Upswing in Q2 Networking NPE Litigation Fueled by Plaintiffs Linked to Industry Veterans and Monetization Firms

A breakdown of NPE litigation by market sector shows that Networking saw the greatest increase in filings in Q2 2024, going up by 116% compared to Q2 2023. Other sectors with significant upticks included E-Commerce and Software (which saw an 85% increase), Financial Services (63%), and Automotive (57%). Sectors with fewer filings included Consumer Electronics and PCs (which decreased by 43%), Semiconductors (38%), and Mobile Communications and Devices (31%).

Among the NPEs contributing to that swell in Networking litigation were several plaintiffs controlled by industry veterans. One was Innovations In Memory LLC, which in May launched a campaign targeting networking hardware (including servers and switches) and enterprise storage products that allegedly incorporate certain memory devices. The plaintiff was formed by an individual behind multiple firms engaged in patent monetization and/or financing (presently including Armada IP Capital, and formerly Soryn IP Group, LLC) and who also previously served as an engineer at InterDigital, Inc. Another such plaintiff was Encryptawave Technologies LLC, which in late June expanded its ongoing litigation campaign with a new wave of complaints over a wide range of devices (e.g., computers, label printers, smartphones, smart microwave ovens, tablets, thermostats, and TVs) that support the WPA2 protocol within certain authentication tools. Encryptawave is managed by Inferential Capital LLC, which is controlled by two individuals who variously report past positions with Wi-LAN Inc., IPNav, and Acacia Research Corporation. Also adding new cases to an existing Networking campaign was Freedom Patents LLC, which filed a series of mid-June complaints alleging infringement through devices (e.g., gateways, MIMO modules, and TVs) that implement MIMO Wi-Fi functionality. Freedom Patents is managed by a Texas attorney behind several other litigating NPEs, a list of which is available here.

Also joining the fray were two plaintiffs linked to well-known monetization firms. In early May, Fleet Connect Solutions LLC, a plaintiff associated with Texas-based Empire IP LLC, added another complaint to the campaign it launched in December 2020, here hitting networking products (e.g., access points, firewalls, and routers) that support Bluetooth, IEEE 802.11ac/b/n, and LTE connectivity. Additionally, Iarnach Technologies Limited, an NPE linked to Dublin monetization firm Atlantic IP Services Limited, added a third defendant to its ongoing optical networking campaign in early April, alleging infringement through products and services related to providing DPoE v2.0-compliant networks, including optical networking hardware, transport networks, and DOCSIS back-office equipment.

Q2 also saw networking litigation from CelluPlex LLC, which in late June kicked off a campaign over telephone systems that can connect to cellular phones via Bluetooth; and Lab Technology LLC, which in late May started its own campaign over cellular networking products, including LTE modems and processors incorporating them, adding more complaints throughout June (see here and here). Both plaintiffs are part of a growing group of New Mexico-based NPEs represented by Rabicoff Law LLC that have recently launched litigation.

See RPX’s second-quarter review for details on other key trends impacting patent litigation in Q2 and the first half of 2024.