The Prior Art

Will patent-holding companies flock to the International Trade Commission?

Below is an excerpt and link to my most recent story, on patent-holding company Saxon Innovations' complaint filed at the International Trade Commission, published earlier this week on The AmLaw Daily. The AmLaw Daily also has a link to the Saxon complaint. 

Each year a growing number of IP lawyers heads to the International Trade Commission, asking officials there to enforce Section 337 of the Tariff Act of 1930. That Depression-era law forbids various "unfair trade practices," including the importation of products that infringe a U.S. patent--the goal is protecting domestic industries and jobs.

But a new complaint brought by a Texas patent-holding company is looking to stretch the boundaries of what constitutes a "domestic industry" worthy of protection.

Last month, Saxon Innovations LLC filed a complaint asking the ITC to ban importation of six models of cell phones manufactured by Nokia Corp., HTC Corp., Research in Motion, Inc., and Palm, Inc., as well as a television controller created by Panasonic Corp. Saxon argues the devices infringe three of the 180 patents it bought from a spin-off of chipmaker Advanced Micro Devices, Inc., in 2007. Saxon isn't the first patent-licensing operation to file a complaint at the ITC, but a few factors make it stand out even in that small group.

What would the Commission be protecting by issuing an exclusion order on behalf of Saxon? The "industry" begins and ends with Saxon, a company that fits neatly within the definition of what some patent reform advocates call a "patent troll”: five employees, no products or services, a growing trail of litigation, and a leased office in the Eastern District of Texas, a popular venue with patent plaintiffs.

Read the whole story at AmLaw Daily: A New Troll Hangout?

Tough day for Rambus

Rambus, the technology patent-licensing company that's won a string of recent court successes, is getting hammered in the markets today after a Delaware judge ruled that the company had destroyed evidence that was critical to its lawsuit against Micron Technology.

"The very integrity of the litigation process has been impugned," wrote Judge Sue Robinson, who ruled that 12 of Rambus' patents are now unenforceable against Micron.

This is not the first time Rambus has been accused of shredding relevant documents back in the late 1990s. A Virginia judge issued a similar smackdown to Rambus in 2006.

But last year was a good one for Rambus: the Virginia order was overturned rendered moot on appeal, a San Jose jury found that Rambus did not use its patents nefariously, and then the company beat FTC charges against it on appeal. Rambus says it will appeal this most recent ruling, and points out that a Northern California judge who looked at the same facts found no problem.

Rambus stock is down close to 40%. MarketWatch and Reuters have good coverage so far.

Rembrandts: out of the attic! attack! attack!

Patent consultancy Ocean Tomo wants to convince big companies that its patent auctions will help them deal with the problem of patent trolls, or at least lower the cost. Might be a tough sell right now, though, since a patent bought at Ocean Tomo has just been used to demand royalty payments from 13 companies that use—drum roll—social recommendation systems. "If you like X, you might like Y," and don't forget to send a check to Quito Enterprises, LLC. What?

• Quito Enterprises LLC bought patent 5,890,152 at last April's Ocean Tomo patent auction for $1.07 million. Quito, a company that maintains a Delaware address that seems to include a few different law offices, used that patent to file an infringement lawsuit against 13 companies on Dec. 30. All defendants are companies that offer some type of social recommendation system. The patent, filed in 1996 and issued in 1999, describes a system of offering users media files based on their personal tastes and preferences.  Defendants accused of infringing the '152 patent include old-school media companies, Internet heavies, Internet radio sites, and one pure social recommendation engine: Netflix, Amazon, Yahoo, RealNetworks, last.fm, Pandora Media, Slacker Inc., Veoh, Hulu, NBC Universal, CBS, News Corp., and Strands, Inc. Quito filed suit in Miami and is represented by Florida personal injury lawyers Philip Holden and Alex Alvarez, Heninger Garrison & Davis of Birmingham, as well as John Ward and David M. Hill from the very active New York patent shop of Ward & Olivo, likely a key player here. Who exactly is Quito Enterprises? Not to give anyone ideas, but some state record offices are not as transparent as they should be... But I look forward to learning more about Quito shortly. Quito Enterprises, LLC v. Netflix, Inc. et al, 08-cv-23543, S.D. Florida. [complaint on Justia]

Realm of the Lawyer-Inventor: Oprah's Book Club sued for patent infringement

Did patent holding companies throw a year-end party in honor of my vacation? I flatter myself. But there must have been some kind of December discount I didn't know about. In any case, reviewing what happened over the last few weeks I feel a bit overwhelmed. But let's start with an old favorite.

Oprah Winfrey's book club has been sued for patent infringement. Not joking. The inventor is patent attorney Scott C. Harris, who claims to have invented a method of "Enhancing Touch and Feel on the Internet," described in his 7,111,252 patent, which was used to sue Google over its Book Search feature. Shortly after that lawsuit was filed, Harris was fired from Fish & Richardson, the top law firm where he was a partner—Google is a firm client. See my L'Affaire Harris timeline for more. The '252 patent describes a way of displaying three-dimensional objects online. It is being used to sue companies that, like Google, display books electronically.

Illinois Computer Research is the shell company that files lawsuits over the '252 patent. It is owned by a Florida lawyer, James Beauregard Parker, whose connection to Harris and his lawyers at Niro Scavone remains unclear.