RealNetworks Sues Burst, Seeking Judgment Saying It Doesn't Infringe

from the pre-empting-a-marshall-texas-lawsuit dept

We've covered the history of Burst.com and its questionable patents before. While the company was recently able to squeeze $10 million out of Apple, following the $60 million it got from Microsoft, speculation had begun on who the next target would be. In fact, apparently a Burst investor had started posting videos to YouTube trying to show how a variety of companies all infringed on Burst's patents. Of course, if we had a sane patent system, most people would look at this to suggest that the concepts in Burst's patents were fairly obvious and never should have received patent protection in the first place -- but that's not how things work these days. Among the companies listed in the videos were Google, AOL, Adobe and RealNetworks. Apparently, that was enough to worry RealNetworks, who has filed for a declaratory judgment in Northern California claiming that it does not infringe on Burst's patents. This was, by the way, the same strategy that Apple took (suing first) almost exactly two years ago. With so much fear of cases getting forced into Marshall, Texas, it's no surprise that those threatened would try to file for declaratory judgments on friendlier grounds. It will be interesting to see if Google, AOL or Adobe follow suit.

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Apple Settles Burst Patent Suit for 'Only' $10 Million

from the legalized-extortion dept

Burst.com is a company that developed some streaming video technology in the 1990s but couldn't find enough people who were interested in buying it. After trying and failing to turn a profit as a legitimate software company, they discovered the joys of patent lawsuits. They wrested $60 million out of Microsoft and then turned their legal guns on Apple. Now Apple, too, has buckled, agreeing to pay Burst $10 million for a license to its patents. The thing that the media coverage of the patent seems not to convey is how spectacularly unoriginal Burst's patent claims are. As this great post explained way back in 2002, Burst's secret sauce is that there is no secret sauce. Burst's patent describes "faster than real time" streaming. There's simply nothing novel or innovative about this; it's perfectly obvious that if you've got a fat enough pipe, you can download video faster than you play it, buffering the difference. Buffering isn't a new "technology," it's a common-sense programming technique that has been used for decades. In a sensible patent system, Burst would have been laughed out of the patent office for claiming they invented such an obvious concept. But in the upside-down world of the USPTO, filing patents on incredibly obvious concepts can net you tens of millions of dollars.

It's not hard to understand why Apple would settle this despite the obviousness of Burst's patents. Research in Motion learned the hard way last year that it doesn't pay to challenge bad patents in court. Even the patent office itself admitted the patents were invalid, but RIM was still forced to pay a $612 million settlement. Comparatively speaking, Apple's $10 million settlement looks like a bargain. But it's important to remember that $10 million is still a huge amount of money for a handful of patents. And every time a bogus patent nets a company a multi-million dollar payout, it's going to prompt other companies to file hundreds more dubious patents, in the hopes of either reaping a windfall themselves or warding off the attacks of a future patent troll. And that, in turn, pushes up the salaries of patent lawyers, diverting thousands of bright and competent people away from more productive profession into a life of filing for and litigating bogus patents.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Apple Tries To Point Out How Little Burst's Patents Matter

from the interesting-strategies dept

You may recall the story of Burst.com, a startup that had come up with some video streaming technology that they later claimed Microsoft copied. While many people still feel that Burst's patents are of questionable validity, there did appear to be evidence of questionable activity by Microsoft, so it was hardly surprising that Microsoft eventually settled the case for $60 million. That payoff then turned Burst onto the wonders of suing for patent infringement, and they started approaching plenty of other companies who were doing things with multimedia content. After threatening Apple, Apple went on the offensive and sued to have Burst's patents invalidated (or to, at least have a court say that Apple wasn't infringing). In response, Burst quickly sued Apple right back for patent infringement.

Apple is now asking the court to dismiss the lawsuit (via MacWorld), though the strategy they're using seems a bit odd. They're focused on Burst's claims that its patents are central to the success of the iPod -- an idea that Apple practically guffaws at in the lawyer's statements: "It's not some epiphanous, oh my God, when you put all these things together you have an iPod." What's odd is that courts usually don't care how important the patented technology is to the final product (which is one of the things the new patent reform law tries to change). Apple then goes on to suggest that there's plenty of prior art in the space and to suggest that the concept behind streaming video is an obvious progression, which makes more sense, given the Supreme Court's recent Teleflex decision, lowering the bar for determining what's obvious. The key point, though, is whether or not Apple would have been able to offer similar video products in the absence of Burst's patents. It seems fairly difficult to believe that no one would have figured out a way to do such a thing without Burst's patents.

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