Multiple litigation finance players announced large fundraises during the third quarter, signaling a continued interest in the asset class by institutional investors. Also during Q3, several NPEs began new campaigns financed by third parties, including an established litigation finance firm as well as a hedge fund.

Sonraí Memory Limited has sued Kingston Technology (8:21-cv-01039) and Western Digital (8:21-cv-01040) over the provision of devices that contain “SanDisk/Toshiba 64L 3D NAND flash chips”, as well as solid state drives (SSDs) that include Silicon Motion SSD controllers (Kingston) or Marvell SSD controllers (Western Digital). These new suits expand a campaign that started in February of this year with Western District of Texas cases against Alphabet (Google), LG Electronics (LGE), and Samsung and that proceeded with separate additional suits filed against Apple, Dell, and Kioxia in April, also in West Texas. The new litigation, by contrast, has been filed in the Central District of California.

A recent dive into Irish corporate records has revealed that a group of associated NPEs with ties to Magnetar Capital—a hedge fund with a reported $11.2B in assets under management—is larger than once thought. Meanwhile, US assignment records suggest that yet more litigation springing from this group of NPEs—which includes Data Scape Limited, Neodrón Limited, Solas OLED Limited, and Sonraí Memory Limited—may be coming.

Last quarter, RPX flagged Microchip’s assignment of roughly 50 US assets to Sonraí Memory Limited, an Irish NPE linked to Data Scape Limited, Neodrón Limited, and Solas OLED Limited—all three of which are waging sizeable, multi-front litigation campaigns with backing from hedge fund Magnetar Capital. Having now acquired a portfolio from HP Enterprise (HPE) in a late-April transaction, Sonraí Memory indeed appears poised to make that trio of litigating Irish NPEs a quartet.

Early in February Microchip and its subsidiaries Atmel and Microsemi assigned another batch of US patent assets, this time 50 issued patents and a handful of additional applications, to an NPE formed in Ireland. The recipient is Sonraí Memory Limited, which Irish records link to Data Scape Limited, Neodrón Limited, and Solas OLED Limited, each of which has launched sizeable litigation campaigns that have remained active since Data Scape first began filing suit in December 2018. Prominent financial backing for the three campaigns suggests litigation from Sonraí Memory is likely coming.

The Litigation Finance Journal recently reported that Swiss private bank Syz Group is looking to invest in litigation finance, in part due to the “recession-proof” features associated with that asset class. As reported by RPX throughout 2019, litigation finance firms have experienced record fundraising in recent years, with private equity firms and hedge funds—such as Magnetar Capital—seeking opportunities to invest in uncorrelated assets that can withstand, or even perform well in, the next economic downturn.

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.

Fujitsu (PFU Limited) (5:19-cv-04810) has filed a complaint in the Northern District of California, seeking declaratory judgments that certain of its ScanSnap scanners, and related software, do not infringe six patents held by Data Scape Limited. Data Scape, an Irish NPE, launched litigation over a portfolio acquired from Sony late last year, eventually hitting more than a dozen defendants in multiple district courts and before the International Trade Commission (ITC). Among those cases was a suit in the Eastern District of Texas, filed by Data Scape against other Fujitsu subsidiaries—the wrong Fujitsu subsidiaries, according to this new complaint, which attempts to join the dispute between the correct parties, doing so in California, rather than Texas. The filing comes as joint motions to dismiss to facilitate settlements have been filed across most of Data Scape’s ongoing cases, which were filed after the Central District of California issued an Alice order that dealt a serious blow to most of its original lawsuits.

Data Scape Limited continues to reorder its cloud computing campaign in the wake of a May 17, 2019 order from the Central District of California invalidating four challenged patents under Alice. District Judge David O. Carter ruled that those patents are patent-ineligibly directed to the abstract idea of “data storage, transfer, and processing”, prompting the NPE, that next week, to file voluntary dismissals and new complaints against previous defendants Amazon, Box, Dell, Dropbox, Pandora, Spotify, and Teradata and to file separate complaints against defendants Apple and Verizon. This past week, Data Scape added Citrix (2:19-cv-04667) to that first list, dismissing without prejudice a December 2018 complaint while filing a new one that asserts a single, newly issued patent, not litigated prior to the Alice invalidation.

Irish NPE Data Scape Limited has hit a snag in its ongoing cloud computing campaign with the invalidation of four of its patents under Alice. In an order issued on May 17, District Judge David O. Carter of the Central District of California granted a Rule 12 challenge filed by defendant Western Digital, holding that the four patents are invalid as directed to the abstract idea of “data storage, transfer, and processing” without the addition of an inventive concept. The patents just invalidated are at issue throughout the campaign, and Judge Carter’s ruling has already prompted the plaintiff to file a series of new complaints asserting patents not yet invalidated—including one asserted for the first time.