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Judge Albright Wrongly Held that Loan Default Caused Standing Defect, Rules Federal Circuit
Patent Litigation Feature
The apportionment of patent rights can be a tricky business—particularly where a plaintiff has pledged its patents as collateral, as just illustrated by a new precedential decision from the Federal Circuit. In May 2022, Western District of Texas Judge Alan D. Albright dismissed a case brought by Intellectual Tech LLC (IT) against Zebra Technologies due to lack of standing, holding that because the plaintiff’s default on a loan gave its lender the option to sell the plaintiff’s patent or assert the patent itself, the plaintiff had been deprived of all substantial rights in that patent. However, the Federal Circuit ruled on May 1 that Judge Albright had fallen into an increasingly familiar trap by confusing the jurisdictional issue of standing, which requires a mere injury; with the issue of whether the plaintiff is a “patentee” as required to bring an infringement suit under 35 USC § 281.
May 3, 2024
California Court Dismisses “Hotly Pursued” License Claim, Intel Turns Back to Texas
In Case You Missed It
Intel has been trying to litigate whether an earlier license agreement with Finjan, Inc. provides a defense in the multidistrict campaign of VLSI Technology LLC against it. Last week, Northern District of California Judge Beth Labson Freeman ruled that a forum selection clause in that license agreement requires any claim be brought in Delaware, the court dismissing the lone remaining license claim for forum non conveniens rather than transferring it to the District of Delaware. Also last week, Intel filed a motion to amend its answer, defenses, and counterclaims in the Western District of Texas to add the license defense there.
April 8, 2024
VLSI Turns to the Courts for PTAB Fees Denied by Vidal
Patent Litigation Feature
The ongoing saga over misconduct at the Patent Trial and Appeal (PTAB) has taken a new turn. In late 2022, USPTO Director Kathi Vidal ruled that two third-party petitioners, OpenSky Industries and Patent Quality Assurance (PQA), had abused the inter partes review (IPR) process by filing petitions that were designed to extract rent-seeking payments from patent owner VLSI Technology LLC. However, while Vidal found OpenSky’s behavior to be so egregious that she ordered it to pay $413K in attorney fees to VLSI, upholding that order earlier this month, she did not award fees against PQA. Now, VLSI has turned to the courts in an attempt to win fees from PQA as well, asserting claims of “abuse of process, fraud, and civil conspiracy” in a recent Virginia state court complaint against PQA and an individual acting as its “authorized representative” that seeks $3.2M in attorney fees stemming from their alleged actions. On March 20, the defendants removed VLSI’s suit to the federal Eastern District of Virginia, in the process identifying a kitchen sink of purported grounds for the complaint’s dismissal.
March 24, 2024
Full Federal Circuit Declines to Revisit VLSI Verdict Reversal Amid Further PTAB Sanctions Intrigue
Patent Litigation Feature
The multidistrict campaign waged by VLSI Technology LLC against Intel has captured headlines for a variety of reasons in the past several months. In December, the Federal Circuit toppled a $2.2B verdict in the first VLSI case to go to trial—wiping out a Texas jury’s finding of infringement for one patent, reversing and remanding as to damages for a second patent, and also reviving the defendant’s license defense in that case. The full Federal Circuit declined to rehear that decision earlier this month. Meanwhile, also hanging over that proceeding are a set of closely watched inter partes reviews (IPRs) filed by two third parties, OpenSky Industries and Patent Quality Assurance (PQA), that led to the invalidation of both patents from that verdict amidst accusations of gamesmanship from both petitioners. On March 11, USPTO Director Kathi Vidal denied OpenSky’s latest attempt to avoid a $413K attorney fee judgment that she imposed for its abuse of the IPR process—though she did grant a reprieve on timing.
March 17, 2024
Oops . . . and Another Boot
In Case You Missed It
Late last year, Northern District of California Judge James Donato posted a minute order apologizing “for the misunderstanding with respect to the claim construction briefing” in one of the longest-running patent cases in the country. In 2014, Finjan, Inc. filed suit against Palo Alto Networks as part of its sole litigation campaign, over a subset of its portfolio of anti-malware patents. After reassignment in 2021 from former Chief Judge Phyllis J. Hamilton (who took senior status), the claim construction hearing in this case was set for October 13, 2021 and then for April 11, June 1, September 7, and October 25 in 2023. It was reset again, for January 18, 2024, but that date was also canceled because the court believed Finjan had missed the deadline to file an opening brief. The apparent disconnect here arose because that brief was filed nowhere close to the six-weeks prior mark—it was filed roughly 120 weeks ago.
