http://chipstockblog.com/article/7960

This is not new news, but it is an interesting article, and one I had not seen. If it was posted earlier, I apologize.

tps

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The Microcap Speculator submits: Everyone’s favorite patent licensing company, Patriot Scientific (ticker: PTSC), recently announced a series of critical procedural victories in its ongoing infringement litigation against Japanese heavyweights Matsushita (ticker: MC), Toshiba and NEC (ticker: NIPNY).

First, a little background. Patriot Scientific and The TPL Group own a group of microprocessor patents known as the Moore Microprocessor Portfolio (MMP). These patents are managed and enforced by Alliacense, a TPL subsidiary. Many large companies have licensed the patents, including Intel (ticker: INTC), AMD (ticker: AMD), HP (ticker: HPQ), Casio and most recently Fujitsu.

Four Japanese manufacturers refused to negotiate a patent license, so TPL sued them in California federal court (on behalf of both TPL and Patriot). The suit dragged on as lawsuits often do, with the California federal court doing little to push the parties towards trial. This was great for the defendants. Indefinite delay was the next best thing to outright victory for them. Plaintiffs have the opposite incentive — they want cases resolved quickly so they can collect their judgment if victorious, force a settlement (as happens much more frequently than trial), or move on if they lose.

With no end to the procedural delays in sight, TPL made a bold move. It voluntarily dismissed the California litigation and brought a similar patent infringement suit in a Texas federal court where the judges had a reputation for moving cases along quickly (commonly referred to as a “rocket docket” jurisdiction). The four defendants countered by filing “declaratory judgment” actions in California and North Carolina. Those lawsuits aimed to have the same dispute — whether or not the Japanese defendants infringed MMP patents and the validity of those patents — determined by other, slower courts.

Thus, late last summer the battle lines were drawn. The parties filed motion after motion attempting to have the litigation heard in the court of their choosing. TPL and Patriot won. The Texas federal court will hear the patent infringement actions, and the declaratory judgment cases are stayed (on hold) until the Texas case is finished.

TPL and Patriot now have a decided edge. The case will move forward, not in a matter of years but a matter of months. One of the defendants, Fujitsu, recently jumped ship and settled. The remaining defendants have a serious decision to make: either they negotiate similar settlements, or see this litigation through to a jury trial (probably within a year) and an appeal (perhaps another 7-8 months). The third option, delay, has been taken off the table.

DISCLOSURE: I have no position in PTSC.OB. Not a recommendation to buy or sell any security. For informational and educational purposes only.