Based on an article that I had previously posted some time ago, PTSC's attorney had said "if there are two owners of a patent one cannot sue for infringement without the other" (see below). If Moore is successful in breaking ties with TPL and he becomes the owner of the MMP along with PTSC, how then could either PTSC or Moore sue without the other? If one or the other tried to negotiate a license and the potential licensee knows there are two owners, why wouldn’t they just refuse to sign a license knowing that they couldn’t be sued unless Moore and PTSC jointly filed suit. If this is the case it would seem that unless we somehow became partners with Moore, things could become worse before they are better. Comments any one?

What Is Patriot's Game?

A minor player in the microprocessor industry is suing big users of Intel's chips for hundreds of millions, but it can't even get in the courtroom door

BY Linda Geppert // July 2004

7 July 2004--You may be forgiven for never having heard of Patriot Scientific, of San Diego. The seven-person firm has been losing money for more than a decade and has made an unremarkable journey from being a developer of ground-penetrating radar to being a minor microprocessor designer. But along the way, it believes it picked up the ownership of the clocking technology that runs nearly every microprocessor operating faster than 120 MHz--a cutting-edge speed way back in the early 1990s. The company estimates that US $18 billion worth of chips with its technology were sold in the United States last year alone.

In the last several months Patriot sued five Japanese electronics giants for hundreds of millions of dollars and has told more than 150 other companies that their products might be infringing on Patriot's patent. But during its quest for cash the company discovered that it may not have full control over the patent after all. The technology's coinventor, software maverick Charles H. Moore, and his representatives may have the power to block the company, potentially preventing a river of money from flowing from some of the best known computer companies to Patriot.

The clocking technology at issue allows today's microprocessors to run at multigigahertz speeds. Typically, the microprocessor gets its external clock signal from a crystal oscillator on the motherboard that runs at about 100 megahertz. This relatively slow speed is needed, because it is difficult propagate a signal with a frequency higher than 200 MHz over the distances found on a circuit board. But the microprocessor itself can run much faster. So microprocessors use an internal clock that runs many times faster than the external clock yet remains synchronized to it. U.S. patent 5809336, or '336 for short, assigned to Patriot, describes the internal clock scheme.

Very much out of the holiday spirit, Patriot filed the first set of lawsuits on and around Christmas Eve (24 December) 2003. They go after five electronics manufacturers--Fujitsu Computer Systems, Matsushita Electric Corporation of America, NEC Solutions, Sony Electronics, and Toshiba America--for patent infringement. According to Jeff Wallin, Patriot's chief executive officer, the company first asked the five companies to license the technology covered by '336. "There was a good deal of communication with a number of companies before we took the actions that have been publicized significantly over the last few months," he said. "And when we were unable to make any progress with licensing, then we filed the lawsuits against them."

One thing all the defendants have in common is the use of Intel microprocessors in their products. And so Intel Corp., Santa Clara, Calif., filed suit against Patriot, asking the court in February to declare that it is not infringing on the '336 patent. The Intel suit argues that since Patriot is suing Intel customers, it is reasonable to assume that it will "initiate an infringement action against Intel should Intel continue to manufacture and sell the accused microprocessors."

But whether Intel and all its customers will have to pay Patriot the millions it is requesting hinges on the resolution of a yet another suit by Patriot. This one began in March with the aim of determining once and for all who invented the technology behind '336. And, says Patriot's lawyer, Russel "Cap" Beatie, "you can't understand anything unless you understand this lawsuit."

The technology behind '336 comes out of a microprocessor architecture called Sh-Boom, which Charles H. Moore (also the inventor of the Forth programming language) and a colleague, Russell H. Fish III, designed in the 1980s. Back then, of course, ICs ran at a much slower speed--well under 100 MHz. Even so, the two inventors realized that their microprocessor was capable of running at much higher frequencies than an external clock could supply. "Sh-Boom was pretty simple and pretty streamlined for its time and therefore the circuitry ran faster than other contemporary processors," explains industry analyst Jim Turley, who is also a technical advisor to Patriot. "So it follows that the inventors came across this problem sooner than others might have."

Moore and Fish submitted the patent application for their Sh-Boom microprocessor to the U.S. Patent Office in 1989. But the patent officer evaluating the application wanted it broken up into many smaller patents, each of which should cover one element of the design. "A number of patents were eventually issued. And one of those patents--the '336--is, in our view, almost universally used," says Beatie, a partner at Beatie and Osborne LLP in New York City.

Sometime before the granting of the '336 patent, one of the inventors, Fish, transferred his interest in the Sh-Boom inventions to a family trust. The trust sold Fish's interest to a company called Nanotronics, which, in 1994, sold it to Patriot. It is on the basis of these transactions that Patriot believes itself to be the sole owner of '336.

But on the patent itself, there are two inventors listed, not one. And under U.S. law, a patent owned by more than one person cannot be the basis for an infringement suit unless all the owners sue. "If one of them refuses, for whatever reason," says Beatie, "you have a patent that is worthless."

So while Fish, through the trust fund and then Nanotronics, has assigned interest in the patents to Patriot, Moore has not. In fact, says Beatie, Moore refuses to participate in the infringement suit and has licensed his coinventor rights to Technology Properties Ltd., an intellectual property company based in San Jose, Calif.

Moore has been silent on the whole business. And it is Technology Properties' president, Daniel Leckrone, who is "driving the rig," says Beatie. And why won't Moore participate in the suits? According to Beatie, he and Technology Properties "want money, which we are willing to give them. But they want a lot of other, unreasonable things that we won't give them." At press time, Leckrone had not responded to requests for comment.

So the purpose of the suit against Moore, Leckrone, and Technology Properties is to establish that despite what it says on the patent, Fish alone invented the high-speed clocking device. "Fish has made some statements to that effect," says Beatie, "And Moore has made some public statements that tend to support it as well. So we have asked the court in San Jose to give us a declaratory judgment, a ruling, saying that in fact Patriot is the sole owner of the '336 patent."

The company asked for a December trial date. But the judge in the case instead ordered the parties to undergo mediation, much to the annoyance of Beatie, who believes the other side is behaving in bad faith.

In the meantime, Patriot, which lost $3.8 million on revenues of $123000 in its 2003 fiscal year has had to get by mainly on sales of communications products that were phased out in 2002. It is pinning its future hopes on Ignite, the modern successor of the Sh-Boom microprocessor. It sells the device and also licenses a software version of the design to manufacturers of smart cards and handheld wireless devices and expects to receive validation contracts from customers in the near future. According to Wallin, the design provides a smaller area and lower power consumption than other comparable microprocessors.

As to the legitimacy of Patriot's claim of infringement, analyst Turley believes it is not frivolous. "In my estimation it's a perfectly sound patent and seems to be defensible," he says. "Can I predict the legal outcome? About as well as I pick racehorses."