Orion IP, now re-christened Clear With Computers, is a patent-holding company controlled by lawyer-investor Erich Spangenberg. Orion/CWC continues to insist that a vast array of online retailers are infringing its patent and thus owe it money.
Today we learn from EFF's Deep Links blog that one of Spangenberg's most profitable patents, the 5,367,627 patent, has been challenged and will face a re-exam at the U.S. Patent Office.
"If you remove the word 'electronically,' the patent covers exactly what sales people have been doing for customers for ages," writes EFF's new IP attorney, Michael Kwun. "Unfortunately for the patent owner (and fortunately for the rest of us), saying 'do it with a computer' does not an invention make."
How profitable is the '627 patent? When you take Hyundai Motor Company to a jury trial in E.D. Texas, $34 million profitable.
The process now underway is called an "ex parte re-exam." It entails a third party asking the PTO to take a second look at the patent to see if it's really valid. Ex parte re-exams can be requested anonymously, and that's what happened here. (The law firm requesting the re-exam, Los Angeles IP boutique Chen Yoshimura LLP, confirmed to me its client chose to remain anonymous.)
Meanwhile, Spangenberg is also appealing a judge's order that he must pay $3.8 million in legal fees to Chrysler for repeatedly suing the company over the same claims; his appeal to the Federal Circuit quickly won him a write-up in PA Tracer, where blogger Kyle Fleming goes through Judge Barbara Crabb's 62-page order more thoroughly than I did; read down to the second half of his post to get some choice quotes and analysis on Judge Crabb's finding that Spangenberg, through a subordinate, attempted to intimidate a witness in the case.
Fleming writes: "Did Spangenberg and Anderson really think this was OK or did they think they wouldn't get caught? If this was the only sanction imposed (and I don't know if it was), then the problem is that there is no real punishment or deterrence for this type of behavior."
One setback, predictably, has led to another. In another one of Spangenberg's "actually, we're not done yet" lawsuits against a car company, Orion IP, LLC v. Mercedes-Benz USA, LLC, 07-cv-00451, E.D. Texas, Judge Leonard Davis threw out Orion IP's patent infringement claims on summary judgement, but allowed Mercedes-Benz to re-plead and move ahead with its counterclaim for breach of contract.
Rather than see a replay of the Wisconsin debacle—they were up against the same legal team from Kilpatrick Stockton—Spangenberg and his lawyers admitted they had breached their earlier "no more lawsuits" settlement agreement, and have agreed to pay $76,500 in legal fees. (Dismissal & judgment, PDF)
Illustration: from Uranographia by Johanus Hevelius, via Wikimedia.
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