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Microsoft Co-Founder Paul Allen Sues Apple, Google, Facebook, Yahoo and Others for Patent Infringement


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: August 29, 2010 @ 9:17 pm
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Paul Allen

On Friday, August 27, 2010, Interval Research Corporation brought a patent infringement lawsuit against a who’s who of tech companies in the United States District Court for the Western District of Washington at Seattle, specifically suing AOL, Inc., Apple, Inc., eBay, Inc., Facebook, Inc., Google Inc., Netflix, Inc., Office Depot, Inc., OfficeMax Inc., Staples, Inc., Yahoo! Inc. and YouTube, LLC. Conspicuously missing from the target list was Microsoft Corporation, the company that Paul Allen, which is the co-founder of Interval Research, co-founded with Bill Gates. Many in the technology sector are wondering what Paul Allen is doing and why he is bringing this lawsuit, which to me seems rather naive. As discussed more fully below, it seems to me that Mr. Allen is attempting to enter the deep, dark world of patent trolls. The tell-tale sign being a complaint without any substantive information and naked recitation of a variety of patents that have “one or more” unspecified claims being infringed for unspecified reasons.

The history of Interval Research dates back to 1992 when Paul Allen and David Liddle co-founded the company to perform advanced research and development in the areas of information systems, communications, and computer science.  Allen served as Interval Research’s chairman and was one of the earliest pioneers of personal computer software, co-founding Microsoft with Bill Gates in 1975 and later founding Vulcan Ventures in 1986.  According to the complaint Allen, Liddle and a handful of scientists and inventors evolved Interval Research into a preeminent technology firm, but one that apparently did not have staying power. CNET reports that Interval Research, despite its proclaimed “preeminent technology” status, is no longer in business.  See Paul Allen sues Apple, Google over patents.

The complaint alleges infringement of United States Patent Nos. 6,263,507, 6,034,652, 6,788,314 and 6,757,682. I would love to be able to provide information and detail as to the theory of infringement, but virtually none was provided in the complaint, hence my characterization above suggesting that perhaps Paul Allen has decided to become a patent troll of the first magnitude. This type of complaint by ambush is fairly typical, particularly with patent trolls. Of course, there may be real infringement here and Allen et al may not really be patent trolls, but the complete and utter lack of information in the complaint is troubling, although it has continually become the modus operandi in the patent infringement litigation world.

I go back and forth on my feelings regarding patent trolls and those that they sue. What can be said about patent trolls with certainty is that they have a patent right that is entitled to be enforced. What can be said about those that lose to patent trolls is that they were infringing those rights and were, as a result, nothing more than a tortfeasor. But who is the good guy and who is the bad guy? The truth really lies in between with both parties typically being shades of gray. Patent trolls have rights, but principles of equity and fairness demand that claims of infringement be made with more specificity than “here is my patent number and you are infringing one or more claims.” Complaints are supposed to be informing and such a nebulous statement without any statement of fact or even statement of belief hardly satisfies the defendants’ rights to know what they are being charged with. On the other hand, it is hard to get worked up about this injustice because in so many of these cases where the big-tech companies complain about patent trolls they wind up losing, which means they were infringing. So no one ever has clean hands; nor are they wearing white hats.

But is Allen really a patent troll? Who knows for sure, time will tell I suppose, but color me cynical about Interval Research’s decision to sue all major tech players other than Microsoft, the company that Allen co-founded with Gates.

But the complaint must have at least some information about a theory, right? Well, I suppose you could say there is at least the vaguest of vague statements that could point in a direction. For example, the first Cause of Action relates to infringement of US Patent No. 6,263,507. Paragraph 20 explains that the invention is titled “Browser for Use in Navigating a Body of Information, With Particular Application to Browsing Information Represented By Audiovisual Data.” Paragraph 20 goes on to explain that Interval Research is the assignee of the patent and holds all rights to the patent. Then paragraph 21 states:

21. Defendant AOL has infringed and continues to infringe one or more claims of the ’507 patent. AOL is liable for infringing the ’507 patent under 35 U.S.C. § 271 by making and using websites, hardware, and software to categorize, compare, and display segments of a body of information as claimed in the patent.

