Final Round for the ‘Cap’? - Brief look into AGIS

AGIS Software Development LLC (‘AGIS LLC’’) is at it again with its sixth litigation wave. This time, AGIS LLC filed lawsuits against AT&T, GPSWOX, L3 Harris, Lenovo, Motorola Solutions, Rtx, Acer, Dell, HP Enterprise, HP Inc., Snap, Systemic Holding, Tencent, F-Secure, General Dynamics, and Booz Allen Hamilton Holding, alleging infringement of up to six patents belonging to the same extended family with the same priority date. To date, AGIS LLC and its affiliate, AGIS, Inc., have invited forty-one defendants to licensing negotiations before the district courts of Eastern and Western Texas, Southern Florida, and the ITC. A few defendants have been sued by AGIS LLC a second or third time, even after AGIS LLC voluntarily dismissed its earlier case against them with prejudice. Six companies have filed declaratory actions against AGIS LLC and its affiliates to get closure.

Founded in June 2004, AGIS, Inc. developed and launched a command and control software platform called LifeRing, marketed to the government, military, and first responders. Shortly after, AGIS, Inc. combined existing technologies, GPS, mobile messaging, cellular communications, and encryption and filed a patent application on September 21, 2004, US application 10/711,490 (granted as US 7,031,728). After ten years of performing government contract work and trying to partner with several tech companies, AGIS, Inc. decided to monetize US 7,031,728. By 2014, this had spawned a portfolio of thirteen US-granted patents, continuations, and continuations in part.

In its first lawsuit, AGIS, Inc. sent a demand letter in May of 2014 to Life360, a nascent company just concluding a $50M investment round. In the end, Life360 was victorious as they were found not to infringe any of AGIS, Inc.’s patents and were awarded almost $700K in attorney fees. The Federal Circuit upheld the non-infringement decision and the attorney fee award. Life360 did not, however, succeed in getting the SDFla jury to invalidate the patents. Still, the SDFla court did find that the method claims, which were all that remained after Markman, had no reasonable chance of success, and therefore, prosecution against Life360 should not have been continued. The court concluded this after finding that no single actor performed all of the elements of AGIS, Inc.’s method claims, which involved steps to be performed by multiple users. The SDFla court cited the Supreme Court’s ruling in the 2014 Limelight Networks vs Akamai case, which came down less than a month after AGIS, Inc. filed its suit.  

AGIS, Inc. and its affiliates were not deterred after this initial setback. AGIS LLC, formed in Texas in May of 2017, initiated infringement lawsuits against Apple, HTC, Huawei, LG, and ZTE in June of 2017 with a different set of patents belonging to the same extended family. Alphabet’s Waze and Samsung were sued two years later. AGIS LLC has initiated litigation campaigns also in 2021 and 2022, taking thirteen defendants to the ITC, and now in 2024, involving sixteen defendants in the EDTex. According to AGIS LLC’s website, AGIS LLC has settled with ten defendants, but no terms have been disclosed. The only transparency offered is the reporting that Meta took a license to AGIS LLC’s portfolio and AGIS took a license to two of Meta’s patents.

AGIS LLC’s litigation has been disclosed as financed by third parties in case proceedings. Longford Capital Management figures prominently in these discussions, which makes sense given the familiarity between AGIS LLC’s litigation counsel, Fabricant LLP, and Longford Capital Management.

It is possible that AGIS LLC’s recent spate of cases in EDTex could be the last. Of the thirteen grants AGIS LLC and AGIS, Inc. have litigated on, eight have expired as of September 21, 2024, and the remaining five will expire within the next two years. The validity of three of these patents was challenged in the Life360 case without success, but they were found not to be infringed by Life360. The other two patents, US 7,630,724 and US 8,213,970, were challenged in inter-partes or ex-parte reviews with mixed results. Interestingly, the ‘724 has not been asserted in any of the cases filed by AGIS LLC in 2024, and the PTAB found that claims 1 and 3-9 of the ‘970 were unpatentable. AGIS LLC was able to amend claims 2 and 10-13 of the ‘970 in a subsequent ex-parte review, which now has been asserted in the new 2024 cases. Google, in its DJ complaint in Case No. 5:23-cv-03624-BLF, points out, though, that the remaining original claims 2 and 10-13 were found to be invalid in USPTO Reexamination Control Number 90/014,507 in view of the same or similar prior art as that presented in the inter-partes review proceedings for claims 1 and 3-9.

Fire first, ask questions later: The New Normal of No-Notice Patent Suits

JUVE Patent has published an article regarding the prevalence of no-notice suits in Europe at the UPC and in the United States. The article dives into why sue-first tactics are a problem that undermines the underlying goals of patent law. Written by Michelle Aspen and Jonathan Stroud, the article was drafted as part of ongoing efforts by Unified Edge to advocate for better patent policies here and abroad.

To read the full article, click HERE.

