Securus Expects Some Patents To Be Invalidated - No Impact on Quality, Business Operations, or Scale Advantage of Securus' Industry-Leading Patent Portfolio and Product Set

DALLAS, Feb. 19, 2016 /PRNewswire/ -- Securus Technologies, a leading provider of civil and criminal justice technology solutions for public safety, investigation, corrections and monitoring – discusses the relatively new process that the Patent Trial and Appeal Board (PTAB) uses in its validation/invalidation process.

Securus Technologies enjoys a significant advantage in patents approved and pending metrics over GTL – see the following metrics:

Since the passage of the Leahy-Smith America Invents Act (AIA) in September of 2011, the PTAB has changed the way it validates/invalidates patents.  This was done in an effort to reduce the total number of patents approved by the United States Patent and Trademark Office (USPTO) and also to reduce the number of patent infringement cases.  It is important to recognize that the USPTO and the PTAB are part of the same federal government organization – and what was an approved patent three (3) years ago may be invalidated today, based upon changes in the law and standards for the evaluation of patents.

"GTL has seized upon these recent changes in how a patent is evaluated, and the newly instituted use of the PTAB for review purposes, to file a few petitions seeking invalidation of Securus patents – patents that were previously reviewed, approved and issued by the USPTO. Given recent changes in the law, and a more lenient standard of review, we expect that some of our previously approved and issued patents could be invalidated by a different arm of the same governmental organization that issued them," said Richard A. ("Rick") Smith, Chief Executive Officer of Securus Technologies. "Not because they are 'bad patents' – but rather because the criteria for their evaluation has changed.  However, we will aggressively defend each and every one. Ultimately – the number of patent invalidations that GTL seeks is irrelevant to me – it just doesn't matter because they cannot invalidate our entire existing patent portfolio AND the extensive number of pending patents that we have will keep them busy for years at a very high cost to them. There is a hard date for IPR rulings – it is one (1) year from the date of institution. If we do have a patent invalidated, it does not mean that we cannot use the technology that we created, all it means is that it is now invalid and others can use it without a license agreement.  There will be no change in how we operate at all.  So other than the good potential press for GTL, I am indifferent to that outcome, and it does not affect our operations at all.  If GTL is successful in invalidating all that they have filed for, we will have +90% of all issued and pending patents still in place. We have challenged GTL to a bake-off on overall technology twice – but they have not responded to these challenges – that's obvious if you understand the technology that Securus and GTL offer."

The tactic of using the PTAB to review some existing Securus patents in an effort to have them invalidated could take years, and could cost GTL many millions of dollars in legal fees and expenses; in all likelihood, this process will cost GTL approximately $25 million for those filed to date. We are encouraging GTL to have all +100 of the current active Securus patents and the +90 pending patents when approved evaluated by PTAB – at a total cost to them of an estimated $200 million to $300 million in legal fees. It's a legal and economic strategy that could certainly be called into question – not only in terms of method, but also in terms of result. By contrast, Securus has taken a much more surgical approach to this change of law and patent review process. Although we anticipate filing additional petitions seeking to invalidate GTL patents in the future, at present, we have limited the PTAB petitions filed to just a few of GTL's patents, but we likely will file another group of PTAB petitions for invalidation of GTL's patents in the next six (6) months if GTL wants to continue their attempt at a smear campaign against us.

"I can justify a GTL patent license payment to Securus of $115 million, with a 10 to 25 year payment plan – based upon existing, pending, and future patents - for a license granting GTL access to all of our existing and future patents into perpetuity. On a net present value basis, that is $61 million – which is at the low end of what other licensees have paid on a percentage basis, so that is an okay deal for GTL," said Smith. "I am willing to compromise and come to a mutually agreeable conclusion – the olive branch is fully extended. Eventually, GTL will want to get a transaction completed – and I guess we will settle at that point. Until then – the attorneys will make a lot of money. Furthermore, I recently received a comment from one of Securus' lenders who said that Securus and GTL are fighting like little school girls on the playground. I have to agree with him."

GTL has recently trumpeted its efforts to invalidate Securus' "crown jewel" US Patent # 7,899,167 that relates to centralized call processing. "However, I am not sure why GTL calls this our crown jewel – perhaps it is because they have hopes of getting the PTAB to rule in their favor this year on this one – but I would not call it our crown jewel," said Smith. "It represents less than 1% of our patent portfolio – certainly not our crown jewel by any measure and just another valuable patent that we own." Although it would be our preference to retain every one of our patents, each patent represents less than 1% of our current patent portfolio, which would make the potential invalidation of any patent insignificant in the larger scheme of things.

"Patents are important to Securus and being a patent leader in our sector is important – but they represent only one measure of our technology leadership. Having the largest corrections-based VoIP platform in the world; having the largest product set – over 850 products; having our own domestic call center with  our own associates versus outsourcing this function; having our own field technicians and not outsourcing that strategic area; having more IT professionals developing strategic products  than anyone else; owning more high tech companies that make society safer; getting hundreds of customers to see what we do in our Technology Center; having satisfied customers for a very long time – with good references – all of these are why our company is the industry leader," said Smith. "Ultimately, keeping all of society safer, with a high level of business integrity are the best measures of who we are.  I have made several offers to GTL to settle so we can have patent peace forever at what I view as a trivial cost to GTL – but they have not been receptive to that direction – so we will both spend non-trivial amounts in the patent lawsuit/invalidation legal process until GTL decides to end the foolishness."

ABOUT SECURUS TECHNOLOGIES

Headquartered in Dallas, Texas, and serving more than 3,450 public safety, law enforcement and corrections agencies and over 1,200,000 inmates across North America, Securus Technologies is committed to serve and connect by providing emergency response, incident management, public information, investigation, biometric analysis, communication, information management, inmate self-service, and monitoring products and services in order to make our world a safer place to live.  Securus Technologies focuses on connecting what matters^®.  To learn more about our full suite of civil and criminal justice technology solutions, please visit SecurusTechnologies.com.

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SOURCE Securus Technologies, Inc.

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