The Prior Art

Recent Patent Litigation Weekly Columns

 

Much of the patent news that was published on this blog has been moved to the IP Insider section of the Corporate Counsel website. Here's a list of the last several Patent Litigation Weekly columns—

 

Oct. 25, 2010: Big Patent-Licensing Deals Push Acacia Earnings to a Stunning High

No one has filed more patent lawsuits against corporate America than Acacia Research. But Acacia CEO Paul Ryan says corporations are embracing, not rejecting, his business — and the company's new numbers prove it.

 

Oct. 18, 2010: Call it the Canadian Bilski

Citing U.S. patent laws, rejecting the European view, and opening the door to a potential rush on business-method patents up north, a Canadian judge says Amazon's controversial 'one-click'

 

Oct. 4, 2010: NPE Makes Offer Some Companies Can Refuse

Offered the chance to cough up $80,000 apiece to license a patent once held by Intellectual Ventures, drugmaker Novartis and auto parts manufacturer Tenneco decided to fight back instead.

 

Sept. 27, 2010: Uniloc Keeps Filings Software Suits, and NPE Patents Fare Poorly at Trial

Undeterred by its district court loss to Microsoft — and waiting on a Federal Circuit appeal in any case — Uniloc sues dozens of companies for 'software activation.' Plus, a new study shows that troll patents don't hold up at trial.

 

Sept. 20, 2010: Skyhook Takes a Shot at Google

This week: The search giant faces a new kind of patent lawsuit — one brought by (imagine!) an actual competitor in an increasingly important space — smartphones

 

Sept. 13, 2010: Costco v. Omega — The Patent Angle

The world's largest chipmaker hopes to use a Supreme Court case about Omega watches to 'correct' the Federal Circuit's rules on international patent exhaustion

 

Aug. 30, 2010: Inside Google's Second Patent Trial

Earlier this month, lawyers from Google and Yahoo dismantled a notorious Spangenberg patent. That leaves Google's perfect troll-fighting record intact.

 

Paul Allen v. The Internet

Former Microsoft executive and billionaire Paul Allen sued several major Internet companies and three large retailers for patent infringement today, asserting that four patents originating at Interval Research, Allen's dot-com era think tank, cover basic web browsing and e-commerce technologies.

The lawsuit [PDF] was filed by Interval Licensing LLC, a patent-holding company owned by Allen, and names eleven companies as defendants: AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo, and YouTube.

Interval Research was founded in 1992. It closed its doors in 2000, but the lawsuit is necessary to monetize the investment that Allen made in the organization, said David Postman, a spokesman for Allen.

The patents cover "a variety of key processes in e-commerce," said Postman. "Interval Research was early—and right—on key pieces of the Internet," said Postman. "It's important now to protect that investment. We believe these companies are using that technology, in both e-commerce and search."

Allen is one of the world's richest people, with a fortune that Forbes magazine estimates as over $13 billion.

A Wired magazine profile of Interval Research suggests that by 1999, the institute was struggling, with Allen having spent upwards of $100 million on research and not much to show for it. "Interval always had a special buzz and a collection of talent that, even in the annals of technological genius, stands out."

The four patents-in-suit were filed between 1996 and 2000.

They are:

• No. 6,263,507, "Browser for Use in Navigating a Body of Information, With Particular Application to Browsing Information Represented By Audiovisual Data."
• No. 6,034,652, "Attention Manager for Occupying the Peripheral Attention of a Person in the Vicinity of a Display Device."
• No. 6,788,314, "Attention Manager for Occupying the Peripheral Attention of a Person in the Vicinity of a Display Device."
• No. 6,757,682, "Alerting Users to Items of Current Interest."

The suit was filed in the Western District of Washington. Interval Licensing is represented by Susman Godfrey, a Texas-based law firm that focuses on contingency-fee patent lawsuits, and Heim, Payne & Chorush is a smaller patent firm based in Houston.

More documents:

• Interval Licensing press release on the lawsuit
• Interval Licensing v. AOL et al. complaint [PDF]
• Coverage from Wall Street Journal

Cross-posted at Corporate Counsel.

 

 

Patent Litigation Weekly: International Trade Commission rebuffs Big Tech, keeps doors open to NPEs

The International Trade Commission is in charge of enforcing the Tariff Act of 1930, a law passed during the Depression to protect U.S.-based companies from unfair trade practices, including the sale of goods that infringe valid U.S. patents. In recent years, however, the agency's definition of what qualifies as "domestic industry" has expanded to the point that small patent-holding companies with just a handful of employees (Saxon Innovations, St. Clair Intellectual Property Consultants) and even individual inventors have been allowed to proceed with ITC litigation.

