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Vantage Micro LLC, an entity formed in Delaware this past April, has launched a litigation campaign, suing Huawei (4:19-cv-00731), STMicro (4:19-cv-00732), and TI (4:19-cv-00733) in the Eastern District of Texas; and Cirrus Logic (6:19-cv-00578), MediaTek (6:19-cv-00580), Microchip Technology (6:19-cv-00581), NVIDIA (6:19-cv-00582), and Renesas (6:19-cv-00585) in the Western District of Texas. Six patents—originally developed by either AMD or ATI Technologies (which AMD acquired in 2006) and generally related to technologies ranging from detecting a display monitor to managing shared memory resources, from accessing graphics data via multiple memory channels to “tracking the movement of masks” during chip fabrication—are asserted in overlapping subsets across the new complaints, with the defendants accused of infringement through the provision of a wide range of processors, GPUs, integrated circuits, and controllers.

Ally Financial (6:19-cv-00592), American Express (6:19-cv-00593), BB&T (6:19-cv-00594), Charles Schwab (6:19-cv-00595), Fifth Third Bank (6:19-cv-00596), HSBC (6:19-cv-00598), Morgan Stanley (6:19-cv-00599), and Regions Financial (Regions Bank) (6:19-cv-00601) have all been added as defendants in the campaign that Lighthouse Consulting Group LLC began with August cases against Bank of Princeton, CitiGroup, Investors Bank, JPMorgan Chase, Kearny, and Wells Fargo and continued with a September suit against TD Bank. Throughout, Lighthouse has asserted two patents generally related to using an “image device” such as a “fax” or a scanner to capture and transmit images of checks and deposit slips to a bank, targeting the mobile deposit features within the defendants’ banking apps.

Litigation finance firms have experienced record fundraising in recent years, with private equity firms and hedge funds looking for opportunities to invest in uncorrelated assets that can withstand, or even perform well, in the next economic downturn. With large amounts of capital on hand, and therefore fewer concerns about diversifying their investments, multi-strategy funds are proving to be attractive investment partners for standalone litigation funders. Through such partnerships, a new breed of NPEs has emerged—one backed by more copious and patient capital than those of years past. This article, the first in a series covering the evolving sources of capital for NPEs today, takes a look at two private equity firms and a hedge fund backing notable NPE campaigns.

Consolidated Transaction Processing LLC (CTP), a Nevada entity that has identified Equitable IP Corporation as its parent company, has filed another round in its e-commerce campaign, adding suits against Costco (1:19-cv-01915), Ford (1:19-cv-01916), Home Depot (1:19-cv-01917), JCPenney (1:19-cv-01918), and Lowe’s (1:19-cv-01919) in the District of Delaware to cases against Amazon, eBay, and Walmart already active there. All five new complaints assert the same five e-commerce patents, with infringement allegations focused on common features within the defendants’ e-commerce platforms, as well as features that distinguish between multiple sellers for a given item and that allow sellers to choose from multiple payment processors. The active suits against Amazon, eBay, and Walmart are themselves curious September 2019 reboots of March 2019 cases filed against those three companies (and later voluntarily dismissed).

Arbor Global Strategies LLC has filed suit against Samsung (2:19-cv-00333) in the Eastern District of Texas, alleging infringement of three patents described as relating “to a new type of IC called a ‘stacked die hybrid,’ which allows for an extremely compact processor module with increased data speeds and processing efficiency”, using “inter-cell through-silicon vias (‘TSVs’) within an integrated circuit module, such as between die layers”. Targeted are products (“including Galaxy mobile phones, Galaxy Note, cameras, and Samsung computers”) that use the company’s ARM-based Exynos processor, its ISOCELL image sensor, its DDR4 memory module, and/or one of “Sony’s IMX family of image sensors”. The plaintiff identifies D. James Guzy, a named inventor for the patents-in-suit, as its chairman, president, and cofounder.

