BU reaches settlement with tech companies on patent infringement case

The patent infringement lawsuit Boston University trustees filed against a number of technology companies, including Apple, Inc., Microsoft Corp., and Sony Corp., has reached a settlement, officials said.

“We reached an agreement in principle,” said BU spokesman Colin Riley. “The terms are confidential, but the next step is that we ask the court to dismiss cases against the companies … They are now licensing the use of that patent and paying for it. We’re very happy and delighted to have resolved this through an agreement.”

The complaints, which were filed throughout 2013, stipulated that 25 technology-based companies, including other big names such as LG Electronics, Inc., Hewlett-Packard Company, Amazon.com, Inc. and Samsung Group, illegally used a patent for insulating films developed in 1997 by BU electrical and computer engineering professor Theodore Moustakas.

BU trustees were represented by patent law attorneys at Shore Chan and DePumpo LLP, a law firm that specializes in litigation and intellectual property licensing, Riley said.

“We had the firm essentially look to determine that there was an infringement,” Riley said. “Once we had the information that was filed with the complaint, the attorneys that specialize in patent law made the case that got the attention of all the companies named in the complaint.”

The patent, officially named U.S. Patent No. 5,686,738, or “Highly Insulating Monocrystalline Gallium Nitride Thin Films,” is allegedly used as a part of products that include blue LEDs, such as Apple’s iPhone 5, iPad and MacBook Air, according to the complaints.

“BU certainly thinks that these companies were infringing, and BU certainly had its evidence that a technology that was developed by Moustakas was being used by a lot of LED manufacturers,” said BU School of Law professor Michael Meurer, who specializes in patents. “BU apparently had a good argument.”

Reaching a settlement before delving deep into a case is a common resolution among patent lawsuit cases such as this one due to the sheer amount of money required of both sides to hire patent representation for cases that often last multiple years, Meurer said.

“Probably 97 percent of patent lawsuit are settled, so this is completely normal,” Meurer said. “… Once they get into court, neither side wants to pay multimillion dollars in patent litigation … The defendants, just like the patent-owner, think that settlement is the best thing in terms of just being a sensible business decision. Everybody feels pressure to settle, whether you’re the patent-owner or the defendant.”

The majority of the defendants, who were represented by San Francisco-based patenting firm RPX, are permitted to continue using the product in exchange for paying an undisclosed sum to BU.

“All of the companies that received a license from RPX, the party BU was negotiating with, are free to continue making the products that they’ve been making,” Meurer said. “In exchange, they have to make some form of payment to BU. There are a few other parties that BU targeted that could not get the benefit of the settlement with RPX, so I assume that there is still ongoing negotiation with some manufacturers.”

Riley said RPX will pay the licensing fee for the companies it represents.

“It’s been resolved with regard to those defendants.” Riley said. “That’s how this firm that acquires patents works. They pay us a licensing fee so that the members of that firm can then use the patent.”

Although the numerical sum of the settlement remains confidential, it is common among patent infringement cases to leave the settlement amount undisclosed, Meurer said.

“It means more money for BU,” Meurer said. “The amount of the settlement payment was not reported. That’s pretty common. Hardly ever is the magnitude of the settlement payment reported. Is this a big deal for BU? I can’t really tell.”

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