Hilco’s Bell Semiconductor Asserts Former Broadcom Patents in Two New Semiconductor Campaigns

November 30, 2019

More former Broadcom patents have popped up in litigation, with Bell Semiconductor, LLC suing Integrated Device Technology (IDT) (1:19-cv-02155) in the District of Delaware over three of them (generally related to “parasitic capacitance” avoidance and high-speed transmitter contacts) and Renesas Electronics (6:19-cv-02196) in the Middle District of Florida over seven others (broadly concerning various aspects of semiconductor fabrication, including corrosion prevention and bond pad reinforcement). The plaintiff targets the defendants’ provision of various semiconductor devices (e.g., controllers, GPUs, MCUs, processors, and SRAM). Given its membership in the Hilco, Inc. (d/b/a Hilco Global) family of companies, and with thousands of other patents held, these suits seem unlikely to be Bell Semiconductor’s last.

Headquartered in Chicago, Hilco Global (formed in Delaware in 1986) is an international financial services company, operating more than 20 businesses providing valuation, advisory, monetization, and liquidation services. In November 2016, Hilco launched “Hilco IP Merchant Banking” (also identified as Hilco IP Merchant Banking, LLC, of uncertain state registration), describing it as a new business unit providing IP-based financial and technical advisory services and “IP monetization solutions”, and investing in IP-driven transactions. Michael Friedman, former Managing Director of Ocean Tomo, was hired as CEO of Hilco IP Merchant Banking, joined by a team of 13 senior professionals from Marquis Technologies (an IP consultancy formed by the leaders of Rockstar Consortium Inc.) including John Veschi (former CEO of Rockstar and Chief IP Officer of Nortel) as CFO; Gillian McColgan (former CTO of Rockstar and Nortel IP) as CTO; and Afzal Dean (former VP of Rockstar and Nortel) as CLO.

In the Renesas case, Bell Semiconductor identifies Hilco Patent Acquisition 56, LLC; Hilco IP Merchant Capital, LLC; and Hilco Global as its corporate parents. In its complaints, the plaintiff outlines the origins of its sizeable patent portfolio, which is only part of Hilco Global’s holdings. Bell Northern Research, LLC, a separate entity and plaintiff (see here for the latest report on its own campaign), also holds assets received from Broadcom. The original development work for Hilco’s acquired assets was done by one of the various entities (e.g., AT&T) feeding patents into Agere Systems (a Lucent Technologies spinoff that was acquired by LSI in 2007), by LSI itself (later acquired by Avago Technologies, which then acquired Broadcom, in 2016, renaming itself “Broadcom” thereafter), by Broadcom pre-Avago acquisition, or (although not mentioned in the complaints) by Renesas Electronics (certain assets of which were acquired by Broadcom in 2013). The complaints also recount the move of certain Broadcom personnel to Hilco through acquisition of the portfolio.

Bell Semiconductor asserts three patents (7,319,272; 8,049,340; 8,288,269) against IDT and seven (6,068,879; 6,083,271; 6,153,543; 6,281,129; 6,727,588; 6,879,046; 6,960,836) against Renesas. Only the ‘271 and ‘543 patents appear to have seen previous litigation, within relatively early cases in a sprawling campaign begun with a 2001 suit brought by Agere against Proxim, a campaign that remains open today (albeit litigating patents still held by Broadcom, which sued Toyota in May 2018 over six patents that have kept the campaign alive). The ‘271 patent was asserted against only Maxim, in an April-to-April affair that settled in 2016 as claim construction briefs were being filed. The ‘543 patent appeared in separate cases within the campaign in claims against Microchip, NXP, Sony, and UMC, with litigation over the patent never spawning any substantive rulings before dismissal.

In January 2018, Bell Northern Research, Bell Semiconductor, and Hilco Patent Acquisition 56 granted a security interest in over 3,700 patent assets, including the issued patents now asserted, to unnamed “Secured Parties” through a document signed on behalf of those parties by Cortland Capital Market Services, a Chicago-based investment servicing company (and a subsidiary of global private equity firm Alter Domus). The vast majority of the patent assets covered by that security interest were passed to Bell Semiconductor from Broadcom through multiple assignments, dated December 8, 2017.

Bell Semiconductor pleads willfulness as to IDT dating back to March 2019, while analogous allegations as to Renesas reach all the way back to 2015.

Interest in patent litigation by private equity firms has grown over the past several years. For a recent update on this trend, see “2019 Marketplace Trends: Investors in Recent NPE Litigation Include Less Familiar Faces” (November 2019). RPX also publishes a periodic report on the primary sources of capital for NPEs today, the latest iteration of which can be downloaded from RPX Insight here. 11/18, IDT, District of Delaware; 11/18, Renesas Electronics, Middle District of Florida.