AmiCOUR IP Group News and Opinions

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March 15, 2012  - Billed on Internet sites and blogs as a case of patent troll v patent troll, Cascades Computer Innovation LLC ("CCI"), related to Anthony Brown's Cascades Ventures, has filed an antitrust suit against San Francisco based patent consolidator RPX Corporation. Brown, who resurfaced after his non-compete agreement with Acacia terminated, retained legendary attorney Ray Niro and his firm to represent his new company.

The allegations contained in the 23 page complaint, filed March 7, 2012 in the Northern District of California, offer rare insight into the world of non-practicing entities ("NPE's") and patent consolidators:

    - CCI claims that a handful of companies own or control intellectual property rights to nearly 120,000 telecommunications and hand set industry related patents. In comparison, his client had less than 100 patents.

    - CCI alleges that its primary defendant in the litigation, RPX Corporation, is a spinoff of Intellectual Ventures and was funded by Kleiner, Perkins.  CCI alleges that RPX subscriptions cost between $60K and $6 million annually.

   - CCI is seeking relief based upon alleged actions arising under federal antitrust laws, the Cartwright Act, and California statutes related to unfair competition.

   - CCI describes its failed attempts to license a small portfolio of computing related patents, and a named inventor as a former Russian luminary who worked on Sputnik.

   - CCI describes "The Anti-Troll/Anti-NPE Conspiracy" in revealing detail, citing actions by Intel's former head of litigation, Peter Detkin, as originating the now widely used,  defamatory expression, "patent troll."

   - CCI alleges that "law firms like Winston & Strawn that represent two of the defendants... have openly encouraged their clients and potential clients not to negotiate settlements, accept licenses or settle with NPE's, regardless of the merits," linking his allegation to a related web site.

   - CCI alleges that RPX acts on behalf of its members, who provide funding for acquisition and/or licenses that will end cases or the threat of cases.

   - CCI alleges that RPX selects its "members" based upon the frequency with which they have been sued by non-practicing entities, and includes text from the RPX website in the complaint.  CCI also accuses RPX of using "coercive tactics" to compel members to join.

  - In support of its allegations, CCI cites a dispute between Kaspersky Labs in which it accused RPX of "extortive and fraudulent" practices, again including a hyperlink in its complaint.

   -  CCI claims that RPX has now begun selling "NPE patent insurance" to further encourage "group, not individual, efforts" negotiating or accepting patent licenses.

   - As the RPX actions relate to its claim, CCI then alleges that RPX led a conspiracy causing rejection of its offers to license its client's portfolio to the other named defendants, further alleging that the RPX agreement which licensing candidates signed prohibited their ability to negotiate freely with CCI.

The CCI complaint includes four counts claiming relief, and represents the second known antitrust action against the consolidator industry, which attempts to acquire patents for corporate clients in order to reduce their risk of suit should the same patents fall into the hands of NPE's.

Allied Security Trust ("AST") faced an earlier suit in which the plaintiff cited a Harvard Law School professor who  described the role of AST as being "to crush small companies and individual inventors."