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10.07.17

Patent Trolls to Watch Out For: ZiiLabs, VLSI Technology LLC, and AlphaCap Ventures

Posted in Patents at 4:17 pm by Dr. Roy Schestowitz

Eagles watching the circling vultures

Eagle

Summary: Roundup of news about patent trolls which actively pursue ‘protection’ money and are already filing lawsuits in the US

IN an effort to keep abreast of broad and potentially complex networks of trolls we habitually document who does what and where (or who for). Many trolls simply act as proxies or satellites for another entity. Some change names. We strive to keep these things documented and sites that are friendly to trolls often drop hints about what goes on (because they try to promote or help the trolls, not expose them). One such site is IAM, which is close to Intellectual Ventures, a Microsoft-connected troll with literally thousands of proxies.

The other day IAM wrote about RPX and ZiiLabs, a trolling proxy of Creative. We mentioned it before, as far back as 5 years, then again last year and earlier this year. We also wrote many articles about Creative. Like other companies that thrived/peaked back in the 1990s and then faltered, their patents approach their expiry date so they try hard to make the most out of these, i.e. litigation.

Singapore continues to yield patent trolls such as Creative — a cause for concern in an otherwise strong economy. Here’s the latest:

Back in July, RPX announced a deal with ZiiLabs – a subsidiary of Singapore’s Creative Technology – which halted US patent infringement litigation against seven defendants, at least some of whom are members of the aggregation service. As part of the agreement, ZiiLabs assigned an unspecified number of patent rights to RPX.

At the time, this blog speculated on just what the bounds of the deal were, and how much room it would leave ZiiLabs to continue to monetise the patent portfolio it acquired as part of a 2002 buyout of chip designer 3DLabs. A new lawsuit filed in the district court in Delaware against Nvidia answers some of those questions. And it seems to suggest that ZiiLabs and parent Creative are set to remain Southeast Asia’s key patent player.

As we pointed out earlier this year, Creative is now targeting Android OEMs. It’s a real menace. Creative barely sells anything anymore and its patents have become nothing but a burden/yoke on society.

There’s another IAM blog post, this one about VLSI Technology LLC (which, as the name suggests, is likely just a troll). Fortress was mentioned here at the end of last month and it seems to be behind this troll. To quote:

Earlier this week a patent infringement lawsuit was filed against Intel in district court in Northern California by a company called VLSI Technology LLC. The chip giant stands accused of infringing eight VLSI patents which relate to semiconductor and microprocessor technology and all of which originated with NXP Semiconductors or Freescale Semiconductor (which was bought by NXP in 2015).

According to the court filing VLSI owns a portfolio of 160 US and foreign patents which cover “a wide variety of technologies, including integrated circuit technology”. It appears to take its name from a Silicon Valley business that was set up in the early 1980s and was ultimately acquired by Philips in 1999. A check of the USPTO assignment database shows that the company acquired the patents in a series of transactions dating back to August 2016.

So producing companies like Freescale or NXP end up looking like a Qualcomm and nothing good will come out of it. It’s just a bunch of trolls looking for a quick buck.

The EFF, in the meantime, ousts a new case study about Alice and patent trolls. The death of software patents is nowadays celebrated by the EFF and here they reveal another troll which relies on these. “Generic patents for “crowdfunding” invalidated,” it wrote, “and a startup saved, thanks to Alice v. CLS Bank.”

It turns out that this troll went after just about everyone conceivable:

David S. Rose is a serial entrepreneur turned angel investor. He’s the founder and CEO of Gust, a company that connects startups with investors around the world. David has been in crowdfunding circles for as long as crowdfunding has existed, so imagine his surprise when a company claiming to own patents on crowdfunding demanded payment from Gust in order to keep doing business.

“It was ridiculous,” David says. “They were trying to claim a patent on the concept of online equity funding.” AlphaCap Ventures’ suite of patents—Nos. 7,848,976, 7,908,208, and 8,433,630—cover routine ideas like a website having profile pages for each of its users, applied to the worlds of venture capital and crowdfunding. “They sued the ten leading players in the industry,” David says. “AngelList, Kickstarter, all of them.” AlphaCap sued in the notoriously patent-owner-friendly Eastern District of Texas, despite the fact that AlphaCap was based in California and Gust in New York. As is often the case with patent trolls, AlphaCap appeared most interested in getting defendants to settle as quickly as possible.

Up until now AlphaCap has managed to maintain a relatively low profile although we mentioned it at the start of the year after it had lost in the Eastern District of Texas.

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