which represents a material difference. 

 

Even in January 2006, ParkerVision only had 25 + 6 = 31 published patents worldwide on D2D technology. We do not understand how ParkerVision can substantiate its claim of 59 issued patents. Furthermore, five patents were issued in 2005, so that at the time of the 10K report, there were only 26 issued patents! 

 

ParkerVision claimed 90 pending applications worldwide. However, we only found 22 + 22 = 44 published applications, i.e., a discrepancy of 46 applications, for a six-month filing window (June-Dec 2004, since patent applications are usually published after 18 months of filing).

 

The only way in which we can rationalize this discrepancy is that ParkerVision double counts international applications based on title changes or corrections. The same patent application can appear to have two to six different suffixes for the same number. Clearly, this approach can lead to a misinterpretation of the size and value of a company’s portfolio. For 2004, we counted 138 published patents and applications using the inflated approach. Of these, 44 related to the video business which was sold. Therefore, we counted a total of 94 patents and applications in D2D technology with the inflated approach. We note that again, our results are far from the D2D portfolio claiming 149 items in the 2004 10K report or the 130 items in the product description.

 

Is ESP/D2D/D2P technology novel?
Validity, enforceability, and potential infringement of an issued patent are very complex legal issues that are beyond the scope of the resources available to us (i.e., this commentary makes no assertions regarding the validity of the ‘485 patent or any other patents assigned to or owned by ParkerVision Inc).

 

However, the novelty of patents can be assessed by considering the prior art. We present the observations of a skilled radio frequency engineer, who built his first FM receiver in 1979, has read papers on switched capacitors and charge coupling since the early 1980s, and has reviewed papers for engineering journals since 1987. He has encountered many genuinely novel radio concepts that are published and patented every year. 

 

He assessed the novelty of two early ParkerVision patents, specifically U.S. Patent Numbers 6,813,485 and 6,091,940. In both cases, he was able to identify significant prior art. Some of the claims read as prior art, and many of the drawings of the invention appear very similar to radio frequency converters existing in the prior art. In his opinion both the ‘485 or ‘940 patents do not appear to contain new ideas or novel configurations. In fact, many figures that describe the inventions can be found in the literature prior to 1997. Therefore, the connections and configurations of these devices do not appear as anything new. Worse, it appears that well-known circuits were “redrawn”, and new terminology for existing RF circuit design concepts was created. 

 

For more information, please see the following links:
Comments on U.S. Patent No. 6,813,485
Comments on U.S. Patent No. 6,091,940

 

Are the patents even valid?
For each of the patents cited in the press releases, we did find over 600 references cited. The order of the citations was changed for each of the first five patents (for example, some of the journal papers are rearranged slightly and the press releases are placed at different points within the citations), so that the citation list appears to be different for each patent when the text is skimmed rapidly. However, when the files are parsed, the citation list can be shown to be identical for all but two citations. Such a long list of references would be nearly impossible for any patent examiner to fully evaluate. 

 

The relevance of the prior art to the patented invention or inventions covered by the claims of each issued patent, is unclear. Of the 600 citations, about 344 were US and foreign patents, 59 were ParkerVision press releases, 228 were technical citations (of which one quarter comprised papers by Enric Vilar, whose work relates to the impact of atmospheric conditions on satellite communications, rather than on the wireless technology!), and the remainder were miscellaneous.

 

Is it actually possible that a strategy of obfuscation by references and citations could have been employed by counsel? A patent may be held by a court to be unenforceable based on a finding of inequitable conduct by the inventors, the assignees, their attorneys or others who are substantively involved in the preparation or prosecution of the application. A patent applicant’s compliance or non-compliance with the duty of candor imposed by 37 C.F.R. §1.56 presents fertile ground for arguments regarding inequitable conduct. In short, 37 C.F.R. §1.56 requires that inventors, their attorneys, and others related to the inventors, including employees and officers of the company to which the rights in a pending patent application are assigned, disclose to the patent office all information of which they are aware that might be material to the patentability of the pending claims.

Could this be one of the reasons why ParkerVision managed to obtain only one licensing agreement with a single company (Symbol Technologies) that never even commercialized the technology since the inception of D2D nine years ago?

 

For more details, see the following links:
Summary of ParkerVision Claims Regarding its Patents
Appendix for ParkerVision Patents: Patent Related Press Releases