Paragraphs 22 (re: Apple), 23 (re: eBay), 24 (re: Google), 25 (re: Netflix), 26 (re: Office Depot), 27 (re: OfficeMax), 28 (re: Staples), 29 (re: Yahoo) and 30 (re: YouTube) are all identical, except for the insertion of the relevant company name in place of “AOL.” Paragraph 31 then goes on to state:

31. Defendants AOL, Apple, eBay, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo, and YouTube’s acts of infringement have caused damage to Interval, and Interval is entitled to recover from Defendants the damages sustained by Interval as a result of Defendants’ wrongful acts in an amount subject to proof at trial. Defendants’ infringement of Interval’s exclusive rights under the ‘507 patent will continue to damage Interval, causing irreparable harm for which there is no adequate remedy at law, unless enjoined by this Court. Interval reserves the right to allege, after discovery, that Defendants’ infringement is willful and deliberate, entitling Interval to increased damages under 35 U.S.C. § 284 and to attorney’s fees and costs incurred in prosecuting this action under 35 U.S.C. § 285.

So the theory of liability relative to the ’507 patent is seemingly built upon the title of the patent and the conclusory assertion that “by making and using websites, hardware, and software to categorize, compare, and display segments of a body of information” the patent is infringed.  The other causes of action relating to the other three patents all follow this same nebulous non-informing pattern.

Thank goodness that proving patent infringement is not so simple as saying “may patent relates to X and you appear to be doing X.” If it were that simple many hundreds of patent litigators would be out of work. Of course it is not that easy, and filing a lawsuit with such little information ought not to be allowed either. If I were one of the defendants I would file a motion to dismiss for failure to state a claim because how in the world is this complaint supposed to put the defendants on any kind of notice?

In a direct about-face, allow me to also say this: who can blame the attorneys for Allen’s Interval Research for filing a complaint like this? If you can initiate a lawsuit without any information to actually inform the defendants as to what they are doing that might be infringing then you might as well. If the Courts will allow you to file a complaint that says I think you are infringing but I’m not about to tell you how or why I think that; go figure it out yourself, then you might as well. So unless and until District Courts start tossing these cases and the United States Court of Appeals starts strictly following the requirements of the Federal Rules of Civil Procedure these types of complaints by ambush will only continue, and who can blame the plaintiffs? There is an enormous strategic advantage to keeping the defendants guessing and in the dark for as long as possible.

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Posted in: Apple, Companies We Follow, Facebook, Gene Quinn, Google, IP News, IPWatchdog.com Articles, Microsoft, Patent Litigation, Patent Trolls, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

33 comments
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  1. Rule 11 ought to sweep away most, if not all, of this complaint. It is junk. A law student would fail a clinic if they produced a complaint like this one. Hopefully the defending attorneys are paying attention and ratchet up the difficulty for Allen et al, maybe by many of them collectively filing a DJ, when he is re-writing his complaint after summary dismissal, in the Eastern District of Va. That would be fun to watch!

  2. A patent concludes with one or more claims that particularly point out and distinctly claim the subject matter which the applicant regards as his/her invention.

    Given that the patent numbers are listed in the complaint, isn’t that enough information for the defendents to determine if they are infringing with a reasonable amount of effort and legal expense?

  3. John,

    I’m not so sure even a complaint this “bare” would be swept away, on its face, by FRCP 11. The “notice pleading” flavor underlying the FRCP certainly allows this sort of “bare” complaint. But what Interval certainly won’t get with this “bare” complaint is a preliminary injunction.

    I wouldn’t be surprised if this “bare” complaint is based on a strategy by Interval to share as little as possible now about what their “theory” of infringement is and to let Apple et al. “ferret out” through discovery what that “theory” is. The Apple et al. will certainly get the opportunity during discovery to have Interval “clarify” what is believed to be infringed and by which claims. Just my thoughts for what they’re worth.

  4. The “patent prosecution model of complaint drafting” – make your complaint as broad and general as possible, then narrow it down by amendment until you get something the courts will allow?

  5. Should have a few more of these, it helps to show the growth of the patent system problem. It is patents against patents. I find that very telling, telling that the patent system over the past twenty years has tied itself into knots granting patents with such potential.

