RPX Data Update: New Filings Dip After TC Heartland
June 29, 2017
RPX saw patent litigation filings remain fairly sluggish in the second quarter of 2017, with about 530 defendants added to NPE lawsuits and nearly 420 added in operating company cases (compared to about 500 and 400, respectively, in Q1). While the total number of defendants in Q2 was similar to Q1, we noted that the number of NPE defendants added per week dropped by about half in the six weeks following the US Supreme Court’s decision in TC Heartland v. Kraft Foods Group Brands.
TC Heartland returned a key portion of the patent venue statute to its prior, narrower interpretation: a corporate defendant is now deemed to “reside” only in its state of incorporation. The lull in filings since then may be due at least in part to summer’s generally slower pace—but it is also a likely indicator that some plaintiffs are pausing to reconsider their strategies with respect to venue.
Some of the year’s top litigants, however, are more actively—and visibly—adjusting.
IP Edge LLC
Prolific monetization firm IP Edge LLC continues its streak as the top filer for both Q2 and 2017 overall, hitting 77 new defendants in the second quarter and 161 this year so far. In the wake of TC Heartland, IP Edge has essentially followed a dual-prong strategy, either suing out-of-state defendants in other districts or targeting defendants in the Eastern District of Texas.
In early June, IP Edge launched its first campaign outside the Eastern District through affiliate Olive Shade LLC, which sued CareFusion and Meps Real-Time in Delaware over their provision of RFID-based solutions for medical device tracking. In each of those lawsuits, Olive Shade alleges proper venue in the District of Delaware through both prongs of the patent venue statute, pleading that both companies “reside” in the state as Delaware corporations and that they both have “a regular and established place of business” in that district under the statute’s second prong. See here for more details on that litigation.
IP Edge has also expanded existing campaigns with additional litigation brought in new districts. In mid-June, IP Edge affiliate Kaldren LLC filed a new pair of lawsuits against Kik Interactive and Snap in the District of Delaware. Kaldren’s first wave of litigation was brought in the Eastern District of Texas in March, followed by a second wave in the Southern District of New York in early May. Earlier in June, two New York judges ordered the NPE to explain why venue is proper in that district, and the plaintiff has since agreed to transfer one of those lawsuits, against PNY Technologies, to the District of New Jersey. For more information, see here.
In addition, IP Edge has continued filing litigation in the Eastern District of Texas, historically its preferred venue. In mid-June, affiliate Vaultet LLC started a new campaign in the Eastern District against Avis Budget Group and Disney over their use of certain payment technologies, adding another lawsuit against American Eagle Outfitters later in the month. See here for more information on Vaultet’s initial filings.
Leigh M. Rothschild
Inventor Leigh M. Rothschild holds the number two spot for both Q2 and 2017 overall, with NPEs controlled by Rothschild having hit 77 defendants in the second quarter and 82 for the year. In contrast to other frequent litigants, Rothschild’s campaigns have seen a limited amount of venue activity. A recent, notable example is the inventor’s media transfer campaign, which on June 20 saw plaintiff Display Technologies, LLC agree to transfer its case against HTC from the Eastern District of Texas to the Western District of Washington (see here for details). A few other Rothschild-controlled NPEs have also consented to transfers out of Texas, including Location Based Services, LLC in its case against Garmin and Product Association Technologies, LLC in its case against ShopStyle.
Meanwhile, Rothschild has continued to file litigation in Texas after the issuance of TC Heartland. In early June, Geographic Location Innovations, LLC further expanded its navigation and location services campaign with six new suits against BB&T, Capital One, The Kroger Co., Choice Hotels, Gym-Mark, and Phillips 66, all filed in the Eastern District. (See here for further details.) In addition, Rothschild’s file-and-settle litigation strategy has recently come under fire, with the Federal Circuit awarding attorney fees to ADS Security in early June after finding that Rothschild’s broader pattern of “vexatious litigation” made the case at issue, brought by Rothschild Connected Devices Innovations, LLC, exceptional under Octane. For more information on that decision, see here.
Monument Patent Holdings LLC
Monument Patent Holdings, LLC, a longtime mainstay of the Eastern District of Texas, hit the third-highest numbers of defendants in both Q2 and 2017, with 24 defendants added in the second quarter and 49 for the year. Monument, the litigation arm of Dominion Harbor Group, LLC, has agreed to multiple transfers following TC Heartland. The most recent of these was its Eastern District Wi-Fi campaign, which saw plaintiff and Monument subsidiary Wireless Switch IP, LLC agree to transfer all of its active lawsuits (against Acer, ASUS, and Lenovo) to the Northern District of California. (See here for more information about that litigation.) Earlier in June, another Monument subsidiary, Visual Effect Innovations, LLC, stipulated to the transfer of its case against NVIDIA to that same district.
Monument has also started filing litigation outside of Texas in the weeks after TC Heartland. On June 19, subsidiary Weatherproof Wireless, LLC started a new campaign in the District of Delaware with a single lawsuit against Digi International, accusing the company of infringement through its 4G LTE communications hub. However, Monument’s other litigation post-TC Heartland has still been brought in Texas, with recent filings including a mid-June suit brought by subsidiary Clean Energy Management Solutions, LLC against Cisco and another brought by First-Class Monitoring, LLC around the same time against JP Morgan Chase. (See here for more details on the Clean Energy Management Solutions litigation, and here for First-Class Monitoring.)
RPX will continue to monitor the effects of TC Heartland on NPE litigation strategy. For more information on how both plaintiffs and defendants have reacted to the decision, see here. To receive RPX’s new daily transfer alert email summarizing all transfer motions and orders, subscribe here.