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What BT did not say about its possible relationship with NPE Steelhead Licensing

Over on TomsHardware.com there’s a story that looks at the links BT may or may not have with Steelhead Licensing, an organisation which is currently in the process of suing a Who’s Who list of telecom companies over their alleged infringement of a US patent covering “Mobile radio handover initiation determination”. The patent was originally issued to BT back in 1996, but a transfer to an entity called FTE Exchange was recorded at the USPTO in December 2012 and a further one to Steelhead earlier this month.

The author of the article speculates that Steelhead may have been established by BT, but says that the company was not returning calls. However at the end of the piece, the following note has been added:  “BT has reached out to us to clarify the situation. A rep for the company stated, "BT sold all of its rights to the patents last year. We have no involvement in Steelhead Licensing LLC’s litigation activity”.”

Late in 2012, it emerged that BT is using patent privateer Suffolk Technologies (spookily, the English county of Suffolk is home to the company’s main R&D facility) to monetise patents that are currently being litigated against Google and AOL. There is nothing in the statement the company has made to TomsHardware.com that rules out the same thing happening with Steelhead Licensing.

It is quite possible that even though the company has sold the rights to the patents it is still getting a pretty decent kickback from any future revenues they might generate.  After all, only last week Unwired Planet announced that it had “entered into a patent purchase agreement with Ericsson” which saw the Swedish company transfer “2,185 issued US and international patents and patent application” to it. On further inspection, it turned out that Ericsson had actually maintained quite a bit of skin in the game.

Though the terms between BT and Steelhead may not be the same – especially as it is quite possible BT actually helped to set the NPE up – the principle underlying the relationship between the two quite probably is: it is easier and more convenient, for any number of reasons, to get a third party to litigate your patents for you than to do it yourself.  It’s why the privateer model has become so popular.

That said, should the rights have been sold to Steelhead with BT standing to gain nothing from a successful enforcement strategy, then BT shareholders will want to be satisfied that the company raised a healthy sum from the transaction. If they are not told how much, they should certainly ask.


Joff Wild
IAM Magazine
18 January 2013

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Licensing, IP litigation, Patents, IP business

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