    Knots ? Patent claims against patent claims is more like it, and now litigation that will show while the patents of one existed, others were able to patent “around it” because of a loose fit patent system. Hence, knots.

    Soon, the SCOTUS will love the case that makes its way before it, because it will be once again that some went too far – with reckless claims designed with a lack of responsibility that the SCOTUS handed to them with Bilski by NOT taking away software patents. The next time, I can see software patents in the trash.

  6. Mark-

    This type of complaint drafting really is not enough to let the defendants know anything. Yes, the patents do have claims, but which ones does the defendant think are infringed and why? There is no discussion other than extremely vague as to what products or services are viewed as even potentially infringing. This smacks of “we have a patent and you are doing something we think it too close, exactly what is for us to know and you to figure out for yourself.”

    Michael-

    I agree with you. It seems that patent complaints are following the model of patent prosecution. While this type of activity is allowed in patent prosecution it is specifically not allowed in litigation. Unless and until the courts actually put their foot down this type of complaint will continue to be quite popular.

    -Gene

  7. “Yes, the patents do have claims, but which ones does the defendant think are infringed and why? ”

    Isn’t it the defendant’s obligation to make sure that they don’t infringe any of them?

  8. As someone familiar with the IP workings of all companies involved, it seems to me that this complaint relies upon an inference of violations obvious to Interval and the defendants but not using the rigorous language demanded of the litigation. Honestly, I have no doubt that the defendants are fully aware of the violations and the suggestion that they are willful may alarm them toward rapid settlement. Though I am quite sure that Allen is in no hurry.

    I’m surprised that Allen has not sold a license for these patents to Microsoft, who clearly infringe if the others do, and think this may be his rabbit in the hat since a license to Microsoft will strengthen the notion that the complaint is valid.

    If I were defending I would challenge these patents either on priority and/or on obviousness but it probably is not in the interest of the defendants to do so. It will establish a difficult precedence for them. However, in the name of good causes, perhaps Google will recognize this as an opportunity to establish this precedent.

  9. and now litigation that will show while the patents of one existed, others were able to patent “around it” because of a loose fit patent system. Hence, knots.

    New Here – this is not a new aspect of patents – either inthe present case or more generally historically.

    You are again lost in the woods because you insist on larks without a map.

  10. Is it possible that there were prior communications between Interval Research Corporation (IRC) and the defendants such as cease and desist letters/e-mails? And such correspondences provided more detail as to the alleged infringements but were not made part of the initial complaint for emotional and/or strategic reasons? Emotional in that IRC was just peeved in a — “See you in court” sort of way. Strategic in that IRC had possibly received various theories of non-infringement from the individual defendants as well different theories from within each or several of the defendant companies.

  11. “Isn’t it the defendant’s obligation to make sure that they don’t infringe any of them?”

    The plaintiff carries the burden of proof. This is equivalent to a filing a suit for trespass with nothing more than your address in the complaint.

  12. Isn’t it the defendant’s obligation to make sure that they don’t infringe any of them?

    Yes, but it’s also the plaintiff’s responsibility to plead and prove infringement.

  13. “What can be said about those that lose to patent trolls is that they were infringing those rights and were, as a result, nothing more than a tortfeasor.”
    In a legal sense, someone who is found guilty of patent infringement and sued on those grounds is a tortfeasor, but that just means that they stepped outside of the law (or were at least interpreted as stepping outside the law). If the system of law is not just, then I don’t think you can really label a patent infringer a wrongdoer when a reasonable recourse was not available to them. In some cases, they may have had reasonable alternatives available, but there are certainly quite a few cases where the infringers didn’t. As for the patent holders, while they may be well within their legal rights, whether or not bringing a suit is ethical or not is a separate issue.

    Abuse of a system must be addressed or the system falls apart. Government can take actions to solve said abuse, but I would say there is a responsibility among those capable to draw attention to and rebuke those who abuse the system in the meantime if they wish for the system to stand and function. If the patent system can’t stop frivolous cases on bad patents from occurring, then the patent system can’t possibly work to drive progress, and the costs to society will be immense. I’m not sure exactly what options are legally available, but discouraging the filing and prosecution of bad patents needs to occur somehow, and responsible patent attorneys may be the best party to do this discouraging through the tools available to them.