Congress helped expand the ranks of who could seek remedies at the ITC in 1988 when it amended the "domestic industry" requirement to include "licensing" as qualification. Patent-holding companies have relied on that change ever since to justify their arguments that the taxpayer-funded ITC should ban imports of certain products on their behalf. Of course, in 1988, the patent litigation landscape was very different, and patent-holding companies—aka "non-practicing entities," or "patent trolls"—in the modern sense simply didn't exist.

Patent Litigation Weekly: Digging Beneath the Surface of Apple v. HTC

This week: Good luck getting any lawyers in Silicon Valley to talk--even on deepest background--about this week's hot patent litigation story. That doesn't mean there isn't plenty of history and context to consider when assessing Apple's risky gambit.

Apple's lawsuit against HTC comes well into the Internet age, after a 10-year run of "troll" lawsuits has transformed the patent litigation landscape to the point that such suits now make up the bulk of many Silicon Valley litigators' practice.

It's fairly unusual in the modern era for a market leader to initiate a patent suit. Which is not to say large operating companies don't sue for patent infringement. They do. But on the relatively rare occasions when they do launch such litigation, it tends to fall into a couple of categories.

Patent Litigation Weekly: PubPat and "Patent Troll" Make Strange Bedfellows

The view that software patents are an impediment to progress—common among technologists—is rare among patent attorneys. But Dan Ravicher is not a typical patent attorney. He founded the Public Patent Foundation (PubPat), a public interest group that, according to its website, "represents the public's interest against undeserved patents and unsound policy." PubPat recently helped the ACLU launch a major challenge to human gene patents. In the past, PubPat has also challenged broadly asserted software patents, which Ravicher believes "hinder — rather than promote — innovation."

Meanwhile, it's not unusual that a patent-enforcement company recently set up in East Texas would file suit there this week against ten Internet-based and software companies. Nor is it unusual that Texas corporate records show the company is owned by an erstwhile big-firm lawyer, in this case David Garrod, formerly of Goodwin Procter.

What is surprising is that at the same time he is trying to wring licensing fees from such big online names as Google, Yahoo, and Amazon, Garrod is also spearheading a major PubPat initiative: filing lawsuits to rid the marketplace of false patent markings.

The company Garrod owns, Bedrock Computer Technologies, LLC, filed a lawsuit on Monday alleging that the defendants infringe U.S. Patent No. 5,893,120. The list of defendants includes seven big Internet companies—Google, Yahoo, MySpace, PayPal, Amazon, Match.com, and AOL—as well as the world's largest futures exchange, CME Group, and two software companies located in the Eastern District of Texas.

Of Patent Trolls and Trademark Champions: A Tale of Two Spangenbergs

Audrey Spangenberg sees her story as a straightforward David versus Goliath saga: as CEO of a small, struggling software business, she resents search giant Google selling ads that are triggered by users typing her company's trademarked name, Firepond, into the Google search box.

"I was sitting around this one day, and I thought, I'm going to Google 'Firepond' and see what comes up," said Spangenberg. "I was blown away to see that one of the competitors was using my trademark as an ad word."

After consulting a team of lawyers, she filed a lawsuit against Google on Monday that she hopes will become the first class action trademark claim against the company's practice of selling ads on trademarked keywords, a practice she hopes to stop.

Spangenberg says her suit isn't about money, it's about respect for intellectual property. "I'm very troubled at Google's continued disregard for the trademarks of others," she says. "Unless we're a huge company like Google, our property isn't valuable?" That’s how Spangenberg framed the issue in an interview with IP Law & Business on Friday—and the way she framed it yesterday, when she told The New York Times that Google's policies made her "furious."

But that version misses the byzantine backstory to this suit: Spangenberg and her husband Erich already sit atop a sizable fortune, won through intellectual property litigation. Since 2004, the Spangenbergs have moved patents purchased from various sources—including Firepond—through a complex network of shell companies set up in the small town of Marshall, Texas. In the last five years, these companies have filed dozens of patent lawsuits against hundreds of companies, most of them in Marshall or neighboring towns in the Eastern District of Texas, a venue considered friendly to patent plaintiffs—the same venue for the new class-action trademark suit.

News exec to Google: We've got "Hot News," and we know how to use it.

Last week, a U.S. Senate committee engaged in the sort of navel-gazing about the future of journalism that is usually confined to, well, journalists. And this week, the usual suspects are pontificating about what the hearing meant.

There's a lot that could be said, but my attention was caught first and foremost by a sharp exchange between James Moroney, publisher and CEO of the Dallas Morning News, and Google Vice President Marissa Mayer. Moroney showed himself to be particularly well-informed about a certain legal doctrine, created for The Associated Press and recently reinvigorated in a lawsuit brought by that journalism organization: the "Hot News" doctrine. 

