Inventergy makes assertion comeback with California suit, but PIPCO travails show brutal market remains 12 Jan 18
It looks like the public IP company (PIPCO) Inventergy, which went through a recent major restructuring that saw it hand control of a huge portfolio to debt provider Fortress, has reappeared on the assertion scene, filing a suit in the Central District of California against a company called GPS Monitoring Solutions. The patent at the centre of the case was part of a June 2016 deal which saw Inventergy obtain the exclusive rights to license or sell three assets owned by a company called GTX Corp. The PIPCO, headed by former senior HP IP executive Joe Beyers, announced a year ago that it had launched a licensing campaign for the patents, which relate to GPS tracking.
The suit is Inventergy’s first public assertion since it went through a radical overhaul in the first quarter of last year. Having picked up several large portfolios from Panasonic, Nokia and Huawei at the start of 2014, it was forced to hand over most of its patents to Fortress after it struggled to meet the terms of a debt financing package that it agreed in October 2014.
After it took control of those patents last year, the IP group at Fortress wasted little time in bringing infringement suits against Apple, HTC and, most recently, ZTE. As this blog reported last September, in another sign that the group is moving quickly to assert its IP, it hired former Perkins Coie global IP co-chair Jon James to lead its litigation efforts.
In comparison with the vast majority of monetisation businesses, Inventergy has been very reluctant to litigate and, perhaps not surprisingly, it struggled to realise much value from its large portfolio of telecoms patents. The suit against GPS Monitoring Solutions follows an announcement from the PIPCO that it has agreed a new $2.4 million debt financing in part to help it pay for future operations. With interest payments varying between 8% and 17%, as well as profit-share provisions, the terms of the deal may well give Beyers and his team a few sleepless nights over the coming years and mean that the firm is going to have to start generating decent returns very quickly.
Inventergy’s evolution reflects just how much the public IP company (PIPCO) market has changed in recent years thanks to the much tougher assertion climate in the US. Last week Marathon Patent Group, a former standout in the sector with patents previously owned by the likes of IPNav and Siemens, announced the appointment of an interim CEO to replace Doug Croxall who had led the business since 2012.
Like Inventergy, a large chunk of Marathon’s patents are now being asserted by Fortress after the NPE struggled to meet the terms of its own debt agreement with the IP team led by Eran Zur and Joseph Kessler. Clearly burned by its experience in the patent market, Marathon has moved into the bitcoin sector with the November acquisition of cryptocurrency mining business Global Bit Ventures. Other former PIPCOs have also left the space. These include the company formely known as Vringo, which underwent perhaps the most radical transformation to become a health and wellness company called XpresSpa Group. Others, such as WiLan, now a subsidiary of Quarterhill, have looked to diversify their businesses so that they’re no longer pure-play licensing companies.
For those that remain in the monetisation business, there was a reminder this week of just how tough the climate is as Finjan, a standout performer in recent years, saw a big chunk of a $39.5 million damages award against Blue Coat Systems remanded back to district court in a decision by the Court of Appeals for the Federal Circuit. Several parts of the Federal Circuit’s ruling went in Finjan’s favour but in a litigation battle that has become particularly drawn out, the decision underlines just how long it can take patent owners to see a return on their IP. Inventergy knows that better than anyone.
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