  14. Just because Allen&Co. use a bare-bones complaint doesn’t make them into a patent troll. Gene, I am disappointed in you for just a woosy allegation. By they way, a couple of years ago Scotus ruled in a case called Iqbal or some such that bare bones pleading ain’t enough, so, yes, this complaint may be dismissed. But that does not mean it can’t be re-filed or amended before dismissal to make the added allegations that our brethren above say it lacks.

    My understanding is that as in the case of many alleged “trolls,” these patents started in a company that intended to use them commercially, but has since failed. Does that make the current owner a troll? I think not, particularly if the company failed because today’s defendants refused to deal with the patentee and trampled on its market position resulting in the failure. I don’t know that this happened here, but if it did, would not such “troll” be entitled to more than a perjorative label, regardless of how he drafted his complaint?

  15. My two cents.

    The Federal Circuit holds that Rule 11 requires “at a minimum, that an attorney interpret the asserted patent claims and compare the accused device with those claims before filing a claim alleging infringement.” Q-Pharma, Inc. v. Andrew Jergens Company, 360 F. 3d 1295, 1300-01 (Fed.Cir. 2004) [see http://j.mp/aHuvkg ].

    So … at least claim construction – of “the asserted patent claims” – and an infringement analysis. From someone competent. Which tells us two things: (1) patents are not, of course, infringed though their claims can be and (2) before filing suit plaintiff’s counsel is duty-bound to identify at least one claim that someone competent has concluded is being infringed.

    The problem, however, with trying to create a rule requiring patent owners to allege infringement of specific claims is that Rule 8 only requires a “short and plain statement of the claim showing that the party is entitled to relief.” Twombly and Iqbal have certainly increased the quantum of facts necessary to satisfy that “short and plain statement” standard. The problem in the patent context, though, is that the template patent infringement complaint [Form 16] in the FRCP’s Forms Appendix does NOT require that specific claims be identified [see also http://j.mp/c3gsFR at Form 18]. Attempting to dismiss a complaint for failing to identify the allegedly infringed claims is a non-starter—even though plaintiff’s counsel must know of at least one.

    A party may move under Rule 12(e) for a more definitive statement of the facts and alleged wrongdoing but only to remedy “an unintelligible pleading.” Numerous courts have concluded that Rule 12(e) cannot be used to force patent owners to identify in their complaints the allegedly infringed claims. The timing of that requirement is left to each court’s local rules – and each fact pattern.

    It makes a lot of sense to me to require plaintiff patent owner’s to identify in their complaints at least the one claim that they have already concluded is being infringed. Perhaps that could be done by simply amending the FRCP’s template patent infringement complaint or maybe by amending 28 USC 1338 [the statute providing district courts exclusive jurisdiction to hear patent infringement cases]. This requirement would focus plaintiff attorneys attention on their Rule 11 duty to investigate the merits of their infringement claim before filing suit.

  16. The post has these two comments —

    “Conspicuously missing from the target list was Microsoft Corporation, the company that Paul Allen, which is the co-founder of Interval Research, co-founded with Bill Gates.”

    “But is Allen really a patent troll? Who knows for sure, time will tell I suppose, but color me cynical about Interval Research’s decision to sue all major tech players other than Microsoft, the company that Allen co-founded with Gates.”

    What is the implication here? I’m not sure why it matters that Microsoft was not sued. A patent owner does not have to sue all infringers. Also, I believe Allen owns a lot of Microsoft stock. Maybe he doesn’t want to hurt his investment? I see nothing wrong with him not suing Microsoft.

  17. @Blind Dogma

    ‘New Here – this is not a new aspect of patents – either inthe present case or more generally historically.’

    Question, why is it the PTO doesn’t know that others are, or aren’t, patenting around or over other’s patents ?
    If this is in fact not a new aspect of patents – either inthe present case or more generally historically …as I gather from your reply to my post ? Read my post again please. Because my post is about patents against patents, that such litigation gets a spark from to start it.

    The reason for this question, is that such litigation is about what patents the other guy does or doesn’