IP lawsuits backed by hedge funds and institutions

Apparently the small companies who are taking on the bigger software companies in IP cases are doing so because they are getting huge amounts of legal cash from some companies who see them as an investment.

Forbes cites the case of DeepNines which filed a lawsuit against McAfee claiming one of its products that combines an intrusion detection and prevention system with a firewall infringes its patent. McAfee claims the patent relies on previously known technology.

Forbes says that DeepNines sold an $8 million zero coupon note to Altitude Capital Partners, a New York City private equity firm, promising in return a cut of any winnings stemming from the lawsuit. Altitude insists it is not a patent troll and that it is only asserting legitimate claims. However, analysts are dubbing Altitude and its ilk "arms merchants" in a new range of patent wars. µ