Q3 2016 Sees Sustained Litigation Pace, Notable Verdicts
October 4, 2016
NPE litigation activity in Q3 2016 (about 700 defendants) slightly trailed Q2 (about 800 defendants), sustaining a pace well above the first-quarter lull. Again, we saw some volatility, this time marked by a modest spike early in the quarter, primarily driven by familiar faces in NPE litigation. By volume, top NPE campaigns so far for the year range from logistics (Shipping & Transit, LLC) to wearables (SportBrain Holdings LLC) to electronic billboards (T-Rex Property AB).
Notably in Q3, repeat players continued to add cases to campaigns related to website authentication (IP Edge LLC), background checks (Prognosis IP, LLC), and consumer electronics (Nicolas J. Labbit), placing them among the top ten NPEs of the year by defendants added. Collectively, these top ten NPEs alone have filed suits targeting more than 400 operating companies so far in 2016.
At the same time, NPEs continued to pick up new portfolios. Entities controlled by Monument Patent Holdings, LLC and IP Edge—which have collectively filed over 280 patent infringement cases so far this year—were assigned messaging and communications patents that they are likely to assert soon. And Blackbird Tech LLC, which has waged 11 litigation campaigns to date and has directly filed 30 cases in 2016, acquired a number of gaming patents that may show up in litigation this year. Blackbird Tech’s most recent campaign, kicked off in August, has targeted fitness tracking devices.
NPEs also have experienced some momentum in the courts. In the latter part of the quarter, three notable infringement verdicts were issued against operating companies, all of which involved publicly traded plaintiffs. In mid-September, a jury issued a $22 million verdict against Apple in a campaign waged by Cellular Communications Equipment LLC, a subsidiary of the publicly traded Acacia Research Corporation, which has seen multiple asserted patents withstand validity challenges before the Patent Trial and Appeal Board (PTAB).
Shortly after, Sophos was hit by a $15 million infringement verdict in a case brought by publicly traded Finjan Holdings, Inc., the latest development in a litigation campaign that has stretched on for over a decade. On September 30, a jury handed down a $302M infringement verdict against Apple in a suit filed by the publicly traded VirnetX Holding Corporation, in a complex, nine-year campaign that has persisted despite multiple verdicts and reversals and a Federal Circuit appeal.