Milwaukee-based Koss Corp. is suing major headphone brands, including Apple and Bose, alleging their products infringe on the company’s patents on wireless headphone technology.
Koss filed five lawsuits in the U.S. District Court for Western Texas on Wednesday, naming JLAB Audio, Skullcandy Inc. and Plantronics Inc., in addition to Apple and Bose. The company says the patents in the case relate to work it started in the mid-2000s to develop “truly wireless headphones” as part of a project called “Striva.”
The company, which announced the lawsuits as part of its "intellectual property enforcement program," is seeking damages from each of the five competitors, including interest, and asking the court to find the infringement was willful, potentially tripling the amount Koss would be awarded.
The complaints do not specify an amount the company is seeking. Apple generated nearly $24.5 billion in net sales in 2019 from its wearables, home and accessories category, which includes AirPods and Beats products. The figure marked a 41% increase from 2018 that Apple attributed partially to higher net sales of AirPods.
“Koss brings the instant lawsuit because the industry has caught up to Koss’s early-2000s vision,” the complaint against Apple says. “The technology Koss developed as part of its substantial Striva investments has become standardized, with whole listening ecosystems having been built around the techniques Koss conceived of over a decade ago.”
The patents in the cases were issued in 2019. In most cases, Koss sent letters to the companies on July 10 informing them that their products infringed on the patents and sought a response by July 17.
In the case of Apple, Koss says it first informed the company of the infringement in September 2017. The two companies have since met four times at Apple’s California offices along with exchanging several emails, according to the complaint.
"Our singular focus has been to shepherd the industry that John Koss created by obsessively developing new products to bring people closer to the music they love," said Michael J. Koss Jr., vice president of marketing and product at Koss. "It is impossible for us to be responsible stewards of our industry when our ideas, inventions and intellectual property rights are disregarded."
In its complaint against Apple, Koss says it began investing in Striva in the early 2000s.
“Koss recognized that the future was a wireless world, complete with mobile internet connectivity that went beyond traditional hardwired, or computer-based, network topologies. It recognized that wireless ubiquity was coming, and would extend to wearable devices, including Koss’s area of expertise: the headphone,” the complaint says.
Koss says the Striva project resulted in the development of a system-on-chip smaller than a human fingertip that could provide audio and wireless communication on a low power budget.
The company also says it predicted modern headphone features, including a microphone, reacting to voice prompts and even a smart speaker product.
“Unfortunately, the economic reality of Koss’s market position did not permit it to bring its Striva-based product vision to the masses,” the complaint says, citing upheaval in the company’s international customer base and supply chain in the late-2000s and early-2010s.
“Moreover, Koss conducted market research during the mid-2000s, and concluded that given the market that was likely to develop for wireless headphones, larger companies with more manufacturing capability would become a substantial threat to bringing Striva fully to market,” the complaint adds.
From fiscal 2000 to fiscal 2014, Koss spent nearly $9.8 million on research and development.
The company did launch Striva products, which allowed consumers to listen to audio from the internet using Wi-Fi. However, in late 2014, the company determined the software behind the technology needed to be replaced by a new architecture and recorded a $6.3 million impairment charge.
