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Consultant hunts weakness in Lemelson patents








EE Times


OTTAWA — He lived a simple life outside Reno, Nev., and his isn't the best-known name in technology circles. But even after his death, Jerome Lemelson and his 500-plus patents continue to dog big business and are closing in on the last of the semiconductor-industry holdouts.

In certain circles, the mention of Lemelson's name provokes groans and rolled eyes. In the past decade, his patents have netted literally hundreds of millions of dollars in royalties from industries as diverse as automobiles, VCRs and pharmaceuticals, and the trail is continuing with an infringement lawsuit filed by the Lemelson Medical, Education & Research Foundation against 26 companies last July and a second suit against 88 more just this year.

Now, Canadian consulting firm Chipworks Inc. is hoping to make some money off Lemelson's unpopularity, tracking down "prior art" that could limit the scope of Lemelson's patents related to semiconductors. "We're trying to build a case that other people were doing the same thing," said Terry Ludlow, president of Chipworks (Ottawa).

But Gerald Hosier, the attorney representing the Lemelson Foundation in its patent fights, has his doubts, given the amount of money that's already gone into contesting Lemelson's inventions. "If there was prominent prior art, they would have found it," he said.

Moreover, the Lemelson story might be winding down. Ever since the Big Three automakers settled on the use of certain Lemelson patents last year, longtime holdouts have begun accepting Lemelson's licensing terms at the rate of one company per business day, Hosier said.

"Last June, when we settled with Ford, there were 90 licensees. That's gone from 90 to 250," including names like Boeing and U.S. Steel, he said.

Cypress Semiconductor Corp., for one, said it has no plans to add its name to that list. "We've never heard of Lemelson before this," said corporate counsel Drew Fortney, "and we don't believe he contributed anything to semiconductor technology." Vowing to test the validity of Lemelson's patents, Fortney insisted, "We have no intention of paying anything."

Lemelson, an engineer and inventor, began filing patents in the '60s, mostly covering automatic-ID technologies similar to bar codes, and "machine vision," an area that includes the pattern-recognition technology used in several fields of automation. Most of his patents weren't approved until the '80s or the '90s, by which time the technology was widely in use.

Despite industry protests, Lemelson campaigned to license his patents, filing lawsuits against those companies unwilling to pay royalties. Licensees have included many semiconductor companies, all major VCR manufacturers and every mass-production automaker worldwide. Lemelson died in 1997, leaving his nine-figure fortune to the Lemelson Foundation, which among other things sponsors annual innovators' awards with MIT.

Several inventors have similar stories — Gilbert Hyatt in 1990 was awarded a far-reaching patent on a single-chip microcomputer, for example. But none was as prolific as Lemelson, whose 500-plus patents put him on a par with Edwin Land, inventor of the Polaroid camera, for an individual holding the largest collection of patents. (Both fall short of Thomas Edison's 1,000 patents.)

Naturally, the validity of Lemelson's patents has been under fire. Corporations accuse him of a tactic known as "submarining," whereby a patent application is continually tweaked and resubmitted, kept alive in the U.S. patent system while an industry grows up around it. Because a patent's expiration date was once based on its final approval date, a filing's paperwork could be kept alive long enough to see if the invention led to successful businesses, after which the approved patent could be used to collect back royalties.

"The longer you can extend this, the more you can look and see how technology is actually evolving. Then you can modify your claims," Chipworks' Ludlow said. "The Kilby patent [on the integrated circuit] is another example of this. TI [Texas Instruments Inc.] took 25 years to get that one through."

Blame the patent office, Hosier said. Patent officials split Lemelson's applications into multiple inventions, he said, each requiring a separate filing. Lemelson would protest those changes unsuccessfully, then proceed to break down his application into smaller applications, resulting in a wait, in some cases, of more than 30 years.

That's critical because at the time, a patent lasted 17 years after being approved. In Lemelson's case, the delays kept his patents alive long enough for the information age to take hold, which just adds to the bitterness of Lemelson's opponents. Had the patents been approved immediately, they wouldn't have lasted long enough to apply to inventions like VCRs; as it stands, Lemelson netted quite a tidy sum from the VCR industry.

