Apple Goes On The Offensive: Sues Burst.com Over Burst's Patents

from the take-that dept

You may recall the fairly high profile patent lawsuit between Microsoft and Burst.com that took place a few years ago. It was an interesting case, where Microsoft was accused of infringing on some Burst.com patents for video streaming. What made it more interesting than your usual software patent infringement suit was two things: (1) Microsoft had spent two years "working" with Burst where Burst explained a lot of its technology and (2) Microsoft conveniently "lost" a whole bunch of emails that were probably extremely relevant to the case -- neither of which made Microsoft look particularly innocent. Eventually, Microsoft agreed to settle the case and hand over $60 million. Burst, discovering the wonders of patents, then announced that it would use that money to go after other infringers. Since that time, the company had been relatively quiet, but a month ago Robert Cringely (who wrote a few columns strongly taking Burst's side in the Microsoft case) mentioned rumors of a new Apple video offering which he notes would almost definitely infringe on Burst's patents. Based on that, he wrote: "look for an Apple/Burst announcement." Well, now that announcement has come, though it's probably not what Cringely expected. He indicated one of two possible outcomes: (1) a license agreement between Burst and Apple or (2) Burst suing Apple for infringement. Turns out the answer is behind door number three: Apple proactively suing Burst.com, and asking the judge either say that Apple is not infringing on Burst's patents or to simply say that Burst's patents are invalid. Should be fun to watch this one unfold.


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    MadJo (profile), Jan 6th, 2006 @ 3:47am

    Multiple choice? I'd like to phone a friend....

    Wait, do I get this straight, they practically give the judge a multiple choice question?
    either we aren't infringing or burst.com's patents are invalid? Isn't that a bit of misuse of the court system?
    Actually this whole case is strange. If they fear for patent infringement, why not work out a deal with Burst? And if they think they have nothing to fear, why sue at all? Or is this a new way of getting publicity? "To throw a SCO" :-)

     

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      patentman, Jan 6th, 2006 @ 5:09am

      Re: Multiple choice? I'd like to phone a friend...

      "Wait, do I get this straight, they practically give the judge a multiple choice question?
      either we aren't infringing or burst.com's patents are invalid? Isn't that a bit of misuse of the court system?"

      What Apple is doing here is actually pretty common in patent suits. They filed what is known as a "declaratory judgement action," in which, as indicated by the article, they ask the judge to determine a) whether the patent at is sue is valid; and b) if so, to state affirmatively that Apple does not infringe.

      One major rule in patent law (and its a vfairly obvious one) is that if a patent is invalid it cannot be infringed. Further, if the patent is invalid, there is, obviously, no reason to license it.

      If the patent is determined to be valid by the judge, Apple's request that the judge state that Apple does not infringe basically goes towards the question of licensing. If Apple is found not to infringe at the declaratory judgment stage of the proceedings (note that because of evidenciary limitations at the declaratory judgment stage of proceedings that the Judges determination of infringement is usually not final and the patentee can usually appeal), Apple's licensing position improves. As a result, if Apple does decide to license the patent, it has more clout in requesting a lower rate.

      "If they fear for patent infringement, why not work out a deal with Burst? And if they think they have nothing to fear, why sue at all? Or is this a new way of getting publicity? "To throw a SCO" :-)"

      I'm assuming that you have never sat in on patent licensing negotiation, so I won;t harp on you for your comment. Basically, patent licensing negotiations can be EXTREMELY nasty and difficult. If you think about it, if there is no "clear" infringement, one party is saying "you have to pay me to use this" and the other is saying "I don;t owe you squat because your patent, which I think is crap by the way, doesn't even cover our product!" If there is "clear" infringement, and the parties know it, then this gives the patentee the ability the bully the proposed licensee into paying a very high licensing fee, which, of course, the licensee does not want to do. To say that patent licensing negotiations are generally "heated," would be a massive understatement.

       

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        Svelte, Jan 6th, 2006 @ 5:26am

        Re: Multiple choice? I'd like to phone a friend...

        My first TechDirt post, prompted by having read Brust's website...

        I hope Apple wins this one because it appears that all of Brust's "technologies" are nothing more than how to get data to a workstation more quickly, including caching.

        [sarcasm begins now] ... No one has ever thought to do that before. It's not like you can look up "caching" in a thousand different books or anything.

         

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        MadJo (profile), Jan 6th, 2006 @ 7:29am

        Re: Multiple choice? I'd like to phone a friend...

        "I'm assuming that you have never sat in on patent licensing negotiation, so I won;t harp on you for your comment. Basically, patent licensing negotiations can be EXTREMELY nasty and difficult. If you think about it, if there is no "clear" infringement, one party is saying "you have to pay me to use this" and the other is saying "I don;t owe you squat because your patent, which I think is crap by the way, doesn't even cover our product!" If there is "clear" infringement, and the parties know it, then this gives the patentee the ability the bully the proposed licensee into paying a very high licensing fee, which, of course, the licensee does not want to do. To say that patent licensing negotiations are generally "heated," would be a massive understatement."

        Ok, I must admit, I did not know this.

        but still, most times I hear of Patent lawsuit-cases, it is about the patenter sueing the infringer. In this case it is actually reversed, and that is what boggles my mind. Basically Apple says "We have a suspicion we might infringe him, but we want to exclude that, so we are going to spend a lot of money on lawyers/waste a judge's time to find this out." At least, that is how it comes across on me.
        The only people gaining from this strategy (in my eyes) are the lawyers.

        But then again, I could see it incorrectly, as I don't understand the legal system.

         

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          The Other Mike, Jan 6th, 2006 @ 7:38am

          Re: Multiple choice? I'd like to phone a friend...

          MadJo there is another way to look at this: Pay $2 million to lawyers up front or pay $5 million in licensing fees and still maybe need lawyers like the MS case - not to mention the bad PR from a case like that.

           

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          patentman, Jan 6th, 2006 @ 7:40am

          Re: Multiple choice? I'd like to phone a friend...

          "but still, most times I hear of Patent lawsuit-cases, it is about the patenter sueing the infringer. In this case it is actually reversed, and that is what boggles my mind. Basically Apple says "We have a suspicion we might infringe him, but we want to exclude that, so we are going to spend a lot of money on lawyers/waste a judge's time to find this out."

          You are correct in that the usual way of things is that the patentee sues the alleged infringer. You are incorrect, however, in stating that Apple is going to the judge in this instance, to say "we might infringe him etc..."

          What Apple is doing is saying to the Patentee, "We DON'T infringe you, and before we waste a ton of money, we're going to spend a little money now and get a quick and dirty judicial affirmation on the record that says your patent is invalid, uneneforceable (not the same as invalid), or that we simply don;t infringe. Declaratory judgement actions in patent suits are definitely not a waste of time or money. They are generally pretty fast (as far as patent suits go, and MUCH less expensive then a full blown patent suit, or even licensing negotiations.

           

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          Macadamias, Jan 6th, 2006 @ 8:05am

          Re: Multiple choice? I'd like to phone a friend...

          "In this case it is actually reversed, and that is what boggles my mind. Basically Apple says "We have a suspicion we might infringe him, but we want to exclude that, so we are going to spend a lot of money on lawyers/waste a judge's time to find this out." At least, that is how it comes across on me.
          The only people gaining from this strategy (in my eyes) are the lawyers."

          I think what is happening (and what Patentman may be alluding to) is that the waters in the license negotiation are so murky right now, that Apple is taking it to the court to get an objective ruling that they hope will favor their side. They could then continue negotiations with an advantage and gain more favorable terms.

          In other words, Apple and Burst have been trying to agree on a license for a long time and gotten nowhere. A third party with some authority in their judgement must be brought in to determine whose viewpoint has more validity for any further progress to be made. So in this case, litigation has become necessary, and both Apple and Burst may come to an agreement anytime before a final judgement. It all depends on how strongly either side believes in their interpretation of the case.

           

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      Frank J. Mattia, Jan 6th, 2006 @ 9:29am

      Re: Multiple choice? I'd like to phone a friend...

      because if youre using a technology that you believe is encumbered by illegitimate patents which are owned by a company who will use those against you - then you dont want to strike a deal with that company and you definitely dont want those patents to stay around any longer. if they dont sue it looks as if they're trying to avoid getting caught doing something wrong - if they do, it shows that they're on their toes and trying to force the resolution.
      btw, not to be a grammer nazi - because i overuse ellipsis and tend to not use capitalization - but the "a" before SCO should be an "an". even though SCO starts with a consonant, the acronym still starts with a vowel sound, ESS.
      - late

       

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        patentman, Jan 6th, 2006 @ 9:38am

        Re: Multiple choice? I'd like to phone a friend...

        "because if youre using a technology that you believe is encumbered by illegitimate patents which are owned by a company who will use those against you - then you dont want to strike a deal with that company and you definitely dont want those patents to stay around any longer."

        "Illegitimate" or no, the major goal of a declaratory action in patent suits is to have the judge state, in some shape or form, that the Patent is inapplicable in some way to the declarant (In this case, Apple). Apple will be happy if the judge simply states that their product does not fall within the scope of the claims.

         

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        Another Anonymous Coward, Jan 6th, 2006 @ 11:58am

        Re: Multiple choice? I'd like to phone a friend...

        btw, not to be a grammer nazi - because i overuse ellipsis and tend to not use capitalization - but the "a" before SCO should be an "an". even though SCO starts with a consonant, the acronym still starts with a vowel sound, ESS.

        Not if you pronounce the acronym.

         

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        Mike (profile), Jan 6th, 2006 @ 12:44pm

        Re: Multiple choice? I'd like to phone a friend...

        btw, not to be a grammer nazi - because i overuse ellipsis and tend to not use capitalization - but the "a" before SCO should be an "an". even though SCO starts with a consonant, the acronym still starts with a vowel sound, ESS.

        SCO isn't pronounced ESS-SEE-OH. It's pronounced: Skoh.

         

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    James Katt, Jan 6th, 2006 @ 12:42pm

    Apple HAS patents on video caching

    Apple HAS its OWN patents on video caching. Apple has the right to use its OWN patents.

    Apple will argue that Burst's patents are invalid because Apple has the patents on that technology.

     

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      patentman, Jan 6th, 2006 @ 1:41pm

      Re: Apple HAS patents on video caching

      "Apple HAS its OWN patents on video caching. Apple has the right to use its OWN patents.

      Apple will argue that Burst's patents are invalid because Apple has the patents on that technology."

      Not if Burst's patents encompass the subject matter within Apple's patents in some basic form. Apple may still have to pay a licensing fee to Burst if the patents it owns necessarily employ technology covered by Burst's patents.

       

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