January 10, 2024
VLSI Technology Seeks Entry of Judgment, Intel Leverages Recent Federal Circuit Ruling
In Case You Missed It
Last week, District Judge Alan D. Albright held a posttrial conference in the third matter filed by VLSI Technology LLC against Intel in that courtroom. There, a West Texas jury returned a verdict in November 2022 finding infringement of two claims from a single patent, to a roughly $950M tune. VLSI has filed a motion for entry of judgment in that case, while Intel has moved for a new trial. However, one week earlier, the Federal Circuit overturned the $2.2B infringement verdict in the first matter to go to trial between the two, throwing out the jury’s infringement of one patent (for insufficient evidentiary support) and ordering a new trial as to damages for infringement of the other. Intel now argues that the Federal Circuit’s decision—regarding an error in the presentation in the damages case and regarding the revival of a previously disallowed license defense—bolsters its call for a new trial in the later matter and precludes VLSI’s request for entry of judgment.
December 17, 2023
Litigation Funders Announce a Secondary Market Transaction Involving 15 IP Investments
Patent Market, Patent Watch, TPLF
Publicly traded litigation finance firm Omni Bridgeway announced this week that it had completed the sale of a 25% interest in a portfolio of 15 IP investments to another litigation funder, GLS Capital. While this type of deal is not entirely novel—e.g., Gerchen Capital Partners raised a $750M fund focused on buying positions in existing legal investments—the Omni Bridgeway-GLS transaction is particularly notable in light of the funders’ prominent positions in the patent monetization space.
December 14, 2023
Federal Circuit Topples $2.2B VLSI Verdict, Revives Intel’s License Defense
Patent Litigation Feature
The Federal Circuit has overturned the $2.2B infringement verdict that VLSI Technology LLC won against Intel in March 2021. In a December 4 precedential opinion, the appeals court affirmed a Western District of Texas jury’s finding of literal infringement as to one patent but reversed as to the other, which the jury found infringed under the doctrine of equivalents (DOE)—the court determining instead that VLSI had failed to provide sufficient evidence for that $675M slice of the verdict. As for the remaining $1.5B awarded for the first patent, the court held that VLSI had made a crucial error in its damages case by factoring in the value of noninfringing technology, vacating and remanding for a new trial on that issue. The opinion was also notable for restoring Intel’s license defense based on the 2020 purchase of Finjan, Inc. by Fortress Investment Group LLC, to which VLSI is tied, the Federal Circuit holding that District Judge Alan D. Albright was wrong to reject that defense as futile.
December 10, 2023
Entropic Communications Litigation Produces Some Complicated Brew
New Patent Litigation, TPLF
Entropic Communications, LLC has filed a second case against AT&T (DirecTV) (2:23-cv-05253), over the provision of DVRs that allegedly “serv[e] as nodes operating with data connections compliant with” versions 1.0, 1.1, and/or 2.0 of the Multimedia over Coax Alliance (MoCA) standards. AT&T and DirecTV are already Entropic defendants, sued in 2022 over the provision of satellite television services. Entropic Communications has now filed more than one complaint against each defendant in this litigation: AT&T, Charter Communications, Comcast, Cox Communications, and DISH Network, the last of which has asked Central District of California Judge John W. Holcomb to order Entropic to fully comply with Local Rule 7.1-1, which requires litigants to file a certified list of all parties that may have a pecuniary interest in the outcome of their litigation.
July 7, 2023
New Fortress Campaign, Asserting University Patents, Appears Likely
Patent Market, Patent Watch
USPTO records indicate that earlier this year, a Canadian university assigned a portfolio of patents to an entity formed in Delaware—which public records filed in that state tie to FIG LLC (d/b/a Fortress Investment Group LLC). If past patterns hold, a new Fortress-controlled litigation campaign is likely imminent.
July 7, 2023