St. Luke’s Cloud Computing Patent Litigation Campaign

In a matter of two years, St. Luke Technologies (“St. Luke”) filed a total of 26 district court cases against a variety of technology companies in the cloud computing space.  The patents asserted by St. Luke in its patent litigation cases involved encryption and real-time data distribution.  The defendants targeted in the lawsuits were both providers of allegedly infringing platforms and infrastructure utilizing encryption and users who provide software using such platforms and infrastructure.

As show in the chart below, over the two years that St. Luke actively asserted its assigned patents, the longest case was pending no more than six months and only 7 of the 26 cases even had Answers filed – and all of those were settled shortly after.  Even with cases filed against 26 defendants involving around a dozen patents, no USPTO PTAB cases (IPR or CBM) were filed against any of St. Luke’s patents.  St. Luke first filed its cases against larger players heavily invested in cloud computing and apparently waited for those matters to settle before filing cases against companies that utilize cloud technologies to implement aspects of various services provided.

NPE St. Luke's Litigation Chart

While St. Luke’s is most certainly a Non-Practicing Entity (NPE), its filed Complaints were structured in a manner that highlighted the inventors and used the story of their patented innovations to humanize the cases in a way that made it seem to be something more than a typical NPE.[1]  The typical Complaint described in detail encryption throughout the ages, starting with ancient Egyptian hieroglyphs – to encryption in the mechanical age with the Enigma device – to the development of public key encryption – ending with an introduction of the inventions claimed in its asserted patents.  Interestingly, peppered throughout the Complaint were quotations from executives at the companies against which St. Luke asserted its patents – quotes from white papers about systems allegedly similar to those claimed in St. Luke’s patents, on the importance of protecting intellectual property, the value of encryption systems in cloud computing, etc.  These quotes appear to be strategically tied to the description and asserted claims of the St. Luke patents, for example, quotes from an HP datasheet about the necessity of encryption to protect sensitive data in a cloud computing world.[2]

In a further attempt to humanize St. Luke beyond a NPE, the Complaints indicated that “St. Luke is committed to advancing the current state of innovation in the field of data encryption technologies for secure communications over a distributed network.”[3]  Further that “St. Luke depends on patent protection to effectively license its innovative technologies and build its business.”[4]  However, St. Luke appears to have been founded for the sole purpose of asserting a portfolio of acquired patents.

St. Luke filed its Certificate of Formation as a LLC in Texas in May 2015, receiving assignment of a portfolio of patents in late August the same year.  Shortly after receiving assignment of its patents, St. Luke began to file its cases in the Eastern District of Texas with a first round of cases filed late September through October 2015, a second round filed April through May 2016, and a final round filed in August 2016.  After the last case settled in early 2017, it appears that St. Luke filed its Certificate of Termination on May 25, 2017.  Shortly after termination, it also appears that St. Luke sold its portfolio of asserted patents to RPX – a corporation that defensively buys patents identified as high risk to members of its client network while promising to never assert acquired patents.

St. Luke followed the NPE playbook (i.e., file lots of cases, settle quick, and cash out or start another patent assertion campaign) that many companies have been subject to for years and applied it the cloud computing space.  As is well known, high technology companies have faced hundreds of lawsuits over the last decade on software or “internet” patents.  We expect that litigation trend to increasingly shift toward cloud computing.

 


[1] None of the inventors were named as plaintiffs and did not appear to be involved in the litigation.  The owners of St. Luke appear to have previously owned several entities that operated in a similar manner and asserted patents in a cluster of district court cases in late 2015 (e.g. Virtual Gaming Technologies, LLC filed 20 patent cases in the Eastern District of Texas).

[2] Compl. For Patent Infringement against HP ¶ 24, Sep. 22, 2015.

[3] Id.at ¶ 27.

[4] Id. at ¶ 28.

By | 2017-08-31T22:22:57+00:00 August 31st, 2017|High Volume Plaintiff, NPE|Comments Off on St. Luke’s Cloud Computing Patent Litigation Campaign

About the Author:

Heather Hedeen
Heather’s practice at Shook, Hardy & Bacon L.L.P. centers on patent prosecution, counseling and other intellectual property work. She frequently analyzes patent portfolio lots, conducts early case assessment, writes cease-and-desist letters and drafts patents. Her work also includes assisting with litigation risk assessment and cybercrime issues.