2BCom LLC, an NPE that has targeted automakers as well as networking companies with litigation over former Toshiba patents, has received yet more patents from the Japanese conglomerate. The recent assignment, executed earlier this month, could signal a plan to “refresh” a campaign that saw a string of dismissals in late 2020.

Toshiba to 2BCom

According to USPTO records, 2BCom—which describes itself as an “IP licensing company specializing in wireless technologies, including Wi-Fi and Bluetooth”—received a family of five US patents from Toshiba on March 10. The patents generally relate to “a notification method in a communication system of notifying specific multifunctionality information between terminal stations”, with each family member issuing between 2007 and 2019 and sharing earliest estimated priority in March 2002.

The assignment agreement filed with the USPTO makes reference to a November 2019 patent licensing agreement, through which Toshiba transferred rights to 27 US patents to 2BCom, including eight that have been at issue in the NPE’s sole campaign to date. Additional information about the patents-in-campaign, as well as an assertion grid, is available on RPX Insight here.

2BCom opened up that campaign in 2020 with a January suit against Fiat Chrysler Automobiles (Chrysler, FCA US), adding cases against BMW, D-Link, Kia Motors, and TP Link the following April. Also in April 2020, Amazon asked the Central District of California for a declaratory judgment of noninfringement of several 2BCom patents.

Across its campaign, 2BCom has primarily trained its infringement allegations on vehicle infotainment systems, focusing in particular on external device connectivity and information display, as well as Wi-Fi routers. The case against TP-Link targeted Wi-Fi routers and also certain Bluetooth music receivers.

All of 2BCom’s 2020 affirmative actions were dismissed with prejudice in the fourth quarter of last year, as was Amazon’s DJ action, all following relatively uneventful litigation. As of the publication date of this report, the NPE has one active case, filed against NETGEAR in January 2021; NETGEAR has yet to answer or otherwise respond to 2BCom’s complaint.

Operating company patents as a driver of NPE litigation

As extensively reported by RPX, the sale of operating company patents to NPEs remained a significant driver of litigation throughout 2020. Perhaps due to economic pressure related to the COVID-19 recession, 2021 has already seen a number of such transactions.

Last month, chip maker NEWRACOM joined the growing ranks of operating companies to divest patents to NPEs. According to USPTO records, the California-based fabless company—formed in 2014 by a group of over 20 individuals from the Electronics and Telecommunications Research Institute (ETRI)—assigned hundreds of homegrown US patent assets, as well as a number of counterparts in Asia and Europe, to an Acacia Research Corporation subsidiary. See “Acacia Acquires a Large Portfolio from an IoT-Enabled Wireless Chip Maker” (March 2021) for more details.

Meanwhile, in February, Scramoge Technology Limited—an Irish NPE linked by public records to the hedge fund Magnetar Capital—received over 120 US patent assets from LG Innotek. For a look at the ongoing campaigns of Scramoge’s various sister NPEs, see “Two Well-Heeled NPEs, Both Holding Large OpCo Portfolios, Open Up March with Fresh Suits” (March 2021).

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) (itself owned by private equity firm Vector Capital), may be gearing up to file more litigation. See here for RPX coverage.

USPTO records also reflect the recent movement of a large portfolio of patents from HP Enterprise to Ocean Tomo (OT Patent Escrow LLC) to Valtrus Innovations Limited, an NPE that Irish corporate records tie to the individuals behind Fundamental Innovation Systems International LLC (FISI) (which is backed by the private equity firm Centerbridge Capital). More well-funded litigation from this team, again over former operating company patents, looks likely in 2021.

Current economic conditions have also played a part in litigation finance’s explosive growth. With interest rates exceedingly low and the markets volatile, wealthy investors—including hedge funds and private equity firms—are seeking out alternative asset classes, including litigation finance, as a source of high returns that are uncorrelated with global equity and fixed income investments. These investors are reportedly flooding the litigation finance industry with capital, and in turn, making nonrecourse funding more available for litigants—including patent plaintiffs.

The IP market flush with former operating company patents, and with third-party funding increasingly widespread, the economic risk of NPE litigation may be the same as it was when filings were at peak levels—or, as discussed here, even higher.