Milestone Sues Hawk

Author: John Honovich, Published on Jul 18, 2014

Last year, an inventor / troll said they were going to sue end users for violating a patent they have on video surveillance technology.

Now, they have fulfilled their promise with 28 lawsuits this year. However, Milestone Systems has struck back, suing Hawk.

In this note, we examine what is happening.

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Comments (27)

"Even if Milestone wins, this most certainly would only apply to their products and would likely require each manufacturer to replicate Milestone's actions." Yes, but it would make it easier for other manufacturers to defend themselves if Milestone wins, since they'd have a case to cite. But then it could work the other way if Hawk wins.

I guess Hawk didn't realize Milestone would suddenly gain very big pockets.

Given that Hawk seems to be suing a wide array of companies / products / systems, I am not sure if that's a major factor in their lawsuit selection process.

Btw, from what I have seen from other large manufacturers is that they are less likely to want to litigate over small things like this, simply because the cost of litigation is more than the (likely) modest payment they would make to have this go away.

My experience with truly big companies is that they always fight, without exception (and rarely lose). A large company can get filed on weekly and once you start to settle, it's like chummning the waters. Companies that size have departments of lawyers dedicated to gathering, licensing and defending patent claims, so they see the legal cost as part of doing business.

Look at the OV litigation. Essentially everyone folded, and especially the big corporations - it's a who's who of settlements - Bosch, Sony, Pelco, Tyco, etc. Jeez, Axis signed an agreement even before being sued.

Companies that size do have departments of lawyers but it also costs a lot of money to use them so unless the patent represents some catastrophic risk to their core business, it tends to be economically better to settle than fight.

Does the recent Alice v CLS Bank decision apply here?

To recap that decision:

"The patents were held to be invalid because the claims were drawn to an abstract idea, and that implementing those claims on a computer was not enough to transform that idea to a patentable invention."

It was only handed down less than a month ago, so I don't think it has yet made an impact on this case / patent.

A federal court threw a patent out just a few days ago, citing Alice. Hawk's patent seems about as detailed as the now-invalid patent, it seems to me. But of course I'm not a judge.

Does Hawk have any tangible/intangible products on the market or just conceptual ideas? Pardon my ignorance on the subject.

I am not aware of any surveillance products offered / made by Hawk.

A major side story we should all be concerned about.

This could wipe out Case Studies, PR write-ups, news articles, and possibly end users making their names public on bids if that is possible. Or it will be unnamed end users in all of the above.

If you read the lawsuits, Hawk got the end user information from Milestones Case Studies on their website and etc..

What end user wants to be named in Court Cases even though they were not found guilty?

Jeremiah, thanks for raising it. It does appear that many of the end users were found from case studies :(

It depends on how wide known, how impactful these suits become if it has a chilling effect on case studies.

This could wipe out Case Studies, PR write-ups, news articles...

Bad news for those in the Puffery Profession!

Given that the original suit was lawfully dismissed, Hawk should tread very lightly at this point. Everyone who can read and reason already knows the outcome of these cases. They too will be dismissed. It would seem to me that Hawk is making itself vulnerable to a malicious prosecution suit, and at the same time, giving themselves a black eye in the industry. "He will win who knows when to fight and when not to fight" -Sun-Tzu.

Mark, ultimately, to make it stop completely, the patent would need to be invalidated.

Btw, I don't think giving themselves a black eye in the industry is, in any way, a concern for them :)

Well, they aren't really in "the industry". They exist only to sue companies for violating their phony-baloney patent. I doubt they're worried about someone not buying a Hawk camera over this because Hawk cameras don't exist and never will.

But I like your idea about a malicious prosecution lawsuit.

... their phony-baloney patent.

You do understand that even if they were proven 100% troll that would have no bearing on the validity of the patent?

Although trolls they be, these trolls don't fit the classic mold, since they themselves created the patent and did not acquire it. It was not a after-the-fact patent based on getting to the PTO first based on someone elses product. In addition, it was not a trivial or obvious invention, at the time at least.

IPVM background:

That the patent is from 1995 is quite important. This is quite early even for digital video surveillance. For instance, the first network camera did not ship until the next year (1996). Companies often look to invalidate patents based on prior art but finding such from the early 1990s will be quite difficult.

1995! Had you been a Judge back then, would you have laughed at them and their lunchmeat challenged patent?

As for whether a Malicious Lawsuit action would prevail, I actually do think it would, but only as a counter-suit to yours.

I apologize for being unclear. I was opining that I don't believe a concept should be patentable, only a process or invention. Should you be able to patent the ideo of transferring video files via telepathy, and then sue someone who figures out how to actually do it? I don't believe you should be able to.

I am in agreement with you, though I'm not sure sometimes how to tell the good from the bad when it comes to software patents.

Back when the commercial web was in its terrible two's or so, I myself was employed in the city, by a certain book retailer that you may be familar with. We had just launched version 1 of our site, and were quite enamored with it, though this was due to the effort more than the actual result really.

