Monday, June 18, 2018

Gil Amelio on Patent Infrigements

Investors Business Daily publishes Gil Amelio article with a story of Pictos vs Samsung lawsuit:

"A typical small inventive company, Pictos Technologies, was put out of business after Samsung aggressively infringed its intellectual property.

Pictos invented an inexpensive image sensor that could be used in countless applications such as mobile phones and automobile cameras, to name only two. This next-generation Image Sensor was a follow-on to my dozen or so image-sensing patents that helped launch the solid-state image-sensor business years earlier. The Pictos technology, developed after years of investment and design, was protected by a portfolio of patents obtained at substantial cost.

In 2014, Pictos sued Samsung in federal court, alleging that it had "willfully infringed" its intellectual property. After years of costly litigation, the case went to trial, where Pictos lawyers introduced evidence that proved Samsung began as a Pictos customer, secretly copied its engineering designs and production process, and replicated them in Korea. Using our technology and its sizable scale, it went on to dominate this sector of the world electronics market.

Following lengthy litigation, the jury ruled in our favor and awarded substantial damages. The judge then trebled the damages based on "evidence of (Samsung's) conduct at the time of the accused infringement." Please note: Samsung's behavior was so egregious that the judge tripled the jury determination of the infringement costs to us.

That was just the first round, though. The verdict can be overturned on appeal, which, of course, Samsung has filed.

Update: Once we are at historical stuff, SemiWiki publishes Mentor Graphics CEO Wally Rhines memories from the early days of CCD and DRAM imagers in Stanford University in 1960s.


  1. I did a patent search for Pictos as assignee and found 15 patents. Apparently the 2 patents Amelio refers to are from Conexant (Rockwell) and ESS (acquired Pictos which came out of Conexant) and refer to fluorescent light flicker mitigation and to strobe lighting. BTW, the patents are assigned to Imperium Holdings, an NPE as far as I know, and we know what that means. Perhaps Samsung was a customer of Pictos but I know that they started working on CMOS image sensors certainly by the late 1990's, if not sooner. To me, Amelio's narrative does not seem correct since Pictos (and ESS) was probably defunct by 2014. Also, I note Imperium is a Cayman Islands company, and not US.

  2. Eric... Even though that full story isn't contained within Amelio's piece, don't you think the point still holds? If Samsung hadn't willfully infringed, and instead had agreed to royalties, Pictos would likely not have sold off their assets to another entity... who then sold to another entity who purchased them for their IP with the purpose of litigating.

    It seems to me this is partially why so much IP is ending up in the hands of NPE's. And, just because an NPE has purchased the assets, does that mean the IP is any less valid? The very same (valid) IP is just ending up in the hands of entities that can afford to litigate the IP.

    1. Well, I have different feelings about IP in the hands of non-practicing, non-inventive entities and the whole patent troll thing. But ignoring that part, it is unclear if Pictos was a viable company with a competitive product. According to Conexant spun off Pictos around 2002, and Pictos lasted one year before being acquired by ESS around May or June 2003. [So saying Pictos sued in 2014 is way wrong, not just "the full story."] It is remarkable (not impossible) that Samsung bought Pictos' chips, copied IP, developed a new sensor, and put that in production within that one year of life. I think the ESS acquisition was independent of this narrative and a way for Conexant to monetize their earlier investment in developing (copying) CMOS image sensor technology. Amelio's article sounds like a small startup was fighting a Goliath company who stole the little company's hard developed IP. Conexant was hardly small and the whole story is artfully told to sustain the David (Pictos) v. Goliath (Samsung) myth. So my beef is with the storytelling and the falacies within. I am definitely not saying anything pro or con about Samsung's behavior but I do not trust any of the facts in Amelio's story. My own experience inside Samsung from 2008-2012 and since, is that Samsung is very leery of IP infringement and far from "willful." But the alleged events precede this era. Regarding the validity of IP in the hands of an NPE, that is just a matter of law, aside from my personal feelings about patent trolls. Just remember, from 2003 to 2014 = 11 years - before a suit was filed.

