Patent aggregator Spherix (
NYSE:SPEX,
Forum) has announced the company has
signed an MOU to end a patent lawsuit with Chinese tech giant Huawei, leading to a significant ramp up in share price for SPEX even as the markets in general suffered a decline on the day.
Spherix shares jumped 75% through Monday, up from $0.24 to $0.42, though the stock remains down over 70% from its 52-week high of $1.65.
At issue in the case were five patent claims involving routing and switching equipment technology, out of the roughly 300 patents owned by the company. The patents involved were developed by Nortel Networks and relate to moving data across a network.
Spherix called the scope of Huawei’s alleged infringement ‘
immense’ and sought recovery of damages for a portion of the ‘significant revenue associated’, though
similar terminology is often seen in its legal proceedings which are unlikely to be described as understated.
The MOU followed just days after Spherix had what it called a successful
Markman hearing last week, with CEO Anthony Hayes stating, “The results of this hearing are [..] a clear indication of the strength of our legal team and the robustness of our case against Huawei.”
It appears Huawei blinked.
Spherix’s legal actions were further strengthened when the
US Congress pulled bill HR9, AKA The Innovation Act in July, which sought to dampen the activities of ‘patent trolls’, or companies that gather patents with the express intent of threatening lawsuits to companies that may or may not infringe upon them, without ever intending to produce anything with the patent in question.
Spherix put out a news release celebrating the pulling of that bill, with Hayes stating it “should remove some of the uncertainty that has been clouding our industry and acting as headwind on the sector.”
As of mid-July, Spherix was involved in six patent lawsuits against companies such as Uniden, VTech (
OTO:VTKLY,
Forum), Juniper Networks (
NYSE:JNPR,
Forum), Cisco Systems (
NASDAQ:CSCO,
Forum), and Verizon (
NYSE:VZ,
Forum).
In February of this year, the company
rejected a proposal from Marathon Patent to be acquired at a 15% premium.
Spherix CEO Hayes makes no bones about the intent of management to go to the lawyers first and ask questions later,
having stated two months ago, “A famous quote is that you will miss one hundred percent of the shots you don't take. [..] We cannot guarantee a result in any particular case, but we are committed to getting as many shots into the goal as possible.”