Patent attorney Steven Yu wants the patent world to know his new firm Iron Dome LLC, which has filed three inter partes reviews so far this year, will not be an IPR troll like New Bay Capital LLC, which made a name for itself going against VirnetX Holdings Corp. in 2013.

“We’re not like New Bay,” Yu said in an interview. “People think they were a short seller” that shorted the stock of VirnetX while also filing IPRs to invalidate its patents.

New Bay Capital filed IPR2013-00375; IPR2013-00376; IPR2013-00377; and IPR2013-00378 against VirnetX in 2013. VirnetX then hit the IPR troll with subpoenas to find out who was backing it and why. 

VirnetX also accused the company of shorting its stock and using the IPRs to cause its stock to drop. Faced with the subpoenas, New Bay asked the U.S. Patent Office’s Patent Trial and Appeal Board to terminate the proceedings, which it did in November 2013.

Robert Asher, a partner with Sunstein Kann Murphy & Timbers in Boston, who represents New Bay, couldn’t be reached for comment.

Jason Cassady, a partner with the law firm Caldwell Cassady & Curry in Dallas, who represents VirnetX in the fight against New Bay, said much is still to be discovered about New Bay through the discovery process.

“We still don’t know who is behind them,” Cassady said.

Cassady said the use of IPRs by third parties to invalidate patents is an unintended consequence of the America Invents Act approved by Congress in 2013.

“I doubt Congress intended for this kind of behavior,” Cassady said.

“Using IPRs to hide your true intentions is nefarious behavior,” he said. “When people are trying to hide behind the limited discovery available through IPRs to game the system, that’s when I have a problem.”

Cassady said he was unfamiliar with Iron Dome.

For his part, Yu wants to file IPRs on behalf of Iron Dome’s members the same way a more respected Unified Patent Inc. does for large technology companies such as NetApp and Google Inc.

United Patents was formed in 2012 by Kevin Jakel, a former executive at Intuit Inc., and Brian Hinman, who used to be vice president of IP and licensing at InterDigital Communications Inc. Hinman was later replaced as COO of Unified by Shawn Ambwani.

Yu wants Iron Dome to do for small to mid-sized companies what Unified did for the biggest tech companies.

Iron Dome “will be more like Unified Patents, Electronic Frontier Foundation and the Patent Quality Initiative,” Yu  said.

“That is what we do as a business: file third party IPRs to invalidate patents owned by non-practicing entities,” he said.

Yu, a former associate at Kenyon & Kenyon LLC in Washington, D.C. and his undisclosed partners at RozMed LLC, launched Iron Dome in January 2014.

Over the course of its first year, Iron Dome filed third party IPRs against three NPEs.

In October, Iron Dome announced the filing of IPR2015-00055 with the U.S. Patent Office to invalidate Patent No. 7,191,233 that is being used by CRFD Research to sue Cablevision, Spotify, Netflix, and others for products featuring session handoff capabilities. Session handoff is the capability to interrupt an email or pause a video session on one device and resume it on another.

In August, the firm filed IPR2014-00439 against e-Watch Inc.’s Patent No. 7,365,871, which has been used to sue Apple Inc..

Back in April, Iron Dome filed IPR2014-00674 with the U.S. Patent Office to revoke Patent No. 7,047,482, which is a owned by Chinook Licensing LLC and is being used to sue Facebook Inc.,, Hulu and others for having websites that make recommendations to users about items they may like.

Prior to filing the IPR, Iron Dome sent Chinook the fully-drafted 108-page IPR with a settlement offer. Iron Dome asked for three transferable licenses to settle the dispute and enclosed a draft license agreement. When Chinook refused, Iron Dome filed the IPR petition.

Chinook then brought a lawsuit against Iron Dome in U.S. District Court for the District of Delaware alleging tortious interference under Virginia common law. Chinook later amended its complaint adding Racketeer Influenced & Corrupt Organizations Act violations and conspiracy to violate RICO.

Yu declined to comment on any of the IPRs, because the cases are still pending.

