Joff Wild

Intellectual Ventures has announced that it has reached settlements with SK hynix Inc and Elpida Memory Inc in litigation the firm had commenced against both concerning memory device patents.  The two companies had been named as defendants in a case that IV filed in December 2010 in Delaware and were then named as respondents in an ITC case, along with some of their customers, in July 2011.  Following the settlement, IV will seek to have all actions against the two companies, and their clients named in the ITC complaint, dismissed. Although the deal terms have not been made public, my understanding is that both have now become IV licensees.

IV caused quite a stir in December 2010 when it initiated actions against a number of companies in the software security, DRAM and Flash memory, and FPGA industries. Today’s news means that the DRAM and Flash memory part of the actions have now come to an end. However suits against Check Point Software Technologies, McAfee, Symantec, Trend Micro, Altera, Lattice Semiconductor and Microsemi are ongoing. Claim construction hearings in these cases are currently scheduled for various points next year, with trials pencilled in for 2014.

The action taken in 2010 was the first time the firm had ever take direct legal action against companies that had refused to take licences from it and marked a sea change in the way that it did business; co-founder Nathan Myhrvold having previously claimed that “litigation is a huge failure” and "a disastrous way of monetising patents”. However, when the companies you sue end up settling with you, it’s not too much of a bad thing as long as you get what you are after. That said, in a blog about today’s news, IV’s chief litigation counsel Melissa Finocchio writes: “Though I love my chosen profession and couldn’t be prouder of the excellent work done by my team at IV, I have to admit that I see Nathan’s point. It’s always been IV’s philosophy that signing license agreements, rather than heading to the courtroom, is the best way to do business.” She continues:

IV has built a strong patent portfolio over the past 12 years, and we continue to believe that investing in invention will provide the financial incentives needed for companies, research organizations and individual inventors to conceive of new technologies and improve existing ones. As much as we prefer to focus on investing in invention, occasionally we need to turn our attention to protecting those investments by enforcing our invention rights. We’ll continue litigating when we need to, but we always prefer to do deals across a conference room table and with a handshake.

Today’s news marks the first time that IV has reached settlements with any companies against which it has commenced litigation. What we do not know, of course, are the terms under which SK hynix and Elpida have become licensees of the firm. Triumphal press releases and blogs can hide all manner of compromises - especially when there may be very good reasons why IV would want to avoid the full glare of a trial; but they can also signal that, actually, IV’s portfolios are very strong and cannot be avoided if you operate in certain industries. Right now, nearly all the world’s major memory companies have licence deals with IV.  That probably tells us quite a lot.