Committee chairman Sen. John Kerry (D-Massachusetts) teed up the exchange between Moroney and Mayer by asking the latter if she thought news organizations were paid enough for readers finding stories through a news aggregator like Google News. Kerry said:

"If you're you're out there doing the footwork and you've got a top level reporter in a bureau somewhere in the world, or you're doing a major investigative story and you put the pieces together... that takes money, it takes time, it takes skill... They're not going to get remunerated, for the level they put into that ... Is there a fairer way to try to spread the cost here?"

FTC talks about "Public Notice" function of patents—not that it exists or anything

The Federal Trade Commission came out to Berkeley this week to talk shop with some patent experts, convening several panels Monday and Tuesday about "The Evolving IP Marketplace." The Prior Art dropped in on a panel discussing the "public notice" function of patents—that is, the idea that published patents put the public on notice as to what we're not allowed to use, sell, or manufacture without a patent-holder's consent.

The most notable part of the discussion was that no one ever really got around to mentioning whether patents provide any kind of meaningful public notice at all. When FTC attorney Bill Adkinson, who moderated the panel, began the discussion on claim construction with a quote from longtime Federal Circuit Judge Giles Rich, who was instrumental in crafting the modern U.S. patent laws, he had to urge some panelists to stifle their cackles:

"Judge Rich said the function of claims is to enable everyone to know, without going through a lawsuit, what infringes the claims and what does not."

Challenges to the Google Book settlement, and a connection to Microsoft

The New York Times noted Friday that some challenges are being raised to the Google Book settlement; my colleagues at The Recorder are more interested in the fact that some of the opposition is funded by Google's rival, Microsoft. One of the New York Law School professors whose research is funded by Microsoft is James Grimmelmann. I've never spoken to him, but his lengthy analysis of the Google Book settlement, published in November, is the most insightful thing I've read about it. After reading the post, it really struck me how important this settlement will be to the future of reading as we know it.

Grimmelmann is also a former Microsoft employee, and wrote a great essay about working for the company back in 1997. The law professor made it clear to the NYT that he doesn't believe he or his colleagues' work has been influenced by Microsoft. He generally supports the settlement but also noted that he had concerns about antitrust and consumer rights, and suggested:

Google's top patent lawyer notes the "disturbing trend" of lawyer-inventors

Michelle Lee, Google's head of patents and patent strategy, wrote a post on a company blog this week calling for a renewed effort at patent reform. In the post, Lee mentions the fact that non-practicing patent holding companies—which represent 90% of patent infringement allegations against her company—are very often controlled by patent lawyers, who sometimes take the next step and claim inventorship themselves. "The temptations and opportunities for abuse have gotten too high," writes Lee.

Consider this: Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.” Most of these cases seem to feature the same small set of contingent fee plaintiff's lawyers asserting patent claims against the same small set of companies. We've also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.

She concludes by opining that chances for patent reform in 2009 look better than they did in the past Congress.

More this week on patent reform: Zusha Elinson writes about Silicon Valley gearing up for the patent reform debate. More coverage of early jockeying for position in the 2009 patent reform debate on Patently-O and 271 Patent Blog. 

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]

Polaris IP, suing Google, argues for wide-ranging discovery

On Friday, I wrote about how lawyers working for Polaris IP (Erich Spangenberg) want to use the discovery process in Polaris IP v. Google to learn more about Google's patent reform efforts. Google asked for a protective order; now Spangenberg's response is available. [PDF via Justia]

What's the relevance? Polaris lawyers want to know "Google’s views and efforts relative to the Accused Instrumentalities being able to use the patented technology of others without providing damages adequate to compensate for the infringement." The "Accused Instrumentalities" are the Google products Spangenberg believes he should be paid a royalty on: Google Search, AdWords, and AdSense.

If I hadn't recently watched a patent trial (almost) in its entirety, I think I'd have a hard time understanding what Polaris might be after. But now I can imagine the deposition clips that a skilled lawyer could get from this: "Do you really expect this jury to believe that Google respects patent rights? Isn't it true that Google doesn't want to pay when it uses other people's intellectual property? Didn't Google spend millions lobbying Congress to get the penalties for using other people's intellectual property reduced?" ... and so on.

Zilka & Kotab, a.k.a. Aloft Media, file patent lawsuit against Google's Chrome browser; the latest of many.

I'm back from Texas, where I was able to watch a patent trial (almost) in its entirety, which was a very educational experience. That case, Mass Engineered Design v. Ergotron, will be part of an upcoming feature story in the January print edition, and I'll share some of my thoughts and observations about what I saw and witnessed in Marshall here on The Prior Art.

