| Intellectual Property |
In its March 2005 financial statements, ParkerVision placed a net value of approximately $8 million on its “Patents and Copyrights” out of a total value of $10M for “other assets”. This number is also presented on the company’s balance sheet, where the total assets were about $42M, and cash represented about 50% of the assets. Therefore, intellectual property represented almost 20% of ParkerVision’s total assets, and almost 40% of its non-cash assets. From the September 2005 financial statement (published November 11, 2005), the total assets had decreased to $27.9M (with $13.3M remaining cash) and the other assets had decreased to $9.4M, with intellectual property representing $8.7M. Therefore, the patents represented 31% of the total assets, and 60% of non-cash assets! The company therefore places significant value on its intellectual property relating to the ESP platform and D2D/D2P technology. However, to date, ParkerVision has only consummated a single licensing deal with Symbol Technologies (a 6.5 year agreement signed in 1999), and no Symbol products have been marketed under the D2D name to date. Furthermore, it appears that the last payment made to ParkerVision by Symbol was in 2004, and that the relationship ceased to exist long before the license expired. It appears, however, that not only is the size of the portfolio questionable, but the novelty of the ideas in the patents is dubious, and the enforceability of the patents is uncertain. Given ParkerVision’s expenditures of several million dollars in creating its intellectual property portfolio, one can only wonder what business rationale was used to approve such an investment. Is the number of patents overstated? We highlight several recent claims by the company regarding its portfolio:
“The Company has obtained 59 patents related to its D2D technology and has over 90 patent applications pending in the United States and other countries. The Company estimates the economic life of its patents to be fifteen to twenty years.” We summarize the following statistics for ParkerVision assigned intellectual property holdings at the time of the 10K release. Note that these numbers are the direct result from searches done on January 8, 2006, with no further triage. It should reflect patents that were issued and published with 100% accuracy, and patent applications filed before June 6, 2004 with 100% accuracy.
There is a substantial difference, over one year after the announcement in the number of patents awarded and pending. The difference is 75 versus 130 in the product descriptions, and 149 in the 10K statement. The ParkerVision number are greater by a factor of 2, which represents a material difference. Even in January 2006, ParkerVision only had 25 + 6 = 31 published
patents worldwide on D2D technology. We do not understand
how ParkerVision can substantiate its claim of 59 issued patents. Furthermore,
five patents issued in 2005, so that at the time of the 10K report,
there were only 26 issued patents! The only way in which we can rationalize this discrepancy is that ParkerVision double counts international applications based on title changes or corrections. The same patent application can appear to have two to six different suffixes for the same number. Clearly, this approach can lead to a misinterpretation of the size and value of a company’s portfolio. For 2004, we counted 138 published patents and applications using the inflated approach. Of these, 44 related to the video business which was sold. Therefore, we counted a total of 94 patents and applications in D2D technology with the inflated approach. We note that again, our results are far from the D2D portfolio claiming 149 items in the 2004 10K report or the 130 items in the product description. Is ESP/D2D/D2P technology novel? However, the novelty of patents can be assessed by considering the prior art. We present the observations of a skilled radio frequency engineer, who built his first FM receiver in 1979, has read papers on switched capacitors and charge coupling since the early 1980s, and has reviewed papers for engineering journals since 1987. He has encountered many genuinely novel radio concepts that are published and patented every year. He assessed the
novelty of two early ParkerVision patents, specifically U.S. Patent
Numbers 6,813,485 and 6,091,940. In both cases,
he was able to identify significant prior art. Some of the
claims read as prior art, and many of the drawings of the invention
appear very similar to radio frequency converters existing in the
prior art. In his opinion both the ‘485 or ‘940 patents
do not appear to contain new ideas or novel configurations. In
fact, many figures that describe the inventions can be found in
the literature prior to 1997. Therefore, the connections and configurations
of these devices do not appear as anything new. Worse, it
appears that well-known circuits were “redrawn”, and
new terminology for existing RF circuit design concepts was created. Are the patents even valid? The
relevance of the prior art to the patented invention or inventions
covered by the claims of each issued patent, is unclear. Of
the 600 citations, about 344 were US and foreign patents, 59 were
ParkerVision press releases, 228 were technical citations (of which
one quarter comprising papers by Enric Vilar, whose work relates
to the impact of atmospheric conditions on satellite communications,
rather than on the wireless technology!), and the remainder were
miscellaneous.
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