Thursday, January 16, 2014

Setback in Blue Calypso v Groupon et al Case

Blue Calypso (BCYP) put out a press release announcing they joined Defendants stay in their case against Groupon, Yelp, and Foursquare pending the results of the recently instituted Inter Partes Reviews (IPR) at the Patent Trial and Appeal Board.  The February Markman is now canceled indefinitely and will be resumed if the patents in question survive the PTAB review.

It is my opinion the IPRs present a serious problem and risk for the future of the company.  The IPR reviews are supposed to be completed within a 12-18 month time frame, which potentially provides a long wait for investors.  A substantial portion of BCYP's valuation is tied to its litigation success, which now has a long road to get through.  The results of the PTAB IPR process have not been very favorable so far for patent owners.  Hopefully the Blue Calypso patents reverse that trend.

If the patents survive IPR, it would provide substantial value to their case as defendants would not be able to re-argue invalidity again with the same prior art.  BCYP would have to prove infringement and damages at trial.

If the patent patents are found invalid at the PTAB, BCYP would have the option to appeal at the US Court of Appeals for the Federal Circuit.  If confirmed invalid by the CAFC the patents would be invalid and the outstanding lawsuits would terminate.

I was impressed with Blue Calypso's press release, which adequately notified investors of the development.  While no one ever wants to report bad news, I thought they did the best job possible in light of the situation.


If there are any factual errors in my analysis please let me know.




  1. Thanks for your work IPHawk/Flyers (are you a Philly fan?) I was thinking about getting into a position with Blue, but will wait this one out and watch from the sidelines. My plan right now is to go all-in on Worlds, hoping for the Activision MSJ denial. Judge Casper wait forever? Can she? Good luck!

  2. I don't recommend going all in on any stock. I think there is a good chance the MSJ is not denied and the investment is cooked. In my opinion ATVI has submitted very strong arguments. Either way I think it would be better to wait for the MSJ decision and a Markman hearing is scheduled. Better buy without the risk involved.

  3. Thanks IP, I appreciate the response. My average buy-in is around .20. Good point though, an MSJ approval would crush WDDD in my opinion. I still need to make up some losses from the VRNG debacle of 2012/2013. Also, I see it's strange that BCYP is holding up so well even with their PTAB delay.