Now it's time to return to a subject I visited in the October issue, when I focused on IP lawyers who have acquired their own patents, and then used them to sue companies, and sometimes entire industries, for patent infringement. The topic is far from exhausted.

Today I'll focus on two San Jose patent lawyers who have sued at least 20 companies in the past several months: Dominic Kotab and Kevin Zilka, the principals of Zilka-Kotab P.C., and at least three patent-holding companies—Aloft Media, LLC; Stragent, LLC; and Azure Networks, LLC.

Bitten by patent-fish? Try "Catch and Release."

Several large tech companies have teamed up to try to defend themselves against patent lawsuits in a venture called Allied Security Trust, first announced to the Wall Street Journal.

Seven of AST's 11 members have been publicly identified and were confirmed by CEO Brian Hinman (at right) when I spoke to him yesterday; they are Sun Microsystems, Hewlett-Packard, Cisco Systems, Google, Ericsson, Motorola, and Verizon.

The basics: membership costs a bit less than $500,000, and each member has to put up $5 million for patent purchases. The strategy is what Hinman calls a "catch-and-release" model: AST will buy the patents, give nonexclusive licenses to members that want one, and return it to the marketplace. That will recoup some of the members' costs; it will also, of course, keep the litigation environment a few degrees hotter for non-members.

Hinman is quick to point out that the fund is just one part of patent defense strategy, not a panacea. "We are not obtaining all the patents in the universe that are problematic," says Hinman. But AST will negotiate—quietly, through brokers—to buy some of the really problematic ones. "Litigation costs and settlements continue to be on an upward trend," he notes, and a little dent in costs could go a long way.

Are there enough fuzzy-boundary technology patents out there to keep defendants jumping regardless? We'll all find out in due time; meanwhile, a burgeoning class of IP middlemen has cropped up to help clients navigate the economy's ever-costlier patent landscape.

On its website, AST describes its mission as "freedom of operation and cost reduction." No profits for the trust, and no lawsuits against anyone—a promise that Nathan Myhrvold at Intellectual Ventures hasn't quite been willing to make, to the consternation of many.

AST goes public just a few months after PatentFreedom, another patent consultancy with a defense-side business plan, made its debut. Both companies rise against the backdrop of a stalled patent reform bill in Congress and an explosion in patent assertions.

Interestingly, both Hinman and PatentFreedom CEO Dan McCurdy have long work histories at IBM.  McCurdy spent about 12 years at Big Blue in various capacities, leaving in 1996; Hinman worked at the company for 15 years, and left his position as VP of Intellectual Property and Licensing just a few months ago to start up AST.

I'll have more on AST in the August issue of IPLB.

The spicy quote in AST coverage so far is from Acacia Research CEO Paul Ryan, who tells Bloomberg News that the formation of Allied Security Trust "is an acknowledgement" that its members are infringers. "Otherwise they wouldn't have any exposure," he says.

Just the sort of saber-rattling that can be good for the shield business, I imagine.

Google and the patent pile-on of 2007

The official count of patent lawsuits barely ticked upwards in 2007; but interviews I've done recently make it clear that the number of defendants has jumped significantly as plaintiffs rushed to beat patent reform, many by filing suit in East Texas late last year. (More on that when our patent litigation survey is published next week in IPLB's July issue.) Not long before it went down, the now-defunct Troll Tracker blog counted up numbers from the biggest districts to estimate a big increase in patent defendants.

Today at the FCBA Bench & Bar Conference, Michelle Lee, patent chief at Google Inc., threw out some numbers that make the trend clear. When she started at Google four years ago, the company was contending with just one patent lawsuit, she said.

Since then: 

Year two—two patent lawsuits.
Year three—two (additional) patent lawsuits.
Year four—last year—17 new patent lawsuits.

Twelve of the 17 suits were filed in the Eastern District of Texas.

“What we’re facing is an increasing number of patent lawsuits brought by entities with no other business other than monetization of patent assets,” said Lee, adding that those patents are often “of dubious quality.”

“There’s a huge cost to us in defending these cases. The discovery burdens are disproportionately on the defendant.” Defendant companies tend to want to compromise, especially companies that don’t have Google-like resources, she said.

“These patent asserters are often very sophisticated," Lee continued. "They know exactly how much it costs you to defend this litigation… for a modest case, it’s $4-5 million. So they come in with a settlement offer at five, or maybe even four."

With Lee on the panel were Celera founder Michael Hunkapiller, Segway inventor Dean Kamen, and Katharine Ku, Stanford University's director of licensing.

That's all from Monterey.