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*** Intellectual Ventures Launches Massive Litigation Across 3 Industries ***

By Peter Zura

"Gentlemen, you can't fight in here - This is the War Room!
         -- President Merkin Muffley (Dr. Strangelove, 1964)

For some, this was a surprise.  For most everyone else, it was a matter of "what took so long?"

From this morning's newswire:

Today Intellectual Ventures ("IV") enforced its rights and filed patent infringement complaints in the U.S. District Court of Delaware against companies in the software security; dynamic random access memory (DRAM) and Flash memory; and field-programmable gate array (FPGA) industries.

"Over the years, Intellectual Ventures has successfully negotiated license agreements with some of the top technology companies in the world. However, some companies have chosen to ignore our requests for good faith negotiations and discussions," stated Melissa A. Finocchio, Chief Litigation Counsel, Intellectual Ventures. "Protecting our invention rights through these actions is the right choice for our investors, inventors and current licensees."

Despite the creation of a "Patent Defense Fund" (to protect against patent trolls, don't-you-know) and assurances that IV is "opposed to litigation" (for more on that, see here), IV has decided to launch 3 lawsuits involving over 10 patents in the following industries:

Software Security - defendants include Check Point Software, McAfee, Inc., Symantec and Trend Micro.  To view the complaint, click here.

DRAM / Flash RAM Memory - defendants include Elpida Memory Inc., and Hynix Semiconductor.  To view the complaint, click here.

Field-Programmable Gate Arrays (FPGA) - defendants include Altera Corp., Lattice Semiconductor and Microsemi.  To view the complaint, click here.

Interestingly, IV refers to itself in the complaint as "Intellectual Ventures I" and "Intellectual Ventures II" and notes that "[a] significant aspect of Intellectual Venture's business is managing the two plaintiffs in this case, Plaintiff Intellectual Ventures I and Plaintiff Intellectual Ventures II."  No explanation is given as to how this split is arranged from a business perspective.

However, IV does mention that it "has purchased more than 30,000 assets and . . . has earned nearly $2 billion by licensing these patents to some of the world's most innovative and successful technology companies who continue to use them."

IV also describes itself as a scientific research entity that "has a staff of scientists and engineers who develop ideas" and "has invested millions of dollars developing such ideas . . . [and] has also invested in laboratory facilities to assist with the development and testing of new ideas."

This could be significant, since research entities are given a little more slack when seeking injunctions in a post-eBay world.  In CSIRO v. Buffalo Technology, Inc., E.D. Tex. (6:06-CV-324), June 15, 2007, the district court made the following "irreparable harm" determination on CSIRO (a non-practicing entity) when it granted a permanent injunction:

The majority opinion in eBay rejected the conclusion that ?a ?plaintiff?s willingness to license its patents? and ?its lack of commercial activity in practicing the patents? would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue.?

CSIRO has shown that its harm is not merely financial. While CSIRO does not compete with Buffalo for market share, CSIRO does compete internationally with other research groups?such as universities?for resources, ideas, and the best scientific minds to transform those ideas into realities. CSIRO?s reputation is an important element in recruiting the top scientists in the world. Having its patents challenged via the courts not only impugns CSIRO?s reputation as a leading scientific research entity but forces it to divert millions of dollars away from research and into litigation costs. Delays in funding result in lost research capabilities, lost pportunities to develop additional research capabilities, lost opportunities to accelerate existing projects or begin new projects. Once those opportunities have passed, they are often lost for good, as another entity takes advantage of the opportunity. Delays in research are likely to result in important knowledge not being developed at all or CSIRO being pushed out of valuable fields as other research groups achieve critical intellectual property positions. Thus, the harm of lost opportunities is irreparable. They cannot be regained with future money because the opportunity that was lost already belongs to someone else.

Hang on to your hats . . .

Full post as published by Two-Seventy-One Patent Blog on December 08, 2010 (boomark / email).