Did a patent dispute squash Orlando's early-2000s tech industry — or was it all a pipe dream?

Tech crunch

Did a patent dispute squash Orlando's early-2000s tech industry — or was it all a pipe dream?

Mention patent law at a dinner party and you're likely to see eyes around the table glaze over. But the patent system undergirds modern U.S. technology — everything from software to the physical mechanics that make smartphones work. In the early aughts, a Florida-based company thought it was going to bring the growing technology economy to Orlando. But two decades and two patent lawsuits later, those dreams have all but evaporated.

Around the time boy bands were topping music charts, cell phone technology was on the verge of a revolution. Clunky devices that could double as doorstops were on their way out. Technological breakthroughs meant phones became pocket-sized, and this is where Jeff Parker says his company ParkerVision came into the picture.

"We enabled the smartphone to have the high data rates and the worldwide coverage and the reasonable battery life that we all take for granted today," Parker told Orlando Weekly, "without growing the size of the phone or making smartphone companies eliminate features."

In the late 1990s, ParkerVision entered into discussions with Qualcomm, now one of the largest wireless technology companies in the world. It looked like Parker's company was going to kick into a higher gear. Although it's based in Jacksonville, the company began leasing a facility in Lake Mary in 2000.

"I'm looking at this thinking, we're going to be a 1,000-person company," Parker said. "This is going to be fabulous. We're going to bring all kinds of people from all over the world. People aren't going to just be visiting Orlando because of Disney and the vacation."

Orlando is home to one of ParkerVision's top engineers. The company's Lake Mary design space was more than 17,000 square feet. Parker imagined recruiting talent from the Space Coast.

But the dream came tumbling down in lawsuits and patent disputes that the company is still fighting today.

Mention radio frequency receivers at a dinner party and it's likely to cause even more glazed eyes than patent law. Here's a simplified version of the technology that led to the fallout between ParkerVision and Qualcomm.

Innovations in radio frequency technology — how our cell phones send and receive signals that are then converted into data — is a large part of why phones are so ubiquitous today. One of the key developments in the past two decades has been converting signals more efficiently. In old analog hardware, like radios from a century ago, sending and receiving signals was constant work and required bulky mechanics to do the job.

Parker says his company's energy sampling technology, which "samples" slices of radio waves rather than converting the entire signal, offered an elegant solution while also cutting down on noise. And all of it was easily achieved by a small chip.

"One of the most interesting parts of our story is the lead inventor [David Sorrells] who developed this was not classically trained in radio frequency technology at all," Parker said. "In fact, he doesn't have a formal college degree."

In internal emails later revealed during their first court case, Qualcomm employees praised the technology's potential.

"This is virtually the holy grail of RF receiver designs — achievable within practical limits!" One employee wrote in 1998 after ParkerVision approached the company about licensing the technology.

"FYI. [T]his is critical technology that we must land based on what we have seen so far," wrote another employee in a 1999 email to Qualcomm co-founder Irwin Jacobs.

The two companies seemed to be on the path to partnership. Qualcomm was not yet the massive company it is today, although it was riding its own wave of early-'90s innovations in mobile phone technology. Because of growing competition, the company restructured in 1998. The next year, Qualcomm's stock rose 2,619 percent, turning some of its southern California investors into "quillionaires."

Negotiations between ParkerVision and Qualcomm eventually soured.

According to ParkerVision, the first technology Qualcomm sold infringing on its patent came in 2006. At that time, advances in 3G mobile technology meant cell phones worked faster than ever. Then, in 2007, the first iPhone was introduced and there was no looking back. From then on, smartphones were central in everybody's life. In only a few short years, grandpa would figure out how to text you cringey memes and clown-face emojis. As one of the largest mobile chip providers in the world, Qualcomm was capitalizing on all of it.

By the time iPhones were let loose on the world, ParkerVision's conversations with Qualcomm had long since ceased. But Parker says the discovery of a 2011 academic conference paper proved what he long suspected: Qualcomm had stolen their technology.

"It's complete bullshit," Parker said. "I don't know a nicer way to say it."

That year, his company sued Qualcomm for patent infringement in the Middle District of Florida and went to court in Orlando.

In 2013, a jury agreed with Parker, awarding ParkerVision $173 million in past damages. But the next year, Judge Roy Dalton reversed the decision, siding with Qualcomm.

"There was some initial email excitement," Qualcomm attorney John Scott told Orlando Weekly about the technology. "Some of those emails were used in the first trial and frankly, I think were responsible for the jury verdict. Although it's never clear in the emails: What is the technology that's being touted by the engineers?"

Patent disputes are complicated and jargony, making the jury's job hard. Dalton's reversal in the case came down to inconsistencies in ParkerVision's expert witness testimony. Scott says the judge granted a motion setting aside the jury verdict, "finding as a matter of law that the admissions that we had obtained in that case meant that we did not infringe those patents."

Andres Sawicki, a University of Miami law professor specializing in intellectual property, told Orlando Weekly the judge's decision is unusual. "It's not every day that you see a judge set aside a jury verdict, be it in a patent case or otherwise," he said. "Typically, courts defer quite a bit to juries."

However, he also noted that these kinds of cases can be hard to untangle.

"Qualcomm's main argument, it seems, is that the ParkerVision patents are the kind of technology that anybody working in the field at the time would have been able to figure out without a great deal of trouble," Sawicki said.

In patent law, this concept is known as prior art, which helps determine whether an invention is novel or not obvious enough to be patented. With companies racing to find ways to make cell phones smaller and more efficient, the components to build ParkerVision's technology may have already been in the air in the 1990s.

