Apple, Google Surrender to Patent “Troll”; Vizio and Toshiba Fight It and Win

Vizio, a top American electronics brand (privately held), has taken down an alleged “patent troll” in what the company’s spokesperson hails as the seventh major victory over a troll (also know as a patent assertion entity (PAE) or non-practicing entity (NPE)).

I. Refusing to Settle

The patent in question in the case was U.S. Patent No. 7,035,598, entitled “Modular computer system”.  Filed in Nov. 2001 and granted in Apr. 2006, the patent was the work of Scott Lochner, who went on to found the company that sued Vizio, Lochner Technologies.

The abstract describes wireless “thin client” technology, which is commonly deployed in corporate IT to save costs and improve mobility.  The approach involves running virtual machines on a powerful server backend and then piping the virtual client to inexpensive mobile laptops.

The abstract stating:

A computer system composed of a storage and control unit including components for receiving and processing input data signals and components for producing output signals based on the input data signals; an input/output unit including components for generating input signals and output components for providing a display based on output signals; and a wireless link between the units for conducting data signals from the components for generating input signals to the components for receiving and processing input signals and for conducting output signals from the components for producing output signals to the output components.
Lochner Tech., which does not make computers, then went on to sue virtually every major internet and technology firm in the industry.  Vizio’s codefendants included 21 other firms, including Apple, Inc. (AAPL), Google Inc. (GOOG),, Inc. (AMZN), Sony Corp. (TYO:6758), ASUSTek Computer Inc.’s (TPE:2357), Samsung Electronics Comp., Ltd. (KSC:005930), and LG Electronics, Inc. (KSC:066570), among others.  One of the cases was filed in California federal court; the other was filed in Texas.

Of the defendants almost all settled, with only Vizio and Toshiba Corp. (TYO:6502) looking to fight the suit.

II. FTW: Vizio Shoots Down Vague Patent

Ultimately U.S. District Judge Mariana R. Pfaelzer of the U.S. District Court for the Central District of California ruled that the patent was partially invalid, on the grounds that its specifications (details of the invention) did not fully describe the claims of the invention (the more abstract, shorter description).  In other words, Locner Tech claimed to have “invented” a lot of things via ambiguous catch-alls, but provided little in the way of details.

She explains in her ruling [via Law360], “The specification only demonstrates possession of an input-output system with fewer components than a conventional computer… [T]he claimed invention by contrast places no bounds on the type of components that can enter the input-output system so long as the system remains portable.”

Vizio, who was represented in the case by Adrian Pruetz of Glaser Weil Fink Jacobs Howard Avchen & Shapiro LLP, was excited at the outcome, which basically kills Lochner Tech.’s lawsuit.  

Comments Jerry Huang, Vizio General Counsel and VP of Legal Affairs in an email to Global Tech News, “We are gratified that the ill-advised tactics of the patent troll community continue to falter and are being rejected by the U.S. authorities.  The Court’s most recent ruling is yet another vindication of VIZIO’s position, in a long list of VIZIO victories in battling patent trolls and the apparent extortion attempts.”

Most of Vizio’s laptop line was accused of infringing the thin client patent.
“As an intellectual property rights owner, VIZIO respects such rights and their proper exercise.  VIZIO has demonstrated its commitment to thwart the advancement of the abusive practices of the patent troll community and shall continue to vigorously defend meritless lawsuits that have no application to VIZIO products”

Lochner can, of course, appeal the invalidation, but such uphill slogs are seldom successful (just ask Rambus Inc. (RMBS)).

Congress and the Obama administration recently reiterated calls to stiffen protections against patent trolls.  Meanwhile, Vermont became the first state to pass a consumer protection act targeting PAEs.  Such laws may be helpful in preventing some types of abuse, although they fall short of the underlying problem — companies patenting obvious/frivolous “inventions” (e.g. the wedge shaped computer) and patenting things that there’s already near-identical prior art on (in some cases dozens of patents).