After Its Recent Return to Litigation, IPValue’s Future Link Systems Acquires More Patents from NXP

  • February 8, 2021
  • Category: Patent Market, Patent Watch
    Market Sectors: Networking, Semiconductors

Future Link Systems, LLC closed 2020 by filing its first affirmative patent suit to date—hitting AMD over patents received from NXP Semiconductors—and it started 2021 by acquiring more patents from NXP. With hundreds of US patent assets, Future Link Systems, an NPE associated with IPValue Management (d/b/a IPValue), may be gearing up to file more litigation.

The January 15, 2021 assignment from NXP to Future Link Systems comprised 22 US patents, all originating with NXP (including Freescale Semiconductor) or Philips. The portfolio broadly concerns various networking technologies and can be viewed on RPX Insight here.

Patents received from NXP in earlier transactions, and developed by NXP, Philips, or VLSI Technology, are at issue in Future Link’s December 2020 suit against AMD (6:20-cv-01176), which targets the defendant’s provision of various processors and graphics/video cards. The patents-in-suit generally relate to interconnect testing (6,622,108); PCI communications (6,363,466); and memory control (7,983,888).

One of the three patents asserted in the AMD case (the ‘108 patent) appeared in a complaint for declaratory judgment of noninfringement filed by Intel in March 2014, which cited 2013 notice letters sent by Future Link Systems to its customers Dell, HP (before its separation into HP Enterprise and HP, Inc.), and Promise Technology, as well as indemnification requests from its customers “based on Future Link’s patent infringement accusations”. The complaint also asserted a license defense against Future Link’s accusations, which prompted long motion practice culminating in a September 2016 order in which District Judge Leonard P. Stark granted Intel’s motion for summary judgment on the license issue only in part.

The court ruled that the Intel-Philips license remained “valid, not amended, and not terminated”; that the five subject patents did fall within certain grants under the license; and that certain accused Intel products fell within specified categories identified within the license—however, the court denied Intel’s motion for summary judgment that those products were actually licensed under the agreement, leaving that determination for trial. Future Link Systems sought reconsideration of the court’s order, based on the later argument that Intel, a California entity, and not Intel, a Delaware entity and the defendant in the case, was party to the license, and the license purportedly “explicitly prohibits transfer to any other corporation”. The court declined to reconsider the issue.

After extensive other briefing concerning the scope of the parties’ pleadings, Future Link Systems asserted multiple patents affirmatively, causing the court to float the idea of holding an initial trial in the case just covering damages to resolve whether, the figure at issue was closer to Future Link’s estimate of $10B or Intel’s estimate of, at most, $10M. Ultimately, however, the court accepted Intel’s trial proposal: “that the court follow the well-worn path in other oversized patent cases and conduct a ‘bellwether’ trial on liability and damages relating to just” a portion of the patents-in-suit (namely, three). The value that Future Link Systems placed on just that corner of the case was $2.9B, according to the court, “hardly a small amount, and approximately one-third of the value [Future Link] has placed on this entire massive case”.

That same month, July 2017, the court handed down sealed rulings on multiple pending motions (motions for summary judgment and motions challenging expert opinions), public versions of which were never docketed because by mid-August of that year, the court had signed a dismissal with prejudice in light of the parties’ settlement (on undisclosed terms).

In its complaint against AMD, Future Link Systems describes itself as “the owner of over 200 issued and pending US patents . . . the result of R&D investments by NXP Semiconductors and Philips” and its patent holdings as “relate[d] to a variety of products and technologies, such as data interconnect and interface technologies, computer and network architecture, gaming devise, mobile phones, processors, memory, and other integrated circuits”.

Future Link received the patents asserted against AMD in two transfers—one in August 2013 (211 assets) and the other in March 2015 (three assets), both from Partners for Corporate Research International (PCRI), a Cayman Islands entity apparently formed by IPValue for the purpose of acquiring the IP. (PCRI assigned one of these acquired assets to Home Run Patents LLC, another apparent pass-through, which bundled it together with patents developed by Verizon for acquisition by Palo Alto Networks, in August 2014.)

Future Link was formed in Delaware in October 2012 and is identified as one of the portfolios of IPValue, a company now held by private equity firm Vector Capital. Currently available USPTO records indicate that IPValue, through its various associated entities, holds over 6,160 US patent assets, including patents originating with AMD, Cypress Semiconductor, Elpida Memory, Fujitsu, Hitachi, Infineon, IBM, NEC, Panasonic, Samsung, and Seiko.

In late 2019, following years of relative quiet on the litigation front, IPValue—through litigating affiliate Monterey Research LLC—initiated a still-active campaign asserting subsets of the thousands of patents it has received over the years from Cypress Semiconductor.

2020 saw IPValue shift gears, filing more litigation but also assigning former operating company patents to the prolific NPE IP Edge LLC. Over the course of the past 12 months, multiple assignments of patent assets from IPValue entities to IP Edge have appeared among publicly available records; for more information about those transactions—and subsequent litigation by various IP Edge NPEs—see “Perennial Top-Filer IP Edge Returns to the IPValue Well” (January 2021).

As extensively reported by RPX, the acquisition and assertion of operating company patents by NPEs was a significant driver of litigation throughout 2020. For consideration of the economic factors at play here, as well as the potential effects this trend may have on the IP space, see “What 15 Years of US Patent Litigation Data Reveals About the IP Market” (January 2021).

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