    2. It looks to me like there was one last action in that case in Nov 2018, though I can't see exactly what it was. Given the previous rejections to appeals, I assume that was a final rejection. What little reading I've done on this case, the treble damages, and the repeated rejections of appeals make it sound like this was a pretty egregious case of willful infringement on Samsung's part.

      I happened upon this article because I'm in a similar position relative to Samsung, sans the acquisitions along the way, and I'm earlier in the process. I'm much more of a David than Pictos. So far, my experience with them has been more in line with Amilio's characterization.

      Regarding NPE's, my sense is they're more of a symptom of a larger problem in the patent world. Clearly there are bad NPE's who take really bad patents that should just be invalidated and manage to squeeze money out of companies. I don't know about any other cases with Imperium, but here it sounds like they're genuinely pressing the rights to legitimate IP.

      I think the challenge here is that (a) there are a lot of small companies and small inventors out there creating new IP all the time, and (b) larger companies are choosing to avoid it all where they can. This leaves lots of very good ideas out there without effective avenues to market. Or, potentially as in Pictos case, where the loss of revenue due to infringements and slow track to litigation resolution tends to kill young companies in their precarious early phases.

      The larger picture that I think Amelio was trying to get at (and I agree, he could have done a better job painting the true picture in his article) is that ideas are an important economic driver, and infringements and the patent system are currently acting as an impediment to potential economic growth. (See Paul Romer's work for which he just recently won the 2018 Nobel Prize in economics.)

    3. Sorry to hear you're a David. Licensing technology to giant companies only seems to work in certain fields (pharma, for example) and it seems in electronics, if you aren't cross-licensing, you are mostly left to litigating. At Samsung, I do remember a steady stream of companies trying to get Samsung to license their technology, and usually at very unrealistic prices. But, like the lottery, sometimes these companies are successful. I hope you win the lottery.
      The only real strategy is to go faster and offer a compelling advantage, and then be acquired, assuming you have the IP locked up.
      I disagree with you about the patent system. Without IP protection (i.e. litigation) as a possibility, small companies could only be successful in niche markets or for short periods of time. I think the patent system, as is, fuels technology innovation and is better than any alternative I have heard of so far. I do agree with Romer as conveyed in this synopsis of his work from the NYT "Professor Romer developed the idea that nations could foster innovation by investing in research and by writing laws governing the ownership of intellectual property that rewarded innovation, but not excessively." emphasizing the excessive part.
      I remember being in court, as an expert witness, and the patent troll attorney telling the jury in his opening comments, that it was ridiculous to think that a small company like Photobit could possibly have innovated something that could only come from an electronics giant like Motorola. I had to sit on my hands to not jump up and call him a liar right then and there, given that Photobit and Kodak had transferred technology to Motorola in a highly documented way, that Moto then patented (again). The case was NOT about Photobit but the bias against small company innovation was clear. The case was actually troll v. Canon as has been discussed previously in this forum.

    4. I don't think we're saying dissimilar things about the patent world. I'm just saying that the Samsung approach of "meh, just sue us" and then fighting litigation to the death, promotes a negative externality with regards to the marketplace of ideas. Crushing people and small companies with good ideas as a response to patent infringements, in light of Romer, sets up a market inefficiency that can and should be addressed.

      The quote you offer from Romer, including the "excessively" adjective, is exactly what I'm trying to say. I also think NPE's pressing large numbers of bad cases in order to settle out lots of small payouts is also terrible for the market.

      I also hope I can win the lottery on this one; at least a small one. It's been a very long and arduous road, and it's more than daunting to feel like I'm close to the end while staring up at a Goliath so much more massive than myself. (Just an FYI, my IP is in the electronics world – Samsung, obviously – but is unrelated to imaging sensors.)

      I do appreciate the intelligent engagement here. Thanks! :-)


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