Patent Trolls Plague Chip Vendors

MADISON, Wis. — One of the unintended consequences of the M&A feeding frenzy in the semiconductor industry is that more chip vendors are getting targeted by patent trolls.

Jean-Christophe Eloy

Jean-Christophe Eloy

Jean-Christoph Eloy, president and CEO of Yole Développement (Lyon, France), told EE Times that the semiconductor market embodies “all the ingredients” that make it attractive to patent licensing companies (PLC).

A PLC, also sometimes called a non-practicing entity (NPE) or more pejoratively “Patent troll,” neither makes nor markets products. It derives its income from licensing patents to or litigating against operating companies suspected of infringing patent rights, Eloy explained.

(Source: KnowMade)

(Source: KnowMade)

Eloy believes chip vendors have become more vulnerable in recent years. Because of a strong consolidation trend with many mergers and acquisitions in the semiconductor market, a plethora of patents is up for sale, and countless products integrated with semiconductor devices are already on the market.

Eloy shared several key findings based on research done by KnowMade, Yole’s sister company — including identifying the main patent trolls in the semiconductor field, litigation risk assessment from patent licensing companies that acquired patents from 2013 to 2016, and specific patented technologies acquired by patent licensing companies since 2013.

KnowMade’s data shows that between 2013 and 2016, more than 40 NPEs acquired US patents in the semiconductor field. Those NPEs include Wi-LAN, Tessera, Intellectual Ventures and Conversant IP management. 

Topping the list is Wi-LAN Inc. based in Ottawa, Canada. The company acquired 2,048 U.S. patents in 2015, mainly from Infineon/Qimonda and Freescale.

In 2015, the same year the company acquired patents from Freescale and Infineon, Wi-LAN also started to litigate. Yole expects such patent litigation to continue for years.

Meanwhile, Acacia Research Corporation (Newport Beach, Calif.), despite its relatively small stash of semiconductor patents, “has fielded the highest number of patent litigations,” Eloy observed.

(Source: KnowMade)

(Source: KnowMade)

To read the rest of this article, visit EBN sister site EETimes

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