The Prior Art

Patent Litigation Weekly: Juniper’s Novel Defense Tactic Attracts Unlikely Allies

Peter Shipley is a Bay Area hacker and patent-holder who sues technology companies under the corporate name Enhanced Security Research, LLC. In 2007, ESR sued Juniper Networks in district court in California for patent infringement. Juniper struck back in February with a novel false-marking lawsuit, which The Prior Art reported on in June.

Juniper's argument, readers may recall, is that every time a browser loads Shipley's web page, an “offense” is committed because his mention of two patents he holds, Nos. 6,119,236 and 6,304,975, constitutes false marking. False marking occurs when a product is marked with the number of a patent that doesn't really cover it.

Shipley's attorneys at Townsend and Townsend and Crew and Robins, Kaplan, Miller & Ciresi argue that their client is simply posting his patent numbers as part of an online resume, not as a way of trying to sell or market a product. For that reason, they say, he can’t be accused of false marking.

Juniper’s line of attack against Shipley has now attracted an ally: the Public Patent Foundation, which has asked for permission to file an amicus brief on Juniper’s behalf.

PubPat's bid to jump into the case coincides with its ambitious plans for a false-marking litigation campaign, assisted by David Garrod, public interest lawyer by day and patent enforcer by night. (Garrod owns a patent and has sent East Texas love letters to a large chunk of the Internet, and two smaller companies. Garrod and PubPat founder Dan Ravicher are co-authors on the brief.)

Guess who else wants some of Immersion's patent victory cash? Microsoft.

Earlier this month, I wrote about Internet Services, LLC, or ISLLC—that's the patent-holding company that Immersion Corp. approached about out-sourcing its patent litigation in the adult games and "teledildonics" market but now says Immersion owes it some dough from its $82 million patent infringement verdict against Sony. Update on that: an Oakland federal judge threw out ISLLC's claim on summary judgment on May 16.

While reviewing Immersion's recent SEC filings for another story (coming this week), I noticed that there is a much bigger fish than little ISLLC that wants a piece of the patent-infringement booty Immersion won from Sony—namely, Microsoft, which settled with Immersion for $26 million but signed an agreement that it would get a big piece of any settlement between Immersion and Sony. After all, Microsoft knew what Immersion needed the money for: to pay its very expensive Irell & Manella legal team to keep fighting a patent battle against Sony. And why just settle when you can switch sides?

Between the $82 million verdict, interest, and future agreements, Immersion ultimately collected almost $130 million from Sony, according to Immersion's recent SEC filings. But it avoided calling any of that a "settlement" and has refused to pay Microsoft; last year, Microsoft sued Immersion in Seattle federal court asking for at least $27.5 million; it raised that to $35.6 million after a failed mediation in December.

There wasn't much coverage of this remarkable agreement; the Seattle P-I's Microsoft reporter had a couple good blog posts last year on the lawsuit and the business strategy backdrop of the Microsoft settlement.

But Microsoft lawyers goofed when they filed their June complaint against Immersion, disclosing some confidential terms of the Immersion-Sony agreement: namely, they noted that Sony had an option to get licenses for non-PlayStation games, and disclosed the price: $10 million and a royalty of 25 cents for each game sold.

Microsoft filed a new complaint without the confidential price information, and the original was sealed 10 days later. But Microsoft's PR people had already emailed the original complaint to both Seattle newspapers, as well as CNET and Ars Technica (and it's still available). Immersion filed a counter-claim for breaking the confidentiality agreement in September; Microsoft has moved to throw that out on summary judgment, and a decision is pending.

 

Keker & Van Nest wants to get away from client with cybersex patent rights; won't say why

Keker & Van Nest has an inconvenient client.

After Immersion Corp. won an $82 million judgment against Sony Computer Entertainment America Inc. for infringement of its patent on "haptic" (vibrating) joystick technology, a mysteriously named company—Internet Services, LLC—sued Immersion, hiring Keker & Van Nest attorneys Mark Lemley and Daralyn Durie in an attempt to cut itself a piece of patent victory pie.

Internet Services, LLC (ISLLC) appears to be a patent holding company. (at least, I can't tell what they make.) Although they must do something, because they did pay $1.7 million to Immersion in royalties, according to a declaration filed last week by company president Layne Britton. 

Britton's company had an exclusive license with Immersion to market its vibrating technology for the adult gaming market. And Immersion wanted to outsource its patent lawsuits in the adult game market to ISLLC because "in some cases it might be bad publicity for Immersion to enforce its IP rights against some companies in ISLLC's exclusive field of use," according to Britton. That field of use had something to do with "teledildonics," a term I confess to being unfamiliar with until yesterday.

From Britton's declaration:

While negotiating ISLLC's license with Immersion, I met with Richard Abramson (then Immersion's head in-house lawyer) and Louis Rosenberg (Immersion's founder, Chairman and CEO and President) in Richard Ambramson's office at Immersion on multiple occasions. At one particular meeting, Messrs. Ambramson and Rosenberg discussed a concept called teledildonics. In explaining the concept of a teledildonic device, Mr. Abramson brought up the website www.teledildonics.com on his computer monitor and showed it to me and Mr. Rosenberg. Mr. Rosenberg then took apart a vibrating mouse that Immersion had developed for and sold in the retail market, pulled out its chip and motor, and explained to me that these two items cold (sic) be put into almost any form factor, including a teledildonic device. Messrs. Abramson and Rosenberg said that a teledildonic device would infringe Immersion's IP within ISLLC's exclusive field of use, and that ISLLC, not Immersion, could sue such infringing device makers. They further explained that because it might in some cases be bad publicity for Immersion to enforce its IP rights against some companies in ISLLC's exclusive field of use, Immersion wanted ISLLC to have enforcement rights within that field. And Messrs. Abramson and Rosenberg noted that it might only make sense for ISLLC to try to enforce its rights if the potential damages were high because ISLLC alone would have to bear the cost of such a suit.