I can remember when the CIO told the team that Amazon was trying to patent 1-click ordering. We all laughed about how if they are successful then fine; we'll just patent the cursor and be done with it.

Then he had us change the name of our one-click ordering, pretty soon we were changing it altogether to add another click.... We were stunned to say the least.

Consider the fact that you could say Bezos did more than just patent a concept, he could show you his website... But that doesn't make it right...

Without commenting on the validity of Hawk's patent infringement claims, this does bring to mind something I have found preposterous for many years. The US PTO has been in the practice of issuing many, many thousands of "software patents" every year, for a long time now. Are we really to believe that there are thousands and thousands of new programming breakthroughs EVERY YEAR that are so unique, so innovative, that they warrant a new patent being issued? Ludicrous, in my (less than) humble estimation. Sounds more to me like a patent is issued to every entity that produces a few lines of code and is willing to toss a few grand at a patent attorney to file the application. Perhaps that is partly why Hawk has chosen to go after end-users (aside from the obvious benefit to them of putting the vendors who supply those customers back on the hot seat in order to try to gain a settlement.) In a way this case reminds me of the fellow who patented the first windshield wiper delay circuit, and then began shopping it to car manufacturers. As I understand it, they all turned him down, yet within a couple years every new car on the road was suddenly arriving with a cool (and incredibly useful) new windshield wiper delay function. He then spent the next couple of decades (and, I heard, most of his life savings) trying every legal angle imaginable to try to recoup some of what he felt he was due because of his patent. Royal screw job? Perhaps - I don't know any of the actual legal details of any of the cars, and I am not a patent attorney by a long shot. But I see Hawk facing the same uphill battle in this case, which probably also explains why they are suing a long list of end users - their shortest path to a payoff is in hoping for some settlements in lieu of lengthy, expensive litigation.

...their shortest path to a payoff is in hoping for some settlements in lieu of lengthy, expensive litigation

Or in fiscal preparation of long, expensive litigation. As in: Win a few small cases, build a war-chest, then go after the big ones.

About time they fought back!

Given that Hawk dont even have a functional website it seems pretty obvouis that they have no interest in becoming an industry player and just want to profit from litigation. I'd love to know the real story behind how they came to patent multi streaming, whoever patented it must have been from the industry, probably working for a manufacturer or developer at the time, the US patent system is badly broken IMO - Phil

that they have no interest in becoming an industry player and just want to profit from litigation...

That's true, but how would they go about it, at this point at least? If they just used 'their' multi-streaming, without suing, now they be so far behind everyone and not have anything different to offer...

The real 'bluff' would be if all the defendants were to negotiate a deal where they would agree to stop infringing on Hawk ASAP (without paying anything), and in return Hawk would drop all claims. Then theoretically Hawk would be the only one with multi-streaming, and could then develop a product that would have at least some advantage over everyone else. But they can't start to be a player (even if they wanted to) until they get money or get everyone to stop using multi-streaming.

As for the 'inventor', I don't think he was from the security industry, more from IT. But as has been pointed out the surveillence industry was nothing like it is today in terms of tech. This is 1995, before the marriage of cctv and ip, and I wonder if anyone on this site would have been familiar with even single streaming back then...

A troll is a troll. We all recognize it as such but until the regulations governing realistic patent issuance and safeguards are enacted to restrict such behavior as patent trolls display I don't see the industry has any choice other than aggressively prosecuting countersuits. Don't tease the large doggie, children. Canon may well decide to demonstrate its committment to it's new sub and through substantial $ at it to make a clear statement. As a legendary military strategist once observed, that in order to get the word out, once in a while you need to shoot a colonel.

I'd just like to point out that if the original patent was filed in 1995, then it will expire next year anyway . . . . . .

Alastair, that brings up an interesting point. Although the statute of limitations in patent infringement gives the owner 6 years after the date of the violation to file, there is also the doctrine of laches to consider. From uslegal.com

Laches is the legal doctrine that an unreasonable delay in seeking a remedy for a legal right or claim will prevent it from being enforced or allowed if the delay has prejudiced the opposing party. The doctrine is an equitable defense that seeks to prevent "legal ambush" from a party who is negligent in failing to timely make a claim. It recognizes that the opposing party's ability to obtain witnesses and other evidence diminishes over time, due to unavailability, fading memory, or loss. Disallowing the negligent party's action on the ground of laches is a form of estoppel.

It would seem the the big VMSes could appeal to this doctrine, among other defenses. That would also be another reason to target the end-user, because they presumably would not have been infringing as long, and also because they would be harder to identify as infringers. That would limit the applicability of laches as a defense.

Though by suing the end-user Hawk is still eyeing the mfr. since, I would guess that Hawk would like nothing more than to settle with the manufacturer in one-shot, in return for not pursuing its customers. Here is an article from ipwatchdog.com, regarding how the statute of limitations and doctrine of laches apply in patent law...

I think you'll find a lot of prior art in the motion picture industry with the development of the MPEG standard.

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