Was the $530 million patent judgement against Apple predictable from citation analysis? Who else might be at risk?


NPE patent owner Smartflash LLC has just won a $532 million judgement against Apple , on the back of three patents filed for Data storage and access systems being:

Which Smartflash alleged were infringed by Apple’s iTunes’s system, and which the jury confirmed.

There will no doubt be extensive evaluation of the case elsewhere, and Apple have planned to appeal, but being patent citation analysts we wondered:  

1) Would this relationship between these 3 patents and Apple have been obvious from analysis of the forward citations of this patent. 


2) Who else might be at risk? 

And the answer to the first question? Yes and no.

If you were to use traditional citation analysis, the answer would be no. Google lists nine forward citations for the first listed US7334720 patent , five of these to Smartflash itself and three to Microsoft. Neither of the later two patents have any forward citations at all.

But it is possible to do much better than this. Recently Ambercite has developed advanced patent citations analysis techniques including:

This concept is shown in the image shown below



In this particular case, it was straightforward to enter the three Smartflash patent numbers into our patent cluster searching system, and look for both direct and indirectly connected patents with the strongest licensing potential (and filed after the Oct 1999 priority date of the Smartflash patents). We limited the results to the top 4500 direct and indirect forward citations. This analysis took about 10 seconds to run and does not require any specific industry knowledge or risky assumptions about keywords. 

And what did we find?

The three patents with the highest individual licensing potential were:

  1. US6553413Content delivery network using edge-of-network servers for providing content delivery to a set of participating content providers, filed by MIT in the year 2000 (but with an earlier priority date), with a Licensing Potential value of 13.8
  2. US6658588Trusted infrastructure support system, methods and techniques for secure electronic commerce transaction and rights management, filed by Intertrust in 1999 and with a relative Licensing Potential of 11.4
  3. US7689510Methods and system for use in network management of content, filed by Sonic Solutions (now Rovi Corporation) in 2005 and with a Licensing Potential of 10.7

But Licensing Potential values only tell part of the story. As we work our down this list, the owners of the forward citation patents with high Licensing Potential are also critically important – ideally these should be companies that might have commercialised the technology in question.

And indeed near the top of the list we see patents filed by a variety of owners including Nokia, American Express – and Apple.

In the latter case, Apple filed US7765623 in 2002 for an Intelligent interaction between media player and host computer, which if you read it appears to describe the iTunes system. This patent has an estimated licensing potential of 5.6, which put it in 35th place on our list of 4500 direct and indirect forward citation patents.

Altogether we identified 19 separate Apple patents in the list of 4500 direct and indirect forward citations, enough to give Apple a total Licensing Potential value (from the three Smartflash patents) of 42.3. This is not as high as the aggregate licensing potential of 462 to ~ 240 separate Microsoft patents (followed by 169 to 56 American Express patents), but enough for Apple to be recognised as a top 20 candidate for licensing the three Smartflash patents.

Other well known companies in the top 20 list (as ranked by total Licencing Potential for each patent owner) include:

  • Amazon
  • Sony
  • Panasonic
  • Ticketmaster
  • HP
  • Nokia.

Other companies in the top 100 list include 

  • Yahoo
  • Samsung
  • Panasonic
  • Mastercard
  • Red Hat
  • Google 
  • Ebay
  • Citibank
  • Qualcomm
  • Cisco

This helps to answer the second question we posed above:  2) Who else might be at risk? 

This information is more than trivia because, according to Arstechnica, Smartflash has commenced litigation against Samsung, Google and Amazon in the same East Texas courtroom that produced the Apple verdict. After discussions with Smartflash, Arstechnica reported that  ‘Smartflash have made clear they believe they’re owed money for practically the entire world of digital content.’

Which is something that you would not see from a conventional citation analysis at all. Of course forward citation analysis is only the start of the patent assertion/licensing process, but it is still very valuable at being able to rapidly suggest where licensing opportunities may lie – and with the Apple patent we found also suggesting which technology should be investigated.


About Cluster Analysis

Cluster analysis is now being used by patent owners worldwide for invalidity, licensee and FTO searching and will soon be available in online and API (Application Programming Interface) and bulk ‘smart data’ form. Please contact us if you are interested in further information.


Post-script – what is the prior art landscape for the SmartFlash patents?

Using very similar principles to the above, we explore the question further in the blog found here.

Read More