The Prior Art

Patent Litigation Weekly: Revealed! How Much Money a "Patent Troll" Makes

This week: a motion filed by a convicted felon/inventor spills the details of how he, patent-holding company SP Technologies, and the Niro Scavone law firm divvied up the loot from a set of suits against top tech companies—including one over Apple's iPhone.

One thing that can make reporting about civil litigation frustrating is that so much of it ends in confidential settlements. Occasionally, though, a ray of light pierces the shroud of secrecy, and it's possible to find out how much money changed hands when a case settles before going to trial. Thanks to an unlikely source—an Iowa ear, nose, and throat doctor currently residing in a federal prison in Wisconsin after being convicted of insurance fraud—we now know how much patent-holding company SP Technologies collected as a result of filing suit against four leading tech companies: $2.17 million.

That information is contained in a motion to intervene filed in July by otolaryngologist Peter Boesen in connection with a pending suit brought by SPT against GPS makers Garmin and TomTom in the Northern District of Illinois. In addition to being a convicted felon, Boesen happens to be the inventor on the patent SPT has asserted in the suit—and in previous suits against Apple, Magellan, and Samsung—as well as a second patent asserted in a suit against LG Electronics.
 

Patent Litigation Weekly: Foley Tries Turning Tables on Spangenberg

This week, the man behind a notorious network of patent-holding companies finds himself in an unaccustomed spot: on the defense.

When it comes to litigation, Erich Spangenberg, well known for running a network of patent-holding companies, is usually a plaintiff. Now, though, he's on the other side of a lawsuit, having been named as a third-party defendant in a dispute between patent-holding company DataTern and its former lawyers at Foley & Lardner.

DataTern—a spinoff of an operating company, Firestar Software—made news last year when it settled a closely watched East Texas patent infringement suit against open source software leader Red Hat Inc. The settlement was considered novel because of the protection it offered to Red Hat's developer community. At the time, the parties kept financial terms of the settlement confidential; it has since been revealed that $4.2 million changed hands. (See Red Hat's press release on this settlement; analysis of the agreement at Groklaw; IPLB profile of Red Hat lawyer Richard Fontana.)

Foley & Lardner, which represented DataTern in the suit, claims it is still owed more than $1.5 million in fees for its work on the case. But rather than paying up, DataTern filed suit against Foley in January, essentially saying the firm did such poor work on the matter that it should be the one doing the paying. With the litigation now heating up, Foley has named Spangenberg, his wife, Audrey, and several related companies as defendants in a third-party complaint filed on October 1.

U.S. Senate committee passes bill against "pay for delay" drug settlements — more in October/November IPLB

The Judiciary Committee of the U.S. Senate passed a bill today that would ban "reverse-payment settlements," which are settlements that end patent litigation between branded and generic drug companies in which the branded company pays money to the generic. The Federal Trade Commission, which calls the agreements "pay for delay" settlements, has been fighting against these settlements for a decade now, but hasn't been doing well in court. Three separate appeals courts have ruled that different reverse-payment schemes are, in fact, legal. Both generic and branded pharmaceutical companies, and lawyers who work for them, have defended the settlements; but the FTC says consumers are losing out on billions of dollars in potential savings.

It's a development that makes the cover story in the October/November issue of IP Law & Business, recently mailed to subscribers, particularly relevant. 

The story looks at the history of how reverse-payment settlements developed, and focuses on what this controversy says about the different views on patent rights held by courts, federal antitrust enforcers, and the drug industry.

It's a hot topic for the drug industry, but the underlying question could affect all patent owners: Are patents truly "property" rights, or merely an option to litigate?

It's available now on IPLB.com: "One Man's Drug War." 

 

Patent Litigation Weekly: Eolas in Texas, Triune Star fee award, and Guardian Media saga moves to appeals court

For Eolas, a Texas address, Dallas lawyers, and Plano targets.

Eolas Technology, a company built on a patent that originated at the University of California, has gone Texan. Eolas—having settled a previous infringement suit against Microsoft after winning a jury verdict of more than $500 million—this week asserted its 5,838,906 patent in a suit filed against 23 companies, including large banks, technology companies, and retailers. The goal, obviously, is to amass a new fortune via the patent wielded against Microsoft, as well its flashier child-patent, No. 7,599,985. The common thread connecting the targeted companies: they all employ browser plug-ins and “AJAX” technologies that have been used in some form on the Web for more than a decade.

Despite that, Eolas attorney Mike McKool of McKool Smith is confident the '906 patent will hold up in the current litigation. Speaking with The Am Law Litigation Daily, McKool emphasized that the patent has already been tested three times in PTO reexaminations. (It’s worth noting, of course, that none of the present defendants were around for those hearings.)

As for Eolas itself, the patent-holding company has evolved since it was last heard from. It had just one employee—Dr. Mike Doyle, who lives in the Chicago area—when it sued Microsoft, and its payroll doesn’t appear to have grown much since then. The Eolas website, however, claims the company now does research and development in addition to enforcing patents, though the links its research accomplishments are mostly brief descriptions of patents or patent applications.