| LEGAL PROCEEDINGS |
NOTE
J – LEGAL PROCEEDINGS
| [1] |
On
September 8, 2025, the Company’s wholly-owned subsidiary, HFT Solutions, LLC, commenced
patent litigation against Optiver US, LLC and Optiver Trading US, LLC (“Optiver”)
in the United States District Court for the Western District of Texas for infringement of
certain patents within the Company’s HFT Patent Portfolio. On November 21, 2025, the
Optiver defendants filed their answer and counterclaims of non-infringement and invalidity
of the asserted patents. On October 5, 2026, the U.S. Patent Trial
and Appeal Board (PTAB) of the U.S Patent and Trademark Office denied the institution, on
the merits, of five Inter Partes Review proceedings requested by the Optiver defendants relating
to five patents within the Company’s HFT Patent Portfolio which are not currently being
asserted in the litigation by the Company. |
| [2] |
On
June 27, 2025, the Company commenced patent litigation against Samsung Electronics Co., LTD
and Samsung Electronics America, Inc. (collectively, “Samsung”) in the United
States District Court for the Eastern District of Texas, Marshall Division, for infringement
of six patents within the Company’s M2M/IoT Patent Portfolio. The lawsuit alleges that
Samsung infringes the Company patents by supporting certain eSIM (embedded
Subscriber Identification Module) and certain 5G technologies in its mobile devices,
including its Galaxy smartphones, watches and tablets. A trial
date has been scheduled for June 7, 2027. In April and May 2026, the U.S. Patent Trial and
Appeal Board (PTAB) of the U.S. Patent and Trademark Office denied the institution,
on the merits, of six Inter Partes Review proceedings requested by Samsung, relating
to all six patents being asserted by the Company in the litigation. |
| [3] |
On
December 24, 2024, the Company’s wholly-owned subsidiary, HFT Solutions, LLC, initiated
patent litigations against Citadel Securities, LLC (“Citadel”) and Jump Trading,
LLC (“Jump”) in the United States District Court for the Northern District of
Illinois for infringement of certain patents within our HFT Patent Portfolio. In
the Citadel action, on April 7, 2025, the defendant Citadel filed a motion to dismiss under
35 U.S.C. § 101, asserting that the asserted patents are directed to patent-ineligible
subject matter. On December 1, 2025, the Court denied Citadel’s motion to dismiss.
On January 5, 2026, Citadel filed its answer asserting defenses of non- infringement, patent
validity and counterclaims for the same. On April 7, 2025, defendant Jump filed an answer
and counterclaims of non-infringement and invalidity of the asserted patents. On May 19,
2026 and June 2, 2026, the PTAB denied institution of two IPRs filed by Citadel with respect
to two of the patents asserted by the Company against Citadel in the litigation. On July
1, 2026, the Company dismissed without prejudice its patent infringement case against Jump.
Depending upon future developments in the industry or otherwise, the Company may decide to
revisit potential IP causes of action against Jump in order to protect its intellectual property
rights. |
| [4] |
On
April 4, 2014 and December 3, 2014, the Company initiated litigation against Google
Inc. (“Google”)
and YouTube, LLC (“YouTube”) in the U.S. District Court for the Southern District
of New York for infringement of several of its patents within its Cox Patent Portfolio which
relate to the identification of media content on the Internet. The lawsuit alleges that Google
and YouTube have infringed and continue to infringe certain of the Company’s patents
by making, using, selling and offering to sell unlicensed systems and related products and
services, which include YouTube’s Content ID system. In
April 2024, following a motion for summary judgment by defendants, the U.S. District Court
for the Southern District of New York issued a judgment dismissing the Company’s patent
infringement claims.
|
On
May 14, 2024, the Company filed a notice of appeal to the U. S. Court of Appeals for the Federal Circuit. On April 23, 2026, the U.S.
Court of Appeals for the Federal Circuit issued a decision on the appeal overturning the judgment of non-infringement of the U.S. District
Court for the Southern District of New York relating to the Company’s Patent No. 8,205,237 (the “ ’237 Patent”)
for certain implementations of Google’s Content ID system. The Federal Circuit also affirmed the District Court’s judgement
that (i) certain claims in other asserted patents were invalid, and (ii) a previous implementation of Content ID does not infringe the
claims of the ’237 Patent. The Federal Circuit remanded the case to the District Court for further proceedings on the infringement
case consistent with its decision. A trial date has been scheduled for December 8, 2026.
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