SAN JOSE, Calif. – A pioneer of magnetic stripe cards extended its security mechanism for the Internet of Things, hoping to attract licensees for three patents on the approach. The offer comes as patents are coming under cost pressure due to increased difficulties defending them, said one broker.
Jerome Svigals led a 200-person team several decades ago at IBM that created security for magnetic stripe cards based in part on a 40-digit code. The IoT version puts a small solid state device between each device on an IoT network, looking for a similar code, a sender’s device number and send and receive times from a synchronized random clock, said Svigals, who has been working as a consultant and independent inventor since retiring from IBM.
The technique is described in his book on Internet security and defined in three U.S. patents (Nos. 9,319,404, 9,344,437 and 9,432,378). The patent office granted Svigals about 14 patents while working at IBM and 16 patents since he left.
Svigals’ hopes are relatively modest. He aims to recoup about twice the roughly $240,000 he paid to win the patents.
A diagram describing Svigals� U.S. Patent No. 9,432,378. (Image: USPTO)
Low expectations may be appropriate for the current climate. “The pendulum has shifted in favor of the infringer, and it’s relatively easy to infringe and get away with it,” said Alec Schibanoff, vice president of IPOfferings, the broker representing Svigals.
Schibanoff noted the U.S. Patent Office has a relatively new appeal board. Companies that aren’t able to get patents invalidated by a re-examination can still take their case to a trial jury or judge. “The defendant gets multiple bites of apple…making it harder than ever to enforce a patent,” he said.
IPOfferings is working on an analysis of patent sales in 2016 that Schibanoff believes will show a slight decline in patent values last year.
“My view is it’s not a fair fight anymore. There was a time of too many infringement lawsuits and it was convenient to settle, but the pendulum has swung too far to the other side,” he added.
Nevertheless, the patent business remains robust, said Schibanoff, whose company represents about 100 portfolios across 18 tech areas. IoT is one of the newest additions the company that has a handful of related patents and two portfolios under review.
IBM underscored the rising importance of security, announcing Monday (July 24) new testing services for IoT and automotive security. Researchers from the IBM X-Force Red team will test the security of processes, applications and hardware for access and management.
The IBM group worked with more than a dozen car makers and third parties to develop its automotive test services. It explores among other areas vulnerabilities when connected cars change ownership.
— Rick Merritt, Silicon Valley Bureau Chief, EE Times 
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