The semiconductor industry, an attractive playground for patent trolls

“WiLAN is probably the major threat to semiconductor companies”, announces Nicolas Baron, CEO & co-founder of KnowMade. Indeed, during 2015, this PLC  (or patent troll) acquired lot of patents from semiconductor companies including Infineon Technologies/Qimonda, Freescale and more. The company also filed patent litigations involving these assets several months later.

The KnowMade’s patent litigation risk analysis titled Patent Licensing Companies in the Semiconductor Market does not augur a secure future for semiconductor companies: WiLAN continues its aggressive strategy against leaders of this sector and many semiconductor players are in their sights: Apple, HP, Micron, Amkor Technology, Cypress, Nanya, etc.  KnowMade is part of Yole Group of Companies including Yole Développement (Yole), System Plus Consulting, PISEO and Blumorpho. KnowMade and Yole are combining their expertise to provide to their network a comprehensive understanding of the “More than Moore” industry with a technology, market and patent approach. In particular KnowMade’s analysts have developed a dedicated methodology to understand the competitive landscape, follow technology trends and highlight business opportunities and threats. Thanks to detailed information related to the patent landscape, they perform valuable strategic analyses and technology evaluation. Many industrial companies, all along the supply chain, from IDMs  to OSATs  including equipment and materials suppliers are potential targets for PLCs. With its patent trolls’ analysis, KnowMade is offering a detailed description of the status of patent litigations within the semiconductor ecosystem. Who are the leading patent trolls? Who represent the biggest threat? Which semiconductor technologies are already been involved in patent litigation? Patent trolls are coming out of the woods…

“PLCs will increasingly extract cash from the semiconductor industry”, confirms Dr Fleur Thissandier, Patent & Technology Analyst from KnowMade.

PLCs are non-operating companies concentrated on creating the majority of their income from licensing patents to or litigating against operating companies suspected to infringe their patent rights. PLCs commonly acquire their patents from other companies, and then monetize them via aggressive patent litigation. Some PLCs such as Tessera have R&D activities in order to generate their own patents, and they monetize them by licensing. According to RPX Corporation, NPEs  cost operating companies an estimated US$12.2 billion in both legal fees and other legal costs and settlement or judgment amounts in 2014. PLCs operate in fields with high probability of patent infringement, mainly in USA, where litigation damages are much higher than in Europe or Asia. In a patent infringement action, the potential sales volume plays a major role for assessing the damage award. Thus, the PLCs come into action when the market has reached a critical size and target companies have made irreversible investments. Patent litigation risk tends to increase as new technologies emerge, or as existing technologies combine to create new products and services. The convergence of technologies in the semiconductor field leads to an increase in patent litigation in that sector. The semiconductor industry brings together all ingredients to appeal to PLCs. These include strong consolidation, with many M&A , numerous patents for sale from bankrupt companies and M&A, complex patented inventions, the colossal amount of products embedding semiconductor devices, big companies, and a lot of money. All companies designing, manufacturing or marketing semiconductor-based products are potential targets for PLCs’ next patent litigation. In its patent trolls report, KnowMade’s analysts reveal the most aggressive PLCs in the semiconductor field, their recent patent acquisitions, and their potential targets for future patent litigation.

According to KnowMade report, Acacia Research, WiLAN and Conversant IP Management are the most aggressive PLCs in the semiconductor area:

  • Polaris Innovation and North Star Innovations (WiLAN wholly owned subsidiaries) started to litigate patents acquired from Freescale and Infineon Technologies the same year. They should pursue their strategy the next few years.
  • Acacia Research has today a lower number of semiconductor patents compared to WiLAN. But the company files the highest number of patent litigation campaigns with a relatively high number of defendants. And according to KnowMade’s analysts, they could continue to file numerous campaigns within next years.
  • Tessera, DSS Technology Management, Conversant IP Management and Intellectual Ventures are also key players in this field.

“More than 2,880 semiconductor-related US patents have been acquired by PLCs since 2013”, comments Dr Audrey Bastard, Patent & Technology Analyst from KnowMade. Now, it is a critical time to assess the patent litigation risks and know the potential targets related to these recent patent acquisitions.

More RF technologies patent landscape reports by KnowMade.

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About our analyst
Olivier Thomas, MSc, Olivier works at Knowmade in the field of Biotechnology and Life Sciences. He holds an MSc in Molecular and Cellular Biology from Paris VI University (France). He also holds an Industrial Property International Studies Diploma in Patents and Trademarks from the CEIPI (Strasbourg, France).

About Knowmade
Knowmade is a Technology Intelligence and IP Strategy consulting company specialized in analysis of patents and scientific information. The company helps innovative companies and R&D organizations to understand their competitive landscape, follow technology trends, and find out opportunities and threats in terms of technology and patents.
Knowmade’s analysts combine their strong technology expertise and in-depth knowledge of patents with powerful analytics tools and methodologies to turn patents and scientific information into business-oriented report for decision makers working in R&D, Innovation Strategy, Intellectual Property, and Marketing. Our experts provide prior art search, patent landscape analysis, scientific literature analysis, patent valuation, IP due diligence and freedom-to-operate analysis. In parallel the company proposes litigation/licensing support, technology scouting and IP/technology watch service.
Knowmade has a solid expertise in Compound Semiconductors, Power Electronics, Batteries, RF Technologies & Wireless Communications, Solid-State Lighting & Display, Photonics, Memories, MEMS & Solid-State Sensors/Actuators, Semiconductor Manufacturing, Packaging & Assembly, Medical Devices, Medical Imaging, Microfluidics, Biotechnology, Pharmaceutics, and Agri-Food.