Uninvited Guests in the Smart Home: New NPE Patent Litigation

In keeping with the recent trend in smart home patent litigation, IoT Innovation rang in the new year, suing Snap One in Texas, accusing its Control4 platform for smart home integration. (2:25-cv-00022). Four months earlier, IoT Innovation filed a complaint (2:24-cv-00704) against Snap One in the same district for distributing Ecobee smart home thermostats, cameras, sensors, and plugs. 

In the consolidated litigation is also Resideo Technologies, spin-out of the Honeywell Home brand of smart-home products and acquirer of Snap One in June 2024. IoT Innovation expanded its campaign, filing lawsuits directly against Ecobee in February 2024 and their parent company, Generac, in September 2024.

Founded in 2011 by Daniel Mitry and Timothy Salmon, Empire IP is one of the more prolific NPEs, with over 660 cases attributed to the entity and its associated companies. Empire IP is also behind Cuozzo Speed Technologies. Cuozzo may ring a bell as the NPE behind the 2016 US Supreme Court’s unanimous decision to affirm the PTAB’s and Federal Circuit invalidation decisions and their use of the broadest reasonable claim construction rule. 

Unfortunately, the year 2025 promises more activity from Empire IP, as several tranches of patents have been assigned to Empire IP or Empire IP-associated entities like Fleet Connect. Fortunately, Empire IP’s success appears to be mixed:  out of 992 defendants, 500 have settled, 155 have seen their cases dismissed voluntarily with prejudice, and only 47 have proceeded to a Markman hearing. Of the defendants whose cases have gone to Markman, only 22 have settled. 

The majority of the 32 patents litigated by IoT Innovation originated over a decade ago from Nokia and AT&T and passed through various Intellectual Ventures entities such as Sulvanuss Capital, Spyder Navigations, and Amosmet Investments. In fact, Intellectual Ventures maintains a secured interest in the monetization proceeds from a number of the patents assigned to IoT Innovations. 

Empire IP, in general, and IoT Innovations specifically, continue to expand their litigation, becoming an uninvited guest in the smart home. With the smart home industry’s estimated 2025 revenue being $170B, as well as a CAGR of nearly 10% through 2029, little doubt remains as to whether NPEs will continue to assert in this space.

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.

China to the US: If you won’t regulate SEPs, we will

In an opinion piece written for the IAM website, Jonathan Stoud highlights what the State Administration of Market Regulation (SAMR) letter to Avanci means to standards leadership. The letter puts Avanci on notice for potentially acting anticompetitively, asking it to address monopoly risks related to its licensing practices.

Read the full article HERE

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.