United States: Fundamental Innovations Steers Its USB Charging Campaign Toward The Automotive Industry

Until recently, private equity-backed NPE Fundamental Innovation Systems International LLC (FISI) had squarely focused its USB charging campaign on device makers, hitting roughly 15 such companies over former BlackBerry patents since late 2016. FISI may now be shifting gears. This past week, the NPE sued a group of car makers and parts suppliers over the provision of USB media ports and vehicles equipped with such devices.

As in its previous suits, FISI's new complaints against Aptiv and General Motors (2:21-cv-00282); Denso and Toyota (2:21-cv-00281); and Hyundai (2:21-cv-00283) assert a subset of USB connectivity patents from the over 55 US assets (plus foreign counterparts) that the NPE received from BlackBerry in 2015. The four patents-in-suit (6,936,936; 7,239,111; 7,453,233; 8,624,550) are among the 18 patents that FISI has previously litigated, with prior infringement allegations focused on the defendants' provision of USB charging adapters (including wall chargers, car chargers, desktop chargers, and power banks) or USB charging devices and/or Chromebooks, laptops, smartphones, and tablets, etc., that include such devices.

Campaign defendants have included Apple, Anker Innovations (Fantasia Trading), Aukey, BBK Electronics (One Plus), BLU Products, Cyber Power Systems, Hon Hai Precision Industry (Belkin), Huawei, Jasco Products, Lenovo, LG Electronics, Samsung, TCL (TCT Mobile), Yulu Computer (Coolpad) and ZTE. Of these defendants, only Fantasia Trading and Cyber Power Systems (sued in March of this year) and Lenovo (the case against which has entered claim construction) remain active as of the publication date of this article.

FISI's July 26 complaints target USB charge ports and "original or replacement parts that are or include such USB media ports or USB charge ports" and vehicles with USB media ports that "provide more than 500mA of current (e.g., charging downstream ports ("CDP"))". GM, Toyota (including Lexus), and Hyundai (including the "Tuscon, Elantra, Santa Fe, Palisade, Sonata, and Genesis brand") vehicles, each starting from "model year 2019" and having at least one USB port, are specifically called out.

According to those complaints, FISI sent notices of infringement to each of the car makers between 2019-2020. GM is alleged to have referred FISI to its part supplier Aptiv, the latter having allegedly engaged in licensing negotiations with FISI "throughout 2021" but purportedly with "little progress" having been made. Hyundai (which according to FISI manufactures its own USB ports) and Toyota (as well as Toyota's supplier, Denso), have allegedly declined to respond to FISI's notices.

As noted, FISI acquired its patents-in-campaign from BlackBerry in 2015. The terms of that acquisition were not made public at the time, but filings in subsequent lawsuits between IP consulting firm Ocean Tomo, LLC and former Ocean Tomo executive Michael Friedman revealed that the assignment resulted from a multi-million dollar deal between BlackBerry and Centerbridge Partners, a private equity firm with an estimated $1.15B in assets under management. Details concerning that deal are available here.

FISI initially engaged TnT IP LLC-a patent monetization firm managed by Craig Thompson and Ozer Teitelbaum, both former senior IP executives at Alcatel-Lucent-to license its portfolio. However, in 2018 (amid Samsung's settlement with FISI), IAM Magazine reported that the firm had been replaced by three former senior executives at IPVALUE Management, Kapu Kumar, Paul Seaman, and Paul Riley. (Indeed, Texas public records now identify each of Kumar, Seaman, and Riley as a "governing person" of FISI, along with Eugene Davis, of Livingston, New Jersey.) In April of 2019, Kumar, Seaman, and Riley co-founded New Jersey-based JASPAR - IP Consultants, an apparent patent monetization consultancy. According to IAM, John Desmarais, who partnered with IPVALUE on monetizing the Round Rock Research portfolio, introduced Centerbridge Partners to the JASPAR team.

Also according to IAM, this same team (and again with backing from Centerbridge) last year acquired over "1,400 worldwide patent assets from lighting business Osram" and has since moved the portfolio from one Irish entity (Key Patent Innovations Limited) to another (Pictiva Display International Limited).

Furthermore, USPTO records reflect the movement this year of a large portfolio of patents between HP Enterprise (HPE), Ocean Tomo (OT Patent Escrow LLC), and Valtrus Innovations Limited, another NPE that Irish corporate records tie to the same group of individuals. More well-funded litigation from this team, again over former operating company patents, looks likely in the coming months. 7/26, Eastern District of Texas.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.