By KRYSTLE CHOW
Published on the Ottawa Business Journal website.
Aug. 10, 2011

Click here to view this article on OBJ.ca.

MOSAID Technologies Inc. (TSX:MSD) is preparing for a busy time of legal dealings amid three separate announcements on Tuesday, including a fresh patent infringement suit against seven companies and news of a complaint against the Ottawa-based firm.

The patent licensing company said it has initiated patent infringement litigation against Adobe Systems Inc., Alcatel-Lucent USA Inc., IBM Corp., Jupiter Networks Inc., NetApp Inc., Red Hat Inc. and VMWare Inc.

MOSAID is accusing the seven firms of making and selling computer networking server products and software that infringe on its U.S. patent nos. 6505,241 and 5,892,914.

The local company said it acquired the patents as part of a portfolio of distributed computing network patents in early 2011, and that the intellectual property deals with fundamental concepts in web caching, network caching and proxy servers.

MOSAID noted that the patents are relevant to multiple industry standards, including HTTP 1.1, ICPv2 and SNIA, and that they have “previously been litigated and licensed.”

This isn’t the first time MOSAID has had a run-in with some of the firms named in the suit – in late 2010, for example, the company announced IBM had taken a five-year licence for its MOSAID’s microprocessor technology, ending an 18-month battle.

“ARM” WRESTLING

In a separate announcement, MOSAID said it’s learned that a complaint for declaratory judgment has been filed against it in the San Jose division of the northern district of California’s U.S. district court. U.K.-based ARM Ltd., which makes processor cores for cellphones and hand-held computers, and its San Jose subsidiary ARM Inc. is seeking a declaration of non-infringement and invalidity with respect to seven of MOSAID’s U.S. patents related to power management techniques and microprocessor architecture.

When contacted by OBJ, MOSAID spokesperson Michael Salter declined to comment on whether the company had had prior legal dealings with ARM, but he pointed out that the seven patents at issue are the same ones involved in MOSAID’s recent lawsuit against NVIDIA Corp., Freescale Semiconductor Inc. and Interphase Corp.

Two of the patents – U.S. patent nos. 7,051,306 and 7,415,680, which are related to power management technology – are owned by MOSAID. The company, through a 2007 deal with LSI Corp., has the exclusive sublicensing rights to the other five patents – U.S. patent nos. 5,577,230, 5,724,505, 5,958,036, 6,141,762 and 6,256,725, which are related to microprocessor architecture – for a 10-year period.

Mr. Salter noted that NVIDIA, Freescale and Interphase make system-on-chip devices, some of which may contain ARM microprocessor cores.

In a copy of the complaint obtained by OBJ, which was filed Aug. 5, ARM wrote that “for at least two years, MOSAID has been harassing ARM’s customers/licensees with threats of infringement based, at least in part, upon the inclusion of ARM processor cores in the customers’/licensees’ products.”

“Because ARM’s business depends upon the utilization of its processor cores by its customers which license its processor cores, ARM is sensitive to accusations of patent infringement,” the document read. “ARM’s licensees/customers are concerned by allegations that their current and/or future products incorporating ARM processor cores might infringe a patent. Thus, it is important for ARM to address any cloud of uncertainty created by allegations of infringement from MOSAID.”

ARM’s complaint includes specific mention of NVIDIA and Freescale, and the assertion that it did not use any technology in the asserted patents in the design, development or implementation of its own products. ARM added it has certain obligations to indemnify one or more of its customers under certain conditions for threats of patent infringement liability.

“By making accusations of patent infringement against products of the threatened customers which include ARM processor cores, MOSAID has made at least an implicit assertion that ARM has indirectly infringed one or more claims of one or more of the asserted patents,” ARM’s complaint read.

MOSAID’s Mr. Salter said his firm will file a response to ARM’s complaint shortly, although he would not specify what sort of action would be taken.

However, MOSAID recently launched a patent litigation suit following a similar complaint by Cisco in August of 2010.

“MOSAID will continue to vigorously defend its intellectual property rights,” the company said in its release about the ARM complaint.

COVENANT COURSE

MOSAID also noted in another release that it was offering up a “Covenant Not to Sue” for sale. The mechanism is a new type of agreement that will protect the involved company from MOSAID patent infringement litigation.

Mr. Salter said this is the first time MOSAID has provided this option. The covenant is very similar to a patent licence agreement in that it will allow a company to gain the freedom to use MOSAID’s patented technology without fear of being sued.

However, the two mechanisms may have different terms and conditions, and, unlike a patent licence, the covenant does not grant a company the express right to use or practise a patent.

Specifically, the covenant covers four patents related to the electronic elements that enable cellphones to provide emergency call features, such as transmitting the phone’s geographic location when a 911 call is made, and the ability to make an emergency call using a voice command. The patents apply to cellphones that include navigational receivers, radio transmitters, switches, circuits, sensors and other emergency call-related technology.

The company noted it’s already suing HTC America Inc. and Sony Ericsson Mobile Communications USA Inc. for infringing on the patents.

MOSAID is selling the covenant in a sealed-bid auction on Sept. 27 through the ICAP Patent Brokerage, which is now accepting anonymous bids for the agreement.