Three Plaintiffs are Responsible for Most Volume Patent Suits – Who are they?

Non-practicing patent owners or NPEs are reportedly responsible for filing the bulk of patent infringement suits. Who are these super plaintiffs and why do they sue in bulk?

According to Patent Litigation Report 2023 from the IP research firm LexMachina, Cedar Lane Technologies, Inc. with 336 suits filed between 2020 and 2022 remains the most active patent plaintiff. It is followed by WSOU Investments LLC with 205 suits  and Bell Semiconductors LLC with 106 suits over that period.

“Docket Navigator data shows the NPE far outstripped other highly assertive entities in volume ,” as reported by IAM, “and attained a 98% settlement rate.”

Based on an average of approximately 3,800 U.S. patent suits filed annually over the past five years, these three entities collectively comprise about 5% of suits over that period. Unified patents reported in its 2021 analysis that NPEs account for 2,375 district court cases and 87% of all High-Tech assertions in District Court.

Cedar Lane’s patents were formerly owned by Intellectual Ventures, reports NPE Showcase. I.V. was one of the most aggressive acquirers of patents in the early 2000s, amassing ten’s of thousands of them over a several years. The Canada Government Directory lists a few details about Cedar Lane, including a website which does not appear to be active. Stanford University Law lists Cedar Lane’s cases.

WSOU Investments, doing business as Brazos Licensing, is led by Craig Etchegoyen formerly of Europe’s Uniloc. His business, reports Unified Patents, “has gone from 600 patents being asserted through Uniloc to a web of over 15,000 Nokia and Alcatel-Lucent patents and applications from over 4,500 patent families.

A Range of Fields

“Most of the patents in the portfolio (and most of the patents asserted) relate to telecommunications and digital data processing and transmission, although they cover a range of fields, including wireless networks, video games, and image processing and communication. Over 5,000 of these patents are US Patents.”

Bell Semiconductors was started by a former in-house patent lawyer and an engineer at LSI, Bell Semiconductor purports to be “the successor in interest to the intellectual property portfolio that originated at Bell Labs.”

Bell Labs was picked up by a company that was later acquired by Nokia for roughly $17 billion in late 2015, reports IP Law 360. Two years later, Nokia began unloading the thousands of patents it had bought in that deal. According to the complaint at the ITC, Bell Semiconductor managed to buy “over 1,900 semiconductor related patents.”

 Questions Worth Asking:

  • How much merit is there in the suits that Cedar Lane, WSOU and Bell Semiconductors are bringing?
  • Are these NPEs a product of increasing challenges to patent licensing, a result of questionable laws, poor patent quality or confused courts?
  • What role does the favorable economics of patent infringement play for many defendants? Is it an unintended incentive to steal? Is theft simply more cost-efficient and profitable than paying royalties?
  • Are some good patents so easily infringed and nasty to litigate that they are left to specialists like NPEs on which to generate a return?
  • Why do even large businesses with significant portfolios, like Nokia and Alcatel-Lucent, resort to third parties, including litigation funding sources, to help generate a return on their R&D investment?

Go here to obtain a copy of the LexMachina 2023 patent litigation report.

Image source: LexMachina

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