Acacia Research Group ($ACTG) May 18, 2021 Patent Litigation Update
First, Acacia Research Group ($ACTG) is my largest small cap position at the moment. It was nice to be back on the conference call asking patent related questions yesterday morning. I inquired about the floor on materiality that would trigger an 8K being filed because the company has a number of settlements so far in Q2. The company passed on answering my question, which is perfectly fine. Saying very little when you are involved in complicated patent litigation or ongoing licensing discussions is always my preferred strategy. Much has been written about their biotech positions acquired from the Woodford liquidation. Nothing has been written about their patent business.
1) Acacia has their first trial under new management scheduled for jury selection on July 12, 2021 in the Eastern District of Texas with Cisco in their Orange/France telecom portfolio. A reasonably good Markman Opinion was issued on January 7, 2021. Inter Partes Reviews were denied in March 2021. Cisco has filed a round of ex partes reexaminations in April 2021 pending review decisions. Estimating patent damages a plaintiff will ask for ahead of trial is very difficult. The damages number is normally released in opening statements or in the first few days of the plaintiff’s trial presentation.
Their second Monarch Networking portfolio with a patent acquired from Siemens had a Markman hearing and order issued on February 4, 2021 construing the four terms to their plain and ordinary meaning. A Unified Patents filed Inter Partes Review was filed October 1, 2020 and an institution decision is due by June 3, 2021. A jury trial is scheduled for November 15, 2021.
2) Their Unification Technologies (Fio Semiconductor) portfolio had a Markman hearing March 5, 2021 with an order issued on March 12, 2021 construing the disputed terms. A scheduling order was entered with a jury trial scheduled for June 13, 2022 in the Western District of Texas in front of HJ Albright. Joint Motions to Dismiss (Settlements) were filed on April 27 & 28th with defendants HP and Dell. The remaining defendant is the largest one in Micron. Inter Partes Reviews were filed by Micron on December 22, 2020. Decisions on institution are due by the middle of July 2021.
3) The important development that I am tracking and the reason for my conference call questions are pending settlements with Samsung, which indicates the parties have negotiated a global settlement/license across all of their portfolios. Notice of Settlements and litigation stays have been filed/entered on the court dockets in the R2 Solutions LLC (Yahoo/Excalibur) & Stingray IP Solutions (L3Harris) portfolios. I think the value of the deal could be borderline material especially if it included the Newracom portfolio, which includes 212 US patent assets plus their foreign counterparts. I am hoping the deal can be closed shortly and included in the Q2 2021 results disclosed in early to mid August 2021.
The R2 Solutions (Yahoo) is in the early stages with the following defendants remaining:
Target
Walmart
Deezer SA
Workday, Inc
Fidelity Brokerage Services
Charles Schwab
JPMorgan Chase
The Stingray IP Solutions (L3Harris) is also in early stage litigation with:
Signify NV
TP-Link Technologies
There are a few one off small portfolios that are in various stages of litigation that I am working through. I believe the Newracom to be the most valuable portfolio Acacia has acquired to date and look forward to litigation cases filed and updates.
Disclosure: I am Long Acacia ($ACTG) common stock and call options. I am not an attorney or licensed financial professional. All information discussed is publicly available. Please consult a licensed financial consultant. I have not been compensated by anyone to publish this report. Questions, comments, or if you would like to discuss any of the above I am available on a reasonable consulting basis. Email me at iphawk@outlook.com.