The Prior Art

Patent Litigation Weekly: Shutter Closing on Massive Photo-Sharing Patent Suit

FotoMedia is a patent-holding company that claims just about every photo-sharing website you can imagine infringes its three patents. Its lawsuits, covered by TPA last May and June, are notable not just for the audacity of the claims they make, but also because they target dozens of small- and medium-sized software companies that provide various types of photo-sharing services over the Internet.

In previous stories about the FotoMedia suits, TPA detailed the litigation’s effect on San Francisco-based Fotki.com, which has about 25 employees, and the three-man, Texas-based software company FotoTime.

As the new year starts, some of the FotoMedia defendants are breathing a sigh of relief—and the rest may be doing the same soon. That's because reexamination requests filed with the United States Patent and Trademark Office by Yahoo Inc. appear to have knocked out nearly all the patent claims at issue. FotoMedia's lawyers at McKool Smith have reacted to that development by offering to either stay the suits or have them dismissed without prejudice (leaving FotoMedia able refile the claims at a later date.)

Patent Litigation Weekly — Photo-Sharing Patent Suit Threatens Immigrant's Dream

For a guy who feels his business is being cramped by bogus lawsuits, Igor Shoifot comes across as an irrepressible optimist. The 42-year-old Russian immigrant, who runs the photo-sharing site Fotki.com out of a nondescript office building near San Francisco's Fisherman's Wharf, laughs loudly and often at his predicament.

Still, Shoifot knows he’s in a serious bind. His business is at risk of paying heavy penalties—and possibly being shut down—because it relies on "metadata" technology that enables functions like tagging and commenting. FotoMedia Technologies, a patent-holding company with offices in New Hampshire and North Carolina, claims patents it owns give it exclusive control over certain uses of such features, and has asked a federal judge to shut down Fotki.com and 62 other photo-sharing services unless they pay unspecified licensing fees. TPA first covered these suits two weeks ago in the first installment of The Photo-Sharing Files. 

"My first reaction was that it was a joke," Shoifot says. One reason he felt that way: none of the patents-in-suit—U.S. Patents 6,542,936, 6,018,774 and 6,871,231—were issued until 2000, two years after Fotki.com began operations. "We had this business running in 1998. Not a concept, not an idea, not a 'wouldn't-it-be-cool to do that,' but an actual business in 1998."

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]