But Sawicki says there's another side to this concept. "We often have in the patent law space this legal fiction where we think of the inventor sitting in his lab with the whole universe of information in their field pinned up on their wall. And obviously it's unrealistic."

ParkerVision has had its share of skeptics over the years, even fueling online beefs. A now-defunct website called PV Notes (run by "a group of Silicon Valley entrepreneurs with extensive technical and business backgrounds brought together by the outrageous claims from ParkerVision") was dedicated to picking apart the technical details of the company's technological claims.

There are also skeptics of its business model. Joe Mullin, Mark Cuban Chair to Eliminate Stupid Patents at the Electronic Frontier Foundation, says ParkerVision hasn't reported revenue from products since 2006.

"Public records show that ParkerVision doesn't produce any goods or services and instead makes money through patent lawsuits," Mullin told Orlando Weekly. "And patent assertion entities like ParkerVision exploit our broken patent system, they kill jobs, and they hurt small businesses."

Mullin says with a system that tilts toward patent owners, suing over patent infringement is big money. Last year, 87% of high-tech patent lawsuits in federal courts were filed by entities that got most of their revenue from patent licensing. Mullin says these "patent trolls" often use the cost of litigation as leverage. Going to court can cost millions of dollars.

"There's also a pretty big contingent of once-upon-a-time businesses that, like, had a thing once that had a small number of sales, or no sales," Mullin said. "Then it kind of flipped and what was left were patents. And some of them are able to continue to litigate those patents for a long time."

Parker refutes Mullin's claims, saying his company "relies on the patent system to protect its investment of hundreds of millions of dollars invested in inventing, developing and licensing the cutting-edge, proprietary radio-frequency (RF) technologies that have enabled wireless solution providers to make and sell advanced wireless communication products."

And despite his years of pursuing justice in the courts, Parker is no fan of the lawsuits either: "We could be building more products, more technologies, employing lots of engineers. But instead, all of our money is going to litigation."

Others believe there could actually be value in giving people the ability to work on new technologies without bankrupting themselves.

"When we're going to be investing in innovation, we don't know in advance which paths are going to be successful and which ones are going to fail," Sawicki said. "And so one thing we're going to want to do is create a mechanism for people to be able to monetize even their less successful efforts."

Legal battles between the companies continued to chug along after Judge Dalton's 2014 decision, with challenges in the Patent Trial and Appeal Board, a federal board that was created to settle patent disputes outside of the regular court system and for far less money than litigation. Each side notched wins with the board.

Then, ParkerVision and Qualcomm were back in an Orlando courthouse over yet another patent dispute in 2020. The pandemic delayed proceedings but in March of this year, Judge Paul Byron, who believed a jury wouldn't be able to understand the technology, ruled in favor of Qualcomm. ParkerVision has appealed the case and the appeal is likely to get underway next year.

The years-long struggle raises many questions, not least of all how the patent system can work better.

Mullin says there are a number of options. Strengthening the Patent Trial and Appeal Board, better known as the PTAB, is one avenue. Established under the America Invents Act a decade ago, its sole purpose is to determine whether a patent is valid or not and keep these cases out of the legal system. Mullin says it's been especially effective at limiting patent trolls' damage on the system. But he adds that the Trump administration has undermined the PTAB, leading to a growing number of cases thrown out on technicalities.

Mullin says another issue is the number of patents that the U.S. Patent and Trademark Office grants each year. In 2020, the office issued more than 350,000 utility patents, the most common type of patent. He says it's impossible for the office to give each application (which totaled nearly 600,000 that year) a thorough examination. The PTAB, if strengthened and relieved of loopholes, could be an important backstop for this process. Last year, Sen. Patrick Leahy introduced the Restoring the America Invents Act in Congress to do just that.

Orlando's tech sector still lags behind the national average in employment numbers. But the industry is growing. Between 2015 and 2020, high-tech job numbers in the Orlando-Kissimmee-Sanford metro area grew by 26.8% — three times the national average. And in recent years, there have been some high-profile moves in the area.

In March, Electronic Arts opened its Central Florida office at Creative Village in downtown Orlando. The video game developer has a workforce of about 1,000 employees in the area. The $1.5 billion mixed-use building is also part of the new downtown campus for the University of Central Florida and Valencia College, and houses UCF's game design programs. Building on its gaming prowess and the virtual reality companies that call the city home, the Orlando Economic Partnership has declared the city the center of the emerging "metaverse."

Orlando is also home to other prestige tech companies. Stax (formerly Fattmerchant) has been described as the "Netflix of credit card processing." Its unique approach to credit card transactions has earned the company a valuation exceeding $1 billion, officially making the company a unicorn this year. Stax CEO Suneera Madhani says her company is only the first unicorn to come out of Orlando.

Orlando's newest neighborhood, Lake Nona, is getting in on the tech action, too. A German aviation company is planning to open its first "vertiport" for air taxis in the U.S. in the neighborhood by 2025. (Caveats: The aircraft is still in the developmental phase and only the rich will be able to afford trips in the taxis for at least the first decade.) Lake Nona also is home to self-driving shuttle startup Beep.

All of this fits in with Orlando's plan to be a "future-ready city." (The master plan is also available in a virtual meeting room — Metaverse, eat your heart out.) This was the theme for Buddy Dyer's 2019 State of the City address. In it, Dyer expressed the importance of the tech sector for the city. "Our future success depends on our ability to attract and grow talent, our ability to take advantage of the sweeping technological advancements coming our way." However, with a system out of whack and dispute cases on the rise, Orlando's burgeoning tech industry likely hasn't seen its last patent feud.

Still, who knows? If the tech revolution continues in Orlando, Epcot's vision of the future, which has shimmered for so long just over our horizon, might soon take a backseat to the real thing.

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