HFT Solutions, LLC, a wholly-owned subsidiary of publicly traded Network-1 Technologies, Inc., has filed separate Northern District of Illinois complaints against Citadel Securities (1:24-cv-13213) and Jump Trading (1:24-cv-13214) in which it alleges infringement of three patents generally related to processing data streams using a certain field programmable gate array system. Targeted is the provision or use of field programmable gate array "systems and platforms", as well as trading systems and platforms that include FPGA boards (including those manufactured by AMD (Xilinx)).
The asserted patents (10,931,286; 11,128,305; 11,575,381) belong to a family of six with issue dates ranging from November 2020 to October 2024. Sole named inventor Nima Badizadegan assigned them, together with a separate family of five (of similar subject matter), to HFT Solutions in four March 25, 2022 transfers. On social media, Badizadegan tags himself as a "Builder and technology entrepreneur" with two current positions: "Principal Investigator" with T0 Labs (from November 2021, identifying on its public website "Application-specific Computing", "Computer Arithmetic", "Randomness", and "Clock and Time Synchronization" as research areas); and CTO with Aimcast (from November 2024, "Connecting people with the content that helps them be productive" through AI technology).
The family from which the asserted patents are drawn has estimated priority in November 2018; the other transacted family, in February 2019. According to Badizadegan's online work history, those dates fall between a July 2016-February 2018 stint as an "FPGA Developer" with Hudson River Trading and a March 2019-November 2021 position as "Senior Software Engineer" with Alphabet (Google), where Badizadegan reports that he "[d]esigned software for Google storage infrastructure".
On March 28, 2022, Network-1 announced that "its newly formed subsidiary, HFT Solutions, LLC, has acquired a patent portfolio covering certain advanced technologies relating to high frequency trading (the 'HFT Patent Portfolio')". It characterized the acquired assets as relating "to technologies used by firms engaged in high frequency trading activities" and "specifically address[ing] technological problems associated with speed and latency and provide critical latency gains in trading systems where the difference between success and failure may be measured in nanoseconds".
HFT Solutions was formed in Delaware on March 17, 2022, with court disclosures identifying Network-1 as its full owner. Network-1 is perhaps best known for its direct litigation of a single patent, which it characterizes as "the most important patent covering products that comply with the 802.3af standard". That campaign began 20 years ago and remains active, with a summary judgment pending before District of Delaware Judge Maryellen Noreika in an October 2022 suit against Ubiquiti. Network-1 has claimed that this patent (issuing to Merlot Communications in April 2001) has generated more than $187M in licensing revenue over the years.
For coverage of past events in this campaign, as well as Network-1's other, smaller litigation campaigns, see "Network-1 Extends Litigation over Battle-Tested—But Expired—PoE Patent" (October 2022), with an update here. On December 4, 2024, the Federal Circuit affirmed summary judgment of noninfringement in a Southern District of New York case filed in May 2017 against Meta Platforms (Facebook), appearing to end, at least for the moment the litigation campaign of Network-1's Mirror Worlds Technologies, LLC subsidiary. That now-affirmed summary judgment occurred in a remand proceeding following an even earlier appeal. In this more recent decision, the appeals court declined to review the district court's denial of Facebook's motion for summary judgment under Alice.
Describing itself as "engaged in the development, licensing and protection of its intellectual property assets", Network-1 identifies Corey M. Horowitz as having been its CEO and chairman since 2003. In its more recent SEC filings, Network-1 has described its current patent holdings as consisting of 104 patents and as "including (i) the Cox patent portfolio (the 'Cox Patent Portfolio') relating to enabling technology for identifying media content on the Internet and taking further actions to be performed after such identification; (ii) the M2M/IoT patent portfolio (the 'M2M/IoT Patent Portfolio') relating to, among other things, enabling technology for authenticating, provisioning and using embedded sim technology in next generation IoT, Machine-to-Machine, and other mobile devices, including smartphones, tablets and computers; (iii) the HFT patent portfolio (the 'HFT Patent Portfolio') covering certain advanced technologies relating to high frequency trading, which inventions specifically address technological problems associated with speed and latency and provide critical latency gains in trading systems where the difference between success and failure may be measured in nanoseconds; (iv) the Mirror Worlds patent portfolio (the 'Mirror Worlds Patent Portfolio') relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system; and (v) the remote power patent (the 'Remote Power Patent') covering delivery of power over Ethernet (PoE) cables for the purpose of remotely powering network devices, such as wireless access ports, IP phones and network based cameras".
In a 10-Q covering the third quarter of 2024, Network-1 reported that it generated no revenue in the three months up to September 30 in either 2023 or 2024; $820K and $100K, in the nine-month period leading up to that date in each year, respectively. It discloses that all of the patents in its Cox, Mirror World, and Remote Power portfolios have expired, while those of the patents in its HFT Portfolio "range from October 2039 to February 2040", and that those in its M2M/IoT portfolio "range from September 2033 to May 2034". Network-1 indicates that Badizadegan retains an interest in any proceeds from its litigation of his former patents:
The Company paid the seller $500,000 at the closing and has an obligation to pay the seller an additional $500,000 in cash and $375,000 of the Company's common stock (up to a maximum of 375,000 shares) upon achieving certain milestones with respect to the patent portfolio. The Company also has an additional obligation to pay the seller 15% of the first $50 million of net proceeds (after deduction of expenses) generated by the patent portfolio and 17.5% of net proceeds greater than $50 million.
Similar arrangements encumber any proceeds from Network-1's other litigation campaigns. Litigation counsel—Russ, August & Kabat, for the Cox portfolio (still active though an appeal in a case filed against Google (YouTube) in 2014, the district court there granting summary judgment of noninfringement as to one asserted patent; invalidity due to indefiniteness, as to others) and for the Mirror Worlds portfolio; and Doel & Luner, LLP, for the PoE patent from Merlot—also have contingent interests in any recoveries.
Network-1 acquired its M2M/IoT patent portfolio through a series of 2017 transactions from M2M and IoT Technologies, LLC, an IP development company headed by individual named inventor John A. Nix. There, Network-1 "is obligated to pay M2M 14% of the first $100 million of net proceeds (after deduction of expenses) and 5% of net proceeds greater than $100 million from Monetization Activities (as defined) related to the patent portfolio. In addition, M2M will be entitled to receive from the Company $250,000 of additional consideration upon the occurrence of certain future events related to the patent portfolio". Again, "[n]o such payments were made or accrued by the Company during the nine months ended September 30, 2024 and 2023". For more on Nix, M2M and IoT Technologies, see "Lighting Patent Portfolio Divestiture Headlines Recent Patent Assignments" (October 2024).
Russ August & Kabat also filed the HFT Solutions cases. In its December 26, 2024 press release announcing these new suits, Network-1 misidentifies the plaintiff as "HFT Solutions Technologies, LLC". The Citadel case has been initially assigned to District Judge Sharon J. Coleman; the suit against Jump Trading, to District Judge John J. Tharp Jr. 12/24, Northern District of Illinois.
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