For his part, Unified’s Jakel said “In Iron Dome's actions against Chinook and e-Watch, it appears that Iron Dome is trying to play both sides.  I can't see many NPEs or companies wanting to be much involved in this kind of activity."

When Iron Dome was founded, the idea was to locate and destroy patents before they could be used to shake down technology companies.

The name Iron Dome is seen by many as an allusion to the missile defense system of the same name deployed in the 2012 Gaza-Israel war by the Israeli Defense Force to intercept rockets fired by Hamas forces.

Yu would not comment on whether the Iron Dome system used by the Israeli Defense Force was the metaphor for his firm’s business model, though the firm’s website has several still shots of a missile being deployed.

“A lot of people point out that we intercept patents before they can be used to sue tech companies,” he said. “if one of our members gets sued, we do try to intercept the patent in mid air.”

And that is the business model Yu and his colleague Loree Kim have chosen, perfected and expanded over the past year.

In October, Iron Dome announced that it was offering paid memberships to small to mid-sized companies worried about being sued by NPEs.

The firm charges a sliding scale for membership which takes into account a members size based on annual revenue and an analysis of its exposure to patent trolls.

“We’re targeting small to mid-sized companies with less than $700 million in annual revenue,” he said. “Most NPE lawsuits are targeted against companies with less than $100 million of revenue.”

While Iron Dome says on its website it charges $8,000 to $89,000 for a membership, it doesn’t charge startups any money at all. And to date it has signed up only two startups for its service. 

Yu said Iron Dome plans to be as flexible with members as possible with regard to payment. Indeed, he said the firm may consider accepting stock as payment.

“The value for the cost of the membership is the ability to have a third party IPR filed. This gives them the ability to walk out of an NPE lawsuit,” he said.

One thing Iron Dome won’t do is acquire patents the way RPX Corp. and Unified do. 

San Francisco-based RPX is a defensive patent aggregator that uses membership fees to acquire patents to keep them out of the hands of trolls.

RPX also uses the money to file third party IPRs the same way New Bay, Unified and Iron Dome does.

Yu said unlike RPX, Iron Dome “has no interest in buying any patents.”
Yu declined to identify Iron Dome’s two members.

“There are two aspects the USPTO uses to determine the real party of interest,” he said. 

The USPTO looks at who controls the IPR and who funds it, he said.

“We file the IPR independently so our members don’t become the real party of interest,” he said. “To comply with that also instead of using membership fees we get outside loans for each IPR.” 

Iron Dome gets loans from litigation financing companies and individual investors who are completely unrelated to the IPR and underlying enforcement action.

“By creating this vehicle, this membership club, which has complete autonomy and independent funding, we can avoid our members being viewed as the real party of interest.”

Asked whether the law was settled with regard to whether such membership clubs can shield members from being the real party of interest, Yu said it was.

“Unified Patents was able to use that approach,” he said. “Simply by saying they controlled the IPR, they didn’t even have to get to the funding issue.

“Electronic Frontier Foundation said the same thing in its IPRs,” he said. “These artificial walls are not foreign concepts. We’re making sure the walls are in place. We think these are really solid walls.”

Unified’s Jakel said that it is not entirely clear how Iron Dome is operating under the new business model but “even when there is no direct control over an IPR, the PTO has still found third-parties to be real parties in interest.”

He cited the case of Troll Busters (In re Guan), which allowed companies to “select patents they wanted killed in exchange for a fee, even though the company had no control over the filing.” He said with Troll Busters “there was an explicit agreement to directly fund the filings. And the PTO said that was not allowed.”

The USPTO also rejected a set of IPRs filed by RPX against VirnetX because it considered Apple Inc. to be a real party in interest.  The USPTO appeared to find an implied agreement between RPX and Apple to file specific IPRs and, thus, denied institution of the IPRs.

Jakel said it is unclear how Iron Dome's new business model is different from these fact patterns. He said there seems to be an explicit agreement to file IPRs on patents asserted against its members and collecting money for the service. 

In the meantime, Jakel said it appears Iron Dome is “attempting to copy a fair amount from what Unified has built. But they seem to be offering agreements to attack the specific patents, i.e., those patents asserted against their members. That’s not Unified’s business model.”

What Unified has tried to do is create a deterrent around strategic technology areas, called zones, such as cloud storage, content delivery and electronic payments. 

Unified's deterrent solution tries to give tech companies an alternative to simply accepting the typical serial NPE litigation those technologies have experienced.

Like Iron Dome, Unified charges a sliding scale and offers free memberships to small companies and startups.  But unlike Iron Dome, RPX and others, Unified is technology specific, meaning that companies can sign up and pay for memberships in one or more zones.

Unified's deterrent solution tries to change the NPE environment in the protected zones using a host of tools that attempt to deter NPE activity, including filing IPRs and purchasing patents as well.

Additionally, it gets free members to sign a notice agreement, which requires them to notify Unified before selling their patents to an NPE.  

To be sure, Unified doesn’t purchase patents from NPEs, nor does it ever pay NPEs to settle litigation, he said.

Unified has only filed 7 IPRs since its inception in the summer of 2012, including an IPR petition pending against Clouding IP, a unit of Erich Spangenberg’s IP Navigation Group.

“We are not a litigation strategy,” Jakel said. “Unified protects a strategic technology by monitoring the technology area, doing our own research, and conducting our own validity analysis. And when we find invalid patents owned by NPEs, we can select one for an IPR in order to create the greatest deterrent in a zone.”

“Unified is hired to independently protect a technology zone,” he said. “We alone decide how to create deterrence for our technology areas and when it comes to filing an IPR, our members don’t know if we are even contemplating filing an IPR before we file.”

Yu declined to comment on how Iron Dome goes about making decisions on which IPRs to file.

Iron Dome currently has a staff of two patent attorneys, Yu and Loree Kim, but may expand as needed by including additional patent attorneys as demand increases.

Yu earned an undergraduate degree in mathematics from Duke University and a medical degree from Columbia University, College of Physicians & Surgeons. He attended law school at George Mason University in Arlington, Virginia.

Kim, who is vice president of business development at Iron Dome, previously founded the patent law firm Inspire Patents PLLC.

Kim has practiced patent law for over a decade. She served as chief intellectual property officer of CeloNovo BioSciences Inc. from December 2008 to September 2011.

She earned a Ph.D. in chemistry and biochemistry at the University of Colorado, Boulder and attended law school at the University of Washington in Seattle.

Yu’s experience representing medical device companies in private practice and Kim’s experience representing biotech, pharma, and medical device companies have shaped their perspective in anticipating NPE enforcement activity against various biomedical companies.

“We foresee medical device and diagnostic companies as potential NPE targets,” said Kim.

“Universities outside the U.S. have already starting selling medical device and biotechnology patents to NPEs,” she said.

“This is only the tip of the iceberg,” she said. “We’re anticipating the demand. Some fear the next wave will be pharmaceuticals, medical devices and biotech.”

For his part, Yu said Iron Dome “is in this for the long term. NPEs are not going away. They’re going to evolve. They’re going to become more sophisticated.”

The changing dynamic of the NPE universe is a challenge for which Iron Dome seems prepared.

“The main problem with the patents the NPEs are asserting is they have been junk patents. They need to focus more on valid patents. That’s what Erich Spangenberg says. They have to adapt. With the Supreme Court’s Alice decision, IPRs are also here to stay.”

“What NPEs have to do is much more due diligence on the validity of patents,” he said. “The cream is going to rise to the top and the junk patents will drop out. Valid patents will increase in value. They may double or triple in value and junk patents are going to be worth zero.”

While all patents — both the cream and the junk — are currently lumped together, Yu said that may be changing.

“In regards to valuation, all patents are currently put in the same bucket,” he said. “There needs to be more differentiation based on the validity of the patent.”

Perhaps with its IPRs aimed at junk patents Iron Dome will help that differentiation along.

“It takes an individual approach,” he said.

To contact the reporter responsible for the story, please call Dan Lonkevich at 707 318-7899 or email him at