A recent Supreme Court ruling regarding where patent lawsuits can be heard is another bruising hit for Newport Beach-based Acacia Research Corp. and could affect the local economy.
The high court outlined strict standards in its unanimous decision: A patent owner can sue corporate defendants only in districts where the defendant is incorporated or has committed acts of infringement, and has a regular and established place of business.
The decision primarily affects the U.S. District Court, Eastern District of Texas, a hotbed of patent litigation in recent years, and to a lesser extent, the Central District of California in Santa Ana.
Acacia, which licenses patents and litigates infringement claims, has brought several cases to each district. It fears the ruling could have a chilling effect on the industry and make it harder to bring legitimate infringement cases to court.
“It further solidifies what’s going on in the courts, making it much more difficult or challenging to do patent licensing,” spokesperson Rob Stewart told the Business Journal.
While Acacia boosted revenue last year 22% to $152.6 million, it logged a loss of $54 million, its fourth sizeable loss in as many years as licensing patents and winning infringement claims against industry giants has become much more difficult and harder to project in quarterly outlooks, not to mention extremely costly. Acacia shares traded as high as $19 at the end of 2014. They began trading in the second half of this year at $4.10, down nearly 80% to a market cap of $206 million.
Both the Texas and California courts are seen as patent-owner friendly, but more so in Texas, where a judge created a set of patent rules about a decade ago. That district accounted for 1,387 patent cases in the first six months of 2015, or roughly 44.4% of all U.S. cases, according to a study by San Francisco-based Electronic Frontier Foundation.
The court in 1999 logged only 14 patent cases.
In recent years a cottage industry around patents sprung up there, despite its remote location on the Texas and Louisiana border largely void of tech companies. A similar cluster formed in Orange County, giving rise to corporate patent law firms and related services here.
Trace3 Gets Miami Partner
Miami private equity firm H.I.G. Capital has made a strategic investment in Trace3 Inc.
The financial terms of the deal were not disclosed.
Trace3 is a fast-growing IT service provider that relies on a network of technology consultants to sell goods and services to businesses. The company, launched in 2002 by entrepreneur Hayes Drumwright, has annual sales topping $500 million.
“Our partnership with H.I.G. gives me great confidence that the company will continue to build on its outstanding reputation for creating innovative technology solutions to long-standing client business challenges,” Drumwright said in a statement.
H.I.G. Capital has more than $21 billion in equity capital under management, and investments in about 200 companies.
Russell Indexes Add Iteris
Santa Ana-based Iteris Inc. should get some added exposure to investors from its new membership on the broad market Russell 3000 Index.
The reshuffled Russell Global, Russell 1000, Russell 2000, Russell 3000, Russell Midcap, and Russell Microcap Indexes began trading late last month. They include the 4,000 largest U.S. stocks through May, ranking them by market capitalization. The indexes are widely used by investment managers and institutional investors for index funds and benchmarks for investment strategies.
About $8.4 trillion in assets are benchmarked against Russell’s U.S. indexes.
Iteris, which recently expanded its business model from providing primarily transportation data to selling agriculture and weather insights, had a recent market value of about $204 million. Its share price is up about 70% this year.