Really, you can't make this stuff up. Now Lemley and company want off the case, but won't say why (who wouldn't want to enforce a patent on teledildonics? I don't get it.) But his client won't let him off the hook. In fact, ISLLC hired new attorneys just to argue against Lemley's motion to withdraw. Hey, when you've got the best, why settle for less, right? They're up against an Irell & Manella team led by Morgan Chu, after all.

(Interesting aside: Chu was assisted in the Immersion v. Sony lawsuit by Patent Troll Tracker blogger Rick Frenkel, who was then an associate at Irell & Manella.)

There is a suggestion in one brief that the reason for withdrawal may be related to a conflict with ISLLC "advisor" Greg Piccionelli, a Los Angeles lawyer. <Download PDF brief> Hard to know much more than that, since Judge Claudia Wilken has been all too obliging in allowing KVN lawyers to file all the documents relating to their withdrawal motion under seal. (Immersion successfully moved the case from state to federal court.)

Yesterday, Lemley was in Judge Wilken's courtroom in Oakland, making his case to withdraw. There have been three mediations, Lemley said; his client walked out on the last negotiation. Now KVN would even "be willing to waive our considerable fees until today to expedite the transfer."

Any takers?

Update: The patents are actually on "user interfaces," so they cover more than just joysticks. See U.S. Patent No. 5,889,672, entitled "Tactiley responsive user interface device and method therefor," and the even sexier U.S. Patent No. 6,275,213, "Tactile Feedback Man-Machine Interface Device."

Update #2: Keker & Van Nest's request to withdraw was denied without prejudice on May 2; ISLLC's claims were tossed out on summary judgment on May 16.

Update #3: In the original post I identified the president of ISLLC as Leslie Layne Britton. According to court documents, it's just Layne Britton.

eBay v. lawyers with patents

Google will be headed back to the Western District of Wisconsin to fight off a patent lawsuit it thought it had beat, thanks to yesterday’s appeals court decision in HyperPhrase Technologies v. Google. (Bloomberg News story here; court order is here)

That case is connected, by both venue and attorney, to the Netcraft Corp. v. eBay lawsuit that a Wisconsin federal judge tossed out last week on summary judgment. I wrote about that case in Monday’s Daily Journal, and it’s worth following up on here.

Like the MercExchange case that has dogged eBay for more than six years, the Netcraft litigation involves a patent-wielding lawyer-inventor.

Netcraft Corp. v. eBay Inc., 07-00254 (W.D. Wisconsin)

Andrew Egendorf is a Massachusetts lawyer-inventor who began laying a broad claim to the world of electronic commerce in the mid-90’s. (find a short bio with photo here). In May, he sued eBay for infringing on his patents on “Internet billing methods.”

Netcraft is the patent-holding company set up to assert Egendorf’s patents; in addition to the eBay litigation, he filed a Delaware lawsuit against five cell phone companies in October. Netcraft Corp. v. AT&T, 07-cv-00651 (Delaware). Netcraft’s parent company is called Tradecraft; another entity called Datacraft has popped up in some patent searches).

Netcraft's lawyer is Fish & Richardson partner Frank Scherkenbach—who also represents Google against HyperPhrase, a locally grown Wisconsin patent-holding company. eBay hired an Irell & Manella team led by Morgan Chu, who tells me that Irell started working with eBay in 2006.

Even though he lost this one, Egendorf can’t be too disappointed. After all, it looks like he cashed in a few weeks before he even filed the suit against eBay. He’s one of five named inventors on a “friend finding” social networking patent, number 6,618,593, which was sold for $2.86 million at the April 2007 OceanTomo auction.

Egendorf is a lawyer with deep connections to rise of the Internet. He helped found Symbolics in 1980 with some heavy-hitters out of MIT’s Artificial Intelligence Laboratory, and became the company’s general counsel in 1983.

Symbolics was the first dot-com ever, and the company soon had a famously uncomprising opponent: free software advocate Richard Stallman. Stallman has nothing but disdain for software patents like those Egendorf builds and litigates; he also took a mighty dim view of the folks who founded at Symbolics.

“They would get outside investment, not have scruples, and do everything possible to win,” Stallman said in a lecture transcribed here. Stallman had a bitter falling out with Symbolics, describing its founding as a “stabbing in the back,” but also said the company inspired him to created GNU, his free operating system.

In 1968, Egendorf and a friend wrote to Ralph Nader, describing themselves as "disgusted Harvard graduate students who must endure endless years of drivel in order to mechanically defend the guilty and profitably screw the consumer,” according to this article in the San Diego Union-Tribune. He urged Nader to enlist him in a “judicial jihad” and became one of the original “Nader’s Raiders.” Egendorf is interviewed in the Nader documentary "An Unreasonable Man," which I have not seen.

And file this under interesting timing: the "Andrew Egendorf" entry in Wikipedia was flagged for deletion on May 3, 2007—the same day Egendorf filed his lawsuit against eBay. If I were of a more conspiratorial mindset, I might think that suspicious. But it looks like the Wikipedians who voted to kill the page were mainly annoyed that it was written by his old buddy and former Symbolics president Russell Noftsker. The articlde-deletion debate is nothing special, and can be read here.

Short histories of Noftsker, Egendorf and venture capitalist Jean de Valpine, are on Noftsker's Wikipedia user page. The note on Egendorf mentions that his wife Linda is a well-known sculptor.

She's a would-be inventor, too. Linda Egendorf has her own patent application in the works--it's for a "method of creating a soft sculpture."