Swiss NPE Palmira Acquires Toshiba’s Wi-Fi 4 & 5 Portfolio

Swiss-based Palmira Wireless AG acquired Toshiba’s patents and applications claimed to be related to Wi-Fi 4 and 5 in November 2021. The acquisition comprises 159 publications listed on Palmira’s website, of which 63% are still active and 79% are granted. These publications represent up to 58 families, 35 of which are active and 25 of which have a US grant. The earliest priority date in the portfolio is October 7, 1998, and the latest priority date is August 18, 2008. The average age of the active portfolio is around 20 years. At the end of 2026, more than 80% of the portfolio will have expired. By the end of March 2026, all of Palmira’s EP portfolio will have expired.

Palmira touts the strength of the portfolio by referencing Toshiba’s involvement in the standardization of Wi-Fi 4 and 5. While Toshiba was involved in the standardization of Wi-Fi 4, it is recorded as seen in the chart below as having made only 2.3% of the technical contributions to the development of the Wi-Fi 4 standard and no contributions to the development of Wi-Fi 5. Toshiba’s contributions to the development of Wi-Fi 6 comprised only 1.3% of the total number of technical contributions.

Source: Unified Patents OPEN 2024-09-14, administerial submissions have been removed from the totals.

Palmira is run by German and EU patent attorney, Iouri Kokiako von Gamm. It is advised on finance matters by board member, Dr. Stefan Armonat, and advisory board member, Christoph Gutmann; it is also advised on licensing and litigation matters by advisory board member and former NEC and IP Bridge IP executive, Hideyuki Ogata, and advisory board members, Professor Dr. Ulrich Ziegert and Dr. Simon Holzer. All of this suggests litigation funding, either through a family office (as some of the connections, in particular Dr. Stefan Armonat, suggest) or some other revenue source, as yet undisclosed. 

Palmira has wasted no time in its monetization campaign reaching out to a number of Wi-Fi end product manufacturers. While German litigation reporting is scarce and spotty, we understand that Palmira Wireless AG has sued handset manufacturers there seeking an injunction. The portfolio’s advanced age and the non-practicing entity status of Palmira, coupled with their demand for disproportionately high rates as follows below, may provide grounds for German courts to invoke the proportionality codified in Section 139 of the German Patent Act in 2021 and restrict any permanent injunction sought by Palmira. Further, the portfolio’s 2026 expiration cliff in Germany of course will reduce any leverage Palmira may seek with an injunction there.  

Palmira has announced its royalty rates at $0.20 for terminal-end products using Wi-Fi 4 but not Wi-Fi 5. For Wi-Fi 4 access points, Palmira is asking for 0.20% of the net selling price but no less than $0.20. For Wi-Fi 5, Palmira is asking $0.325 for terminals and 0.325% (but a minimum of $0.325) for access points. Using the 300 US family count for Wi-Fi 4 essential patents with value accepted by the US court in the 2013 In re Innovatio case, Palmira’s rates for 3 US families with potential value (recall that the In re Innovatio court used the Schenkerman theory that 10% of the Wi-Fi 4 SEPs contributed 85% of the value) could lead to a $23.53 stack for Wi-Fi 4 terminal devices and $38.24 for Wi-Fi 5 terminal devices. These rates far exceed the stack of $0.59 per Wi-Fi terminal device calculated using the $0.032 rate settled by Innovatio with Cisco for 19 US patents with value within a year after the court’s decision In re Innovatio.

The Palmira acquisition did not involve all of Toshiba’s patents and applications potentially related to Wi-Fi; Toshiba retains 2,950 active publications, representing 1,588 families, that have an average age of just over 12 years with potential application to Wi-Fi 6. No public information is available on what are the intentions of Toshiba, who was taken private at the end of 2023 by a consortium of private equity led by Japan Industrial Partners. Toshiba’s recent IP divestment history may be indicative of what is to follow.

Judgment Day - coverage of the judgment preservation insurance market bubble

In an article published by Carrier Management, Jonathan Stroud, General Counsel for Unified Patents, is quoted over the increase in sales of judgment preservation insurance (JPI). JPI is a type of insurance that covers the possibility that an award granted at the trial court level could be reversed or reduced on appeal. The policy guarantees the policyholder would receive an agreed-upon financial amount should the verdict go in an unfavorable direction.

“The brokers really started a push toward sales. Their timing was good, as eye-popping verdicts were happening. People started to think maybe this is something, maybe we’re getting left out by not buying the insurance. The brokers capitalized on these fears.”

Jonathan Stroud, Unified Patents

Read the full article HERE

Inflated patent damages settled in Delaware courts attract bad actors

Delaware Online has published an article written by Jonathan Stroud, General Counsel at Unified Patents, over an influx of cash into intellectual property lawsuits. Non-practicing entities, also known as “patent trolls”, and their investors are incentivized to demand massive sums, and their shell company arrangements shield them from negative consequences. These high-stakes wagers create a vicious cycle that subverts our justice system and wreaks havoc on innovators.

To read the full article, click HERE.