The law has changed so that patents expire 20 years after their initial filing date, but Hosier worries that the change could hurt inventors by shortening patent life spans. "The patent office is still going to be slow," he said.

Lemelson always denied that he was abusing the system, and claimed that the patent system's primary flaw was that it rewarded large corporations rather than the scientists and engineers doing the actual inventing. His status made him a hero among many smaller inventors. "Some of the little guys out there are rooting for him because he beat the system," Ludlow said.

Lemelson's most recent case involves 88 semiconductor companies in a lawsuit filed in U.S. District Court in Arizona. Filed in February, the complaint alleges the violation of more than a dozen patents, most of which cover the scanning and inspection of wafers.

Chipworks, looking for a calling card to the semiconductor industry, began investigating Lemelson's patents for possible "prior art" — a public display of similar technology that predates the patent. It found papers from a 1960 trade show, Ludlow said, documenting some of Lemelson's ideas being applied to ion implantation.

"It just shows that people skilled in the art were familiar with those techniques before the patent was filed. We're trying to build a case that other people out there were doing the same thing," Ludlow said. And for a fee, the company is willing to carry the search to other Lemelson patents. "We looked at this as kind of a marketing opportunity," Ludlow said.

The findings by Chipworks won't help the 88 defendants in the Lemelson Foundation's latest suit, but they indicate there's hope that Lemelson's patents can be weakened. Typically, an invalidated patent claim is reworded to handle a more-specific case, which keeps the patent alive but narrows its scope. Enough tweaking can render a patent irrelevant.

"This is nibbling away at the edges of it," Ludlow said. "This is typically how it's done. You work away at the edges."

But, Hosier said, the biggest fish in the pond have already tried that, all of them producing prior art, none of it strong enough to deflect Lemelson's claims. "Every single defendant has claimed he has prior art that's very significant," he said. "I would be awfully surprised if some little outfit in Canada is coming up with something that hasn't already been seen."

Hosier acknowledged that some work predates Lemelson's filings, and he said that's not unusual.

In fact, prior art can almost always be found, Ludlow said, because patents are written to cover as much technology as they can. "If you invented something that covers a small, incremental improvement in a process, you may start claiming infringement over anyone using the whole process," he said.

So if Lemelson's patents overstate their usefulness, they're not alone. Corporations often file questionable patents just to cover their bases. "I've had chief patent officers from a major semiconductor company tell me that what you want is a portfolio with quantity and quality — but if you can't do both, you settle for just one," Ludlow said.

Most patents do contain a novel idea, Ludlow said. "It's just not necessarily what the patent owner is telling you it is."

Chipworks is trying to recruit clients who will pay for research into the other patent claims from the February suit, but the company is having little luck. Lemelson's lawsuits are priced "right at the threshold of pain," making settlement just preferable to fighting the suit, Ludlow said. As a result, companies tend to settle out of court, paying licensing fees to Lemelson. "It's a good strategy," Ludlow said.

Indeed, at least 10 of the 26 chip companies sued in July have settled, and Hosier expects at least two-thirds of the 88 February defendants to settle as well, with Intel and Texas Instruments remaining among the prominent holdouts.

But Cypress Semiconductor's Fortney said "we'd rather defend ourselves . . . than settle.

"We don't view these as nuisance suits," he said. "We're in this to get a ruling on the patents."

Lemelson's foundation, based in Nevada, continues the charitable causes he started during his lifetime, including the Lemelson-MIT awards given to inventors to reward creativity. The foundation's activities are kept relatively low-key because of his acrimonious relationships with business; Ford and other corporations considered cutting off funding to MIT after the awards were established, Hosier said.

Hosier said he used to tell Lemelson, "When you're around asking for money, people are going to be calling you every name they can," noting that even Thomas Edison's inventions came under dispute during his lifetime.

— Additional reporting by Margaret Quan











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