This was the classic case of “in like a lion and out like a lamb.”
Innovatio almost pulled off one of the most innovative patent campaigns in history. In particular, Innovatio negotiated control of an extremely potent portfolio of WiFi patents invented by Broadcom engineers. Instead of using those patents to go after WiFi equipment manufacturers, like Motorola, Cisco, Netgear and others, it went after numerous WiFi end users. Coffee shops, hotels, and other venues all received letters, or even had lawsuits filed against them. And the message was always the same – pay us a nominal sum, like $2500, and all of this pain can go away. This strategy, which had been employed so successfully by Jerome Lemolsen many years ago, paid some early dividends for Innovatio.
Eventually, however, the major manufacturers stepped in. While they raised the usual defenses; i.e., noninfringement, invalidity, etc., they also argued that the patents were subject to RAND licensing terms due to Broadcom’s participation in various standards processes. It was this argument that eventually caused Innovatio’s case to explode. Back in October, the Court ruled that Innovatio’s patents were subject to RAND terms, and set a very low royalty per device. The settlements began to role in shortly thereafter. Instead of the billions it was hoping to garner, Innovatio ended up pulling in a few million dollars.