Patent Risk Digest

July Transactional Records Foreshadow New Patent Lawsuits

When ownership of a patent is transferred from one individual or entity to another, a recording of that transaction is often filed with the United States Patent and Trademark Office (USPTO). Such recordings typically precede patent lawsuits, as patent owners want to go into litigation with a “clean” transfer history (thus decreasing the chances that their rights to the asserted patent(s) will be challenged). A recording may be filed with the agency days, months, or even years after a patent transaction is completed.

Thousands of patent transactions were recorded with the USPTO in July, including transfers to entities the sole purpose of which is to assert patents in litigation. RPX noted roughly 20 such transactions among the July recordings, including several that have already led to new patent lawsuits. For example, a December 2016 transfer of two patents from Intellectual Ventures LLC to Strategic Intellectual Solutions, LLC was recorded with the USPTO on July 17. That same day, TMI Solutions LLC, an affiliate of Strategic Intellectual Solutions, began suing retailers over the patents, accusing the companies of infringement through their websites’ use of cookies. TMI Solutions has so far sued Bath & Body Works Direct, Nordstrom, Staples, The Gap, and Victoria’s Secret.

Wearables Campaign Tops 100 Defendants

July saw eight new defendants added to a litigation campaign started nearly five years ago by SportBrain Holdings LLC. With the suits against Anima, DailyFeats, Fengan Technology, Jiff, InvenSense, Guess, Mad*Pow Media, and Nokia, the number of defendants sued in the campaign is nearing 120. The July lawsuits, like their earlier counterparts, accuse the companies of infringing a patent through wearable computing devices, such as fitness trackers and smartwatches, as well as associated apps.

Exposure Risk Lingers Years After a Patent’s Expiration

Hybrid Audio LLC filed four new cases in July, one suit each against Adobe, AOL, CyberLink, and Navico. Hybrid Audio has now filed over 50 patent lawsuits, the majority of which have been brought since January of this year. The defendants are accused of infringing a single, expired patent through laptops, tablets, smartphones, and other devices using the MP3 standard. Hybrid Audio is seeking royalties from the date on which defendants received notice of their alleged infringement to the date of expiration (in September 2012) of the asserted patent.

Patent Plaintiffs Explore New Venues in the Wake of TC Heartland

In the nine weeks following TC Heartland—the Supreme Court’s May 22 decision regarding patent venue—the concentration of patent litigation has begun to disperse. Historically, the venue of choice for patent plaintiffs has been the Eastern District of Texas, which has been popular due to the perception that its relatively speedy system and inclination towards trials put extra pressure on defendants to settle. However, under TC Heartland, the Supreme Court returned to a narrower interpretation of a key part of the law governing venue for patent suits that allows a corporation to be sued where it “resides”: while before the term “resides” was interpreted broadly, allowing lawsuits in virtually any district for many defendants, a corporation now “resides”—and can thus be sued for infringement—where it is incorporated. (Suits can also be brought where a defendant has “committed acts of infringement” and has a “regular and established place of business”.) In light of this new limit, plaintiffs are shifting away from Texas in favor of venues in Delaware, Illinois, and California.