Venadium LLC v. Digi International, Inc.

August 2017 has seen the number of defendants in the file-and-settle litigation campaign of Venadium LLC, an affiliate of IP Edge LLC, swell close to 50. The six companies hit so far this month are 8X8 (1:17-cv-01176), Ameriprise Financial (1:17-cv-01177), Arista Networks (1:17-cv-01178), Bandwidth.com (1:17-cv-01179), Control4 (1:17-cv-01180), and Digi International (1:17-cv-01181). The single patent at issue in the campaign, acquired from Xerox, is generally related to limiting software to authorized use, with recent infringement allegations focusing on the cryptographic protocols (e.g. RSA, Diffie-Hellman, and HMAC) during the login process for the defendants’ websites.

Four days after the US Supreme Court issued its TC Heartland decision, returning to its previous, narrower interpretation of where proper venue lies in patent cases, an affiliate of Texas-based monetization firm IP Edge LLC has taken the rare step of filing litigation outside the Eastern District of Texas. Venadium LLC has asserted the sole patent at issue in its campaign (6,330,549) in Northern District of Illinois complaints against three companies allegedly formed in that state—Paylocity (1:17-cv-04002), State Farm Mutual Automobile Insurance (1:17-cv-04004), and W.W. Grainger (1:17-cv-03999)—as well as against two Delaware companies—Allstate Insurance (1:17-cv-03998) and Hyatt Hotels (1:17-cv-04001). Meanwhile, Somaltus LLC, another IP Edge affiliate, agreed to postpone a scheduling conference in an ongoing Eastern District of Texas case to allow that court to rule on a pending motion to dismiss filed by the Ohio defendant, The Noco Company, for lack of personal jurisdiction and improper venue. Late this past week, Magistrate Judge Roy S. Payne granted the motion, transferring that case out of Texas to the Northern District of Ohio. Finally, last week two Southern District of New York judges asked IP Edge affiliate Kaldren LLC to submit letters explaining why venue is proper in cases that that the NPE brought earlier this month in that district.

Venadium LLC, an affiliate of IP Edge LLC, has added five more cases to its sole litigation campaign, suing Expedia (Hotels.com) (5:16-cv-00174), Groupon (5:16-cv-00173), Kayak (5:16-cv-00175), New Avon (5:16-cv-00172), and Redfin (5:16-cv-00176). The NPE continues to assert a single, former Xerox patent (6,330,549), generally related to limiting software to authorized use, against the cryptographic protocols (e.g. RSA, Diffie-Hellman, and HMAC) during the login process for the defendants’ websites. This approach marked a shift, begun this past July, away from infringement theory in the first wave of lawsuits, filed in July 2015, which targets Bluetooth-enabled devices.

In July 2016, the last of the 20 cases brought by Venadium LLC roughly one year earlier was dismissed with prejudice. Six weeks later, the NPE has rebooted its sole litigation campaign by filing five new lawsuits, one each against BuzzFeed (5:16-cv-00118), J.D. Power and Associates (5:16-cv-00119), LivingSocial (5:16-cv-00120), Spotify (5:16-cv-00121), and The Washington Post (5:16-cv-00122). A single, former Xerox patent (6,330,549) generally related to limiting software to authorized use is asserted. Perhaps in light of the shaky infringement allegations in Venadium’s first wave of suits, which targeted Bluetooth-enabled devices, these new complaints allege that the defendants’ websites infringe at least claim 1 of the ‘549 patent through their use of cryptographic protocols (e.g. RSA, Diffie-Hellman, and HMAC) during the login process.