The Federal Circuit has summarily upheld an award of attorney fees for SAP against InvestPic LLC that a district court had imposed after the NPE ignored warning signs that its patent was invalid. In the affirmed decision—issued by District Judge Ed Kinkeade in September 2017, months after he invalidated the patent-in-suit under Alice—the court held that the NPE’s case against SAP was exceptional under Octane, finding in part that InvestPic should have known its patent was likely directed to unpatentable subject matter, both due to explicit cautionary statements from the USPTO on that specific patent and because of applicable caselaw on Section 101. The Federal Circuit had also previously upheld the lower court’s Alice order, confirming in May 2018 that the patent is ineligibly directed to an abstract idea, in the form of a series of mathematical calculations. Later that summer, the appeals court declined to revisit that conclusion in light of a subsequently issued reexamination certificate.

Late last month, District Judge Rodney Gilstrap denied a motion, brought by defendant HTC, challenging, among other things, the specificity with which Motiva Patents, LLC pleaded the knowledge elements within its claims of indirect and willful infringement. Judge Gilstrap ruled that the plaintiff adequately pleads “willful blindness” in satisfaction of the knowledge requirements for inducement of infringement, contributory infringement, and willful infringement, all based on allegations in the complaint that HTC adopted a “policy or practice of not reviewing the patents of others” and “performed specific acts to implement and enforce” that policy: “Since Motiva has alleged that HTC has such a specific policy—a policy prohibiting review of patents—Motiva has plausibly alleged that HTC was willfully blind”. The late September ruling came just before a separate HTC motion challenging subject matter jurisdiction, prompting Motiva Patents to voluntarily dismiss the case last Sunday and triggering a race back to the courthouse, with the NPE refiling the next day in the Eastern District of Texas (9:19-cv-00181) and HTC filing a complaint seeking declaratory judgments of noninfringement from the Northern District of California (3:19-cv-06373).

Inventor-controlled Snik LLC has filed its first lawsuit, asserting two patents broadly pertaining to an earphone device with a magnetic “holder body” that activates when it senses decoupling from the magnets. Samsung (6:19-cv-00458) is accused of infringement through the provision of the Level U Pro, Level U Pro Active Noise Cancelling, and Galaxy Buds wireless earphones. At issue are the magnetic wireless charging cases for the devices. Snik pleads that “in or about March and April of 2018” Samsung was made aware of the patents-in-suit “in writing and in at least one face-to-face meeting”.

In a new District of Delaware suit, Ortiz & Associates Consulting, LLC (OAC) has accused Panasonic (1:19-cv-01921) of infringing a single “multimedia” mobile device patent from a family of 30-plus members, targeting the mirroring features of the company’s Viera-series televisions. OAC asserted the same patent, together with others from the same family, in an August 2018 case in the same district against Roku, which responded with a quick motion to dismiss under Alice. Delaware District Judge Maryellen Noreika teed that motion up for argument on June 14, 2019—just five days short of the five-year anniversary of the Alice decision itself—in an omnibus hearing that addressed five Section 101 motions filed in cases before her, the others filed by OpenPrint LLC, Sandboxed Software, LLC (d/b/a Sandbox Software, LLC), TrackTime LLC, and EncodiTech LLC. Judge Noreika’s treatment of these motions on a “Section 101 Day” tracks the procedure already used in Delaware a couple of times this year by District Judge Leonard P. Stark. OAC is now suing Panasonic, begging the question: how did that Roku motion fare? More broadly, four months later, how did Judge Noreika’s “Alice day” affect the progress of those other NPE campaigns?

In June 2018, the Federal Circuit vacated a lower court order in which claims that Zeroclick, LLC had asserted against Apple in the Northern District of California were invalidated for indefiniteness. Roughly one year after remand, in June 2019, District Judge Jon S. Tigar handed down a new order, construing several disputed claim terms and rejecting Apple’s repeated indefiniteness arguments. Now, these several months later, Zeroclick has expanded its litigation campaign with a spate of new filings. The NPE accuses Dell (6:19-cv-00569), HP Enterprise (6:19-cv-00570), LG Electronics (LGE) (6:19-cv-00571), Microsoft (6:19-cv-00572), and Samsung (6:19-cv-00573) of infringing one or both of the patents already at issue against Apple, both generally related to a touch-only graphical user interface. The accused devices are various “touch screen computer products”.