In December 2013, Acacia Research Corporation (NASDAQ: ACTG) opened a Houston office to bolster its patent licensing efforts in the conventional oil and gas, unconventional oil and gas, and smart energy industries. Acacia boasts that it is the industry leader in patent licensing. To date, Acacia has generated over US$1,200,000,000 revenue through its licensing and litigation efforts and returned approximately US$705,000,000 to its patent partners. To its critics, however, Acacia is the “Mother of All Patent Trolls.”
Acacia acts as an intermediary in the patent marketplace under various business models. Through its “partnering model,” Acacia asserts patent portfolios from corporations, research labs and universities and individual inventors, sharing the net profits 50/50 after legal and other enforcement costs. Through its “purchasing model,” Acacia acquires 100 percent ownership of patent portfolios, often from distressed corporations or failed corporations controlled by venture capitalists, and keeps 100 percent of the profits. Through its “hybrid model,” Acacia provides up-front capital as an advance on future licensing revenue streams, targeting major corporations seeking to monetize their patent portfolios.
Under these various models, Acacia acts as a patent assertion entity, or PAE, sometimes called a non-practicing entity, or NPE. That is, Acacia does not practice the patent portfolios, does not manufacture products, and does not provide services (except patent licensing and enforcement). As one might expect, Acacia is a prolific filer of patent infringement litigation and, through its subsidiaries, one of the most common filers in the plaintiff-friendly Eastern District of Texas. However, Acacia’s subsidiaries also file in other districts, such as the Western District of Texas, which is home to Austin, and the Southern District of Texas, which is home to Houston.
In July 2015, for example, Acacia subsidiary Rapid Completions LLC asserted in the Tyler Division of the eastern District of Texas a portfolio of six patents that were initially developed and owned by Packers Plus Energy Services Inc., by suing various Baker Hughes, Weatherford, Peak, and Pegasi Energy entities. These patents relate to multi-zonal completion of horizontal wells including ball-drop, sliding sleeve, and packer technology for use in the hydraulic fracturing of both tight and conventional oil and gas reservoirs, as well as unconventional shale formations.
Fast forward to April 2016. Acacia no longer lists its Houston office on its website. According to his LinkedIn page, the former Houston-based Vice President for Licensing, Energy says he left Acacia in February 2016. Acacia’s headquarters in Newport Beach, California confirms the closing of its Houston office.
However, the oil and gas and smart energy industries cannot escape Acacia, with or without a Houston office. In April 2016, Acacia subsidiary Rapid Completions filed in the Houston Division of the Southern District of Texas another litigation asserting an additional patent initially developed by Packers Plus, again suing various Baker Hughes, Weatherford, and Peak entities. The patent generally covers methods and apparatuses for oil and gas wellbore fluid treatments.
Consequently, while Acacia may no longer have a physical presence in Houston, it remains a presence at the Courthouse and in the minds of litigation counsel in Houston’s oil and gas and smart energy industries.
Cite for Mother of All Patent Trolls:
Cite for No Houston Office:
- https://web.archive.org/web/20140725151743/http://acaciaresearch.com/contact/ (listing Houston office)
- http://acaciaresearch.com/contact/ (no Houston office)