Broadcom issues patent suit broadside targeting LG, Mediatek and Funai

Broadcom launched a number of patent infringement lawsuits against Asian and US companies this week, in what looks to be the Singapore-based chipmaker’s first concerted assertion campaign since its reconfiguration through merger last year. The litigation is the latest step in an escalating value-creation effort on the part of the new entity.
The company’s US unit, Broadcom Corporation, filed six suits in the Central District of California on Monday concerning audiovisual technologies. In court documents seen by IAM, Broadcom states that the accused products targeted by the litigation “are generally semiconductor components… such as, for example, various system-on-a-chip (SoC) and similar processing components and circuits” and “consumer audiovisual products incorporating such SoCs, including… digital televisions, set-top boxes, Blu-ray disc players, DVD players/recorders, DTV/DVD combinations, DTV/Blu-Ray combinations, multimedia streaming players, home theater systems, and other similar audiovisual devices and systems”.

The defendants are LG Electronics, Mediatek and its subsidiary MStar Semiconductor, Japanese manufacturer Funai, US chipmaker Sigma Design and US consumer electronics company Vizio, which is currently the subject of a $2 billion takeover bid from China’s LeEco. The patents being enforced by Broadcom include:
• US patent 7,310,104 – ‘Graphics display system with anti-flutter filtering and vertical scaling feature’ (only asserted against Sigma Design)
• US patent 7,342,967 – ‘System and method for enhancing performance of personal video recording (PVR) functions on hits digital video streams’ (not asserted against Funai)
• US patent 7,590,059 – ‘Multistandard video decoder’
• US patent 8,068,171 – ‘High speed for digital video’ (not asserted against Mediatek)
• US patent 8,284,844 – ‘Video decoding system supporting multiple standards’

Each of the patents was originally assigned to Broadcom Corporation before it was acquired by US-Singaporean semiconductor company Avago Technologies in a $37 billion merger deal announced in May 2015, which saw the combined entity adopt the Broadcom brand.

In its filings with the Central California court, Broadcom provides some eye-catching detail on its R&D and IP holdings. The company claims that from 2015 to 2016, it spent $3.7 billion on product-related R&D, with $2.7 billion of that being spent in 2016 alone. Prior to Avago’s buyout, US-based Broadcom Corporation spent between $2.3 billion and $2.5 billion in the three-year period ending 2014. The filing documents further claim that as of the end of October last year, post-merger Broadcom as a whole held approximately 27,640 patents and 3,020 pending applications worldwide, with its R&D activities resulting in around 350 patent applications each year on average.

By the time the Avago-Broadcom merger was reported as having completed in February 2016, the company had become the owner of one of the world’s largest patent portfolios, easily slotting in among the top 15 holders of US-issued assets. In 2016, the US Intellectual Property Owners Association identified Broadcom (listed as Avago) as the second biggest gainer in terms of US patent grants, its 144% year-on-year growth putting it just behind fellow chipmaker NXP’s 148% increase.

It would seem that there has been impetus from within Broadcom to extract more value from the substantial portfolio it now has on its hands. One notable event in this regard was its assignment of several US patents to Xiaomi in late 2015, which represented the Chinese start-up’s first known straight purchase of third-party patents. In June last year, it sued Sony for alleged infringement of numerous patents, some of which Avago had acquired through its takeovers of LSI and Broadcom Corporation; this was followed by a suit targeting Amazon and its Web Services business in September. The litigation launched in California this week looks like it represents another step in this direction.