Eolas' Convenient Move To Texas

from the oh-look-at-that... dept

Last week, we noted that Eolas had received a new patent, a continuation on its browser plug-in patent, and appears to be claiming that it applies to most forms of web embeds, and has sued a ton of big name companies. While most were big name websites (Google, Yahoo, eBay, etc) there were a few that were odd, including retailer J.C. Penney and IT services provider Perot Systems (in the process of being bought by Dell). Well, the ever resourceful Joe Mullin points out that, of course, these firms just so happen to be located in Texas, which helps Eolas come up with a reason why its lawsuit should be in Texas. Even more interesting? Eolas -- despite coming out of UC Berkeley, and basically being one guy who's now based in Chicago -- conveniently reincorporated in East Texas. Wonder why? Especially, with judges now transferring at least a few of the many East Texas patent trials to more convenient locations, East Texas lawyers are coming up with all sorts of neat tricks to convince judges to keep the lawsuits right there.

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Judge Bars Sale Of Microsoft Word For Patent Infringement (Though It Won't Stick)

from the nice-work dept

Just last week, plenty of tech publications were up in arms over the news that Microsoft had apparently secured a patent on XML word processing documents (patent 7,571,169). Of course, when you live by software patents, expect to die by software patents... as a judge (in East Texas of course) has now issued an injunction against Microsoft, barring the sale of Microsoft Word because it infringes on a patent that involves (you guessed it) XML word processing documents.

The judgment against Microsoft in this case actually isn't new. We wrote about it and the $200 million judgment back in May, noting how insane it was that the company holding the patent, i4i, felt that it deserved $98 for every copy of Microsoft Word ever sold. For what? Its patent, 5,787,449, is about XML editing of a word processed document. How that could be worth $98 per copy of Word is beyond me. Actually, how it's patentable at all is beyond me... but that's another story.

Of course, there's about 0% probability that this will actually stop the sales of Word, but it's ridiculous for Judge Leonard Davis to issue this injunction in the first place. As he well knows, the Supreme Court ruled in the MercExchange case that injunctions often don't make sense in patent infringement cases. In that case, the Supreme Court says that a judge should weigh a variety of factors in determining if an injunction is reasonable. From the actual injunction, there's no evidence at all that the judge weighed anything at all. However, he gave Microsoft 60 days to comply, which is ample time for Microsoft to appeal the injunction, and in such cases it's quite common for the appeals court to stay the injunction.

But, honestly, the whole thing shows (yet again) how screwed up the patent system has become. The fact that a judge would ban all sales of Microsoft Word because it can edit an XML document? And that's on top of a $200 million award for infringing on this patent? How can anyone think that's a sane outcome?

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For East Texas Patent Lawyers: Maybe Next Time Don't Sue Random Open Source Developers

from the just-a-thought dept

Back in June, we noted a curious addition to a rather typical patent troll-type lawsuit filed in East Texas. Along with a bunch of big name companies (Google, Yahoo, AOL, Amazon, etc.) were two "unknown" or at least little known companies that happened to be based in East Texas. The reasoning seemed pretty obvious. Courts have been given a bit more leeway in transferring patent lawsuits lately, after years of attempts by patent hoarders to have them all in East Texas (notoriously friendly to patent holders). So, what better way to insist that East Texas is a good place for the lawsuit than to include some East Texas companies (any ones will do!)? Except, it appears that the lawyers for the patent holder (McKool Smith -- a favorite among the patent hoarders) didn't do much research on at least one of those "companies," named CitiWare. Slashdot alerts us to the fact that CitiWare was basically just a small open source project from one guy, who hoped to turn it into a business, but couldn't find any customers and shut it down. That guy has now turned the CitiWare.com website into an angry open letter to the patent holder and to its lawyers, demanding that they drop the case against him. Next time, perhaps those busy lawyers in East Texas will actually take the time to figure out if the companies they're suing exist, let alone infringed on whatever bogus patent they're representing.

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TiVo Bought Some Bull In Marshall, Texas (Literally)

from the or-was-it-the-jury-that-bought-it? dept

For years we've discussed how patent holders love to file infringement lawsuits in Marshall, Texas. There are a variety of reasons for this, but a big part of it is that the court and the juries there seem extra sympathetic to patent holders. However, when TiVo took Dish Network to court in Marshall, apparently it wanted a little extra something to help push it over the edge. So it bought some bull. Literally.

Two weeks before the jury handed TiVo a $74 million award, the company apparently "paid the record-breaking sum of $10,000" for a "Grand Champion Steer" right in Marshall, Texas. Oh, and they renamed it TiVo. TiVo's lawyers insist it had absolutely nothing to do with winning the case, but, still... why buy the bull? Apparently Samsung -- no stranger to patent litigation -- is also getting involved in "civic" causes in Marshall. There's a local celebratory event called "Stagecoach Days" in Marshall that has recently been (wait for it...) renamed as Samsung Stagecoach Days. Of course, apparently one jury consultant warns that this kind of thing can backfire:

"Buying a cow like that I think is bullshit. I think it's insulting -- the idea that people are so simple that something like that will influence the case."

Well, somebody bought the bull...

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If You're An East Texas Company, Are You Now More Prone To Patent Infringement Lawsuits?

from the watch-out dept

Joe Mullin has an interesting story, questioning why PubPat -- a group that has fought against bad/questionable patents and bad patent policy -- appears to be working closely with a guy who fits the classic definition of a "patent troll" and who just sued Google, Yahoo, MySpace, PayPal, Amazon, Match.com, and AOL over a patent (5,893,120) for storing and retrieving data using a hashing technique.

However, what I actually thought was a lot more interesting is buried a bit down in the article. Beyond suing those seven big name internet companies, the lawsuit also included "the world's largest futures exchange, CME Group, and two software companies located in the Eastern District of Texas." Which two software companies? Softlayer Technologies and CitiWare Open Source Technologies -- both of which look like web hosting/data center type places with some additional services/software included. Heard of 'em? Probably not. Mullin speculates reasonably that the two companies may have been added as a strategy to fight off any attempt to change the venue outside of East Texas.

As you may have noticed, with courts getting a bit more leeway in moving such cases, a few have been moved out of East Texas -- especially when none of the parties involved are really based there. So, now, the patent holders who so love filing there are coming up with new strategies, including suing a whole bunch of different companies so they can argue that Texas is "centrally located" or equally as (in)convenient for everyone. Yet, you have to imagine that with a couple of companies located in East Texas, they'll be able to make an even stronger case against moving the case. So, if you're a tech company that's actually based anywhere in East Texas, you may now have a really big target on your back in patent lawsuits, effectively acting as an anchor to keep the case located there.

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Why East Texas Judges Just Gave Patent Holders Incentives To Sue More Companies...

from the interpretations-on-transferring-cases... dept

Earlier this year, we noted that the judges in East Texas were actually transferring some patent lawsuits out of the court, following a ruling from a year ago at the appeals court level (CAFC) telling the district courts to move cases to where they were more "convenient." For a few months, however, various patent attorneys have been saying to keep watching, and that the folks in East Texas, who know they have a good thing going, will come up with ways to keep more cases in their favorite courthouse. And... that appears to be happening. In a few recent rulings in Marshall, Texas, Judge Ward has denied attempts to move the cases to more convenient locations, sometimes challenging the question of whether or not they really were more convenient -- but the reasoning doesn't pass the sniff test.

In a case brought by a patent holder named MHL Tek, who is based in Michigan, against something around a dozen auto manufacturers, Judge Ward denied the transfer, saying that with so many different parties, it made no sense to claim that Michigan (the requested transfer site) was somehow more convenient:

"With regard to defendants, four defendants reside in Germany, three in California, two in Japan, two in South Korea, two in New Jersey, one each in Michigan, Tennessee, Alabama, Georgia, South Carolina, Indiana, and Virginia. The Court finds that this district would, in the least, be just as convenient or inconvenient to most of the defendants as the desired transferee District."

So... the plaintiff and at least one of the defendants is based in Michigan (and many of the others have offices there). None of the the parties are based in Texas. But because some of the defendants are based elsewhere, now it's suddenly ok to keep it in East Texas?

What's the likely end result? Any patent holder who wants to make sure a case remains in East Texas should make sure to sue many more companies who are distributed around the country (or the world), just to give judges in East Texas an excuse to keep the case there. That hardly seems to be living up to the spirit of what CAFC intended with its ruling...

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Some Patent Lawsuits Getting Moved Out Of East Texas

from the about-time dept

We've covered how and why many patent infringement lawsuits are filed in East Texas, but in March of last year, courts were given more leeway in transferring those cases out of East Texas to somewhere more convenient. Of course, that hasn't stopped the massive filings in East Texas, sometimes in absurd situations, such as the one where some Silicon Valley lawyers whose offices are on the same street just a few blocks away from software giant Adobe filed a patent infringement lawsuit against the company in East Texas.

However, it does look like the Federal Circuit is at least somewhat paying attention to this issue, and recently transferred a patent infringement lawsuit out of Marshall, Texas, to Ohio, after noting that Ohio was "far more convenient." Hopefully, we'll start to see more actions like this when it's abundantly clear that the only reason the lawsuit was filed in East Texas was due to jurisdiction shopping for the most favorable venue.

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Wi-LAN Sues RIM: Two Canadian Firms Duke Out Patent Fight... In East Texas, Of Course

from the ah,-east-texas dept

Turns out that Canadian patent holders love East Texas just as much as American companies. The news today covers how Canadian wireless patent holder Wi-LAN has now sued RIM in East Texas, concerning patents on mobile handheld devices. RIM is also a Canadian company (and also heavily involved in patent disputes). Isn't it great to see two Canadian firms choosing East Texas as the best place to fight over patents?

Wi-LAN is a company that we've discussed in the past. It worked on some technologies for wireless networks, but was unable to successfully market products commercially. In other words, it failed in the market. So, instead, it started focusing on aggressively enforcing its patent portfolio, suing a ton of companies who did anything wirelessly. As with so many public companies that turn into patent hoarders these days, it also has a very vocal and active set of day traders who will defend it to no end (see the comments on that link above).

RIM, of course, is also a well known company that we've written about many times. The maker of the super popular Blackberry wireless device, it became an aggressive filer of patent infringement lawsuits. That, in turn, led some patent holders from a non-practicing entity called NTP to sue RIM over some other patents -- eventually leading to a $612.5 million payout by RIM (despite the fact that NTP's patents were found to be invalid).

This latest case seems like it ties together so many different stories. You've got a failed business trying to use its patents to hold back the company that won; it's got Wi-LAN who has been aggressively trying to tax just about every wireless innovation with its patents; it's got RIM, who has been on both sides of a ton of questionable patent lawsuits; and it all takes place in East Texas. Who could ask for anything more?

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Rocket Docket Of East Texas Not Fast Enough For Lawsuit Against The Troll Tracker?

from the funny-how-that-works dept

Joe Mullin has all the latest details on the ongoing defamation lawsuit filed by some East Texas lawyers against Rick Frenkel (better known as the Patent Troll Tracker) and his employer Cisco. We covered the original lawsuit earlier this year, but things are getting more complicated. There are some arguments going on over the appropriate venue as well as some questions about legal fees. It seems that one of the lawyers has dropped the case against Frenkel directly to focus just on Cisco, and Frenkel would like his legal fees paid. The suing lawyer disagrees, suggesting that it was a gentlemanly move to drop Frenkel from the case in the first place.

However, perhaps the most amusing part of all of this is that the guy is trying his darndest to keep the lawsuit out of the East Texas district using the argument that the district is too slow because it's all filled up with pending lawsuits -- such as all the patent lawsuits being filed in the so-called "rocket docket." Just recently, a patent attorney who hangs out in the comments here insisted that (despite statistics showing that East Texas sided with patent holders at a much higher rate than in other districts) the real reason patent holders filed there was because of the speed with which it took care of cases. Funny how one of the patent attorneys who promotes that view is suddenly worried about just how slow those courts are.

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Nintendo Loses Patent Suit In East Texas, Of Course

from the prior-art,-anyone? dept

The latest in a long line of patent lawsuits in every patent hoarders favorite district of East Texas involves the game controllers used by Nintendo. A company holds a patent on a 3D controller and sued Nintendo (and Microsoft) for supposedly violating the patent. Not surprisingly, the jury found in favor of the patent holder. Juries quite often side with the patent holder, no matter how questionable the patent may be. In this case, there would seem to be a ton of prior art raising validity questions. The patent itself was filed in November of 2000, at which point there were already numerous game controllers that seem to meet most of the criteria outlined in the claims. Whatever minor differences there may have been between what was on the market and what's in the claims should be seen as an obvious iteration of game controllers. As for Microsoft's involvement, it paid up to settle last month, once again showing how it's often cheaper to just pay up rather than to fight questionable patents. And, that, of course, is why we will keep seeing more and more questionable patents being filed. It's just so lucrative.

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Do Patent Lawyers Really Want To Put Limits On The Rocket Docket Of East Texas?

from the not-sure-I-believe-that.. dept

There's not much upon which I agree with the American Intellectual Property Law Association (AIPLA). So, consider me a little surprised (and somewhat suspicious) that the group has filed an amicus brief suggesting that the East Texas docket is handling too many patent cases and hasn't transferred cases that clearly should be transferred. This is a similar issue to a ruling we recently noted at the appeals court level pushing for easier transfer of cases to more convenient locations. While it's nice to see the AIPLA come out and basically admit that patent holders have been forum shopping and abusing the court system to get favorable rulings, the cynic in me says that they're doing this as a way to tell Congress that patent reform isn't needed (since forum shopping is one aspect of patent reform under consideration).

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Courts May Now Have More Leeway In Moving Patent Lawsuits Away From East Texas

from the slowly,-but-surely dept

Slowly, but surely, the courts are fixing many (though, not nearly all) of the most egregious problems with the patent system. The Supreme Court has been a big part of this with a series of decisions in the last few years that are pushing to re-establish at least some of the patent system's original purpose from what it has turned into. The Court of Appeals for the Federal Circuit (CAFC), which is the appeals court that handles patent suit appeals (and is often considered one of the reasons why the patent system has gone so astray) appears to finally be getting the message. Earlier this year, we noted that CAFC was finally going to re-evaluate the patentability of software and business models. And, now, it looks like CAFC is looking to alleviate all the jurisdiction shopping that happens in the lower courts, leading to so many patent lawsuits being filed in Marshall, Texas.

What's slightly ironic, of course, is that one of the main reasons CAFC was created in the first place was to put an end to jurisdiction shopping in the past. What used to happen, prior to CAFC, was that patent attorneys knew which districts and which appeals courts tended to favor patent holders, and would rush to file in those districts. In forming CAFC, the idea was that all appeals would go to a central court. What they didn't expect was that CAFC would become dominated by former patent attorneys who were always in favor of more patents -- and that the jurisdiction shopping would just shift down to the district court level.

However, last week, CAFC came out with a ruling that appears to say that district courts should pay more attention to making sure patent lawsuits are held in districts that are convenient. Right now, in order to file in East Texas, all you need to do is claim that the companies "do business" in the district and to have a local lawyer (of which there are plenty willing to help). So you get absolutely ridiculous situations where two California companies right down the street from one another, find themselves in court in Texas for no reason other than the fact that the Texas district court is known to be both quick and likely to favor patent holders. This latest ruling certainly won't fix things entirely, but it does suggest that CAFC is at least sympathetic to the problem of patent holders picking a favorable jurisdiction, often at odds with the most reasonable location -- and suggesting that perhaps that doesn't make sense any more.

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Sun Notes That Both It And NetApp Are In California... So Why Is The Patent Lawsuit In East Texas?

from the ah,-the-lure-of-east-texas dept

The latest news in the patent dispute between Sun and Network Appliance is that Sun is trying to move the case to California. NetApp filed the lawsuit in east Texas, a favorite location for patent holders, since the judges there are known for fast trials that almost always end with the patent holder coming out on top. Even if companies have no real presence in east Texas, they figure out how to get something resembling a presence there in order to file the lawsuit there. Amusingly, patent reform in the early 80s was designed to stop this type of jurisdiction shopping at the appeals court level, but all it seems to have done was push it down to the district court level. In trying to move the case, Sun points out that both it and NetApp have headquarters approximately 10 miles away from each other in California -- and there seems to be no reason whatsoever to have the case filed in east Texas unless you were jurisdiction shopping. There's been some talk lately suggesting that the folks in east Texas are getting a little annoyed at their reputation for being so friendly for patent holders, so hopefully they'll agree that this case really belongs in California.

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Judge Bans The Term 'Patent Troll' -- And The History Of Patent Sharking...

from the not-in-my-courtroom dept

As I've mentioned in the past, I'm no fan of the phrase "patent trolls," though it sometimes does serve a useful purpose. It does seem unnecessarily biasing -- and without a clear definition many people jump to the use of the phrase when it's really not appropriate. Thus, it should come as little surprise to hear that a judge (in East Texas, of course) has told a defendant he may not refer to the plaintiff suing him as a "patent troll." This actually is quite reasonable for a variety of reasons. Obviously, the term has extremely negative connotations without a clear definition, opening it up to serious misuse. Also, there isn't anything illegal about being a patent troll anyway (yet). It is bad for innovation and it's bad for the patent system -- but the reason such actions are so popular is that, for the most part, they are perfectly (if ridiculously) legal. With that in mind, focusing on name calling clearly isn't the best way to get out of the lawsuit. Still, it is rather amusing that things would reach such a level that this would even merit a judge ruling on the term.

Speaking of what to call folks who buy up dormant patents and then use them to sue actual practitioners, a friend just sent me a fascinating research paper looking at an eerie parallel to patent fights in the 19th century, when so-called "patent sharks" (seriously) bought up a bunch of dormant patents on farm equipment and then went around suing farmers who were unknowingly infringing. Yes, the similarities are striking. In fact, the parallels go even further. Right before this happened, there had been some changes in what the patent office considered patentable (just as business models and software have only recently been considered patentable). Also, other industries outside the farm equipment industry fought back to prevent any real patent reform from being enacted -- just as others outside the tech industry are now fighting against today's patent reform. Based on all of this, the paper recommends that history teaches us the way to get rid of patent trolls is the same way that the government got rid of patent sharks: get rid of the patents they prey on -- meaning (in this case) getting rid of software and business model patents.

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