Tuesday, April 1, 2014

PKI Digital Signature company acquires patent license

In a prior blog posting about our patent licensee who is in an unrelated marketplace of instant income verification, we discussed much about how patent law works.

Today, we will discuss a "tangentially related" competitor in the marketplace.  In the European Union (EU), so-called "advanced" electronic signature laws tend to favor solutions built on public key infrastructure (PKI), just like myriad antiquated U.S. state laws prior to the U.S. E-Sign Act of 2000.  Adoption of electronic signatures has suffered in the EU because such solutions are harder to deploy, just as they are in the U.S.

The EU has an advantage in that many of its countries are much smaller than the U.S., and they are able to roll out government-based electronic IDs that are built around a PKI.  This more closely mirrors how our states are able to issue driver's licenses, though no state offers an eID.  Of course, the EU still suffers with interoperability across national boundaries and other issues in this regard, but the U.S. is unlikely to adopt a federal eID anytime soon as we've never had a national ID.

Our recent patent licensee is a software vendor in the United Kingdom that offers a PKI-based server platform with a web front end for the purpose of electronically signing documents.

While they make use of a PKI, their web users in particular are able to effect electronic signatures built on digital signatures on the server alone, without the users on their web browsers having to download software, generate/manage encryption keys, exchange keys, etc.  Under that scenario, our patent came into play, and so they purchased a license that covers both their server product and the web-based front-end product that is also operated as a service (SaaS, web site).

With the patent license, the company, its investors and all of its customers are fully protected. That's a smart business decision.

We were able to negotiate a fair one-time royalty on favorable terms to them because they approached Yozons and concluded a license agreement quickly and professionally.   Naturally, royalty rates are higher for those who do not willingly purchase a license, with the highest rate for those who must be sued into compliance.

1 comment:

  1. Negotiating patent licenses is cheaper than possibly losing a $120 million plus legal fees and wasted time. Waiting to settle with lawyers will result in higher royalties plus legal expenses. Risking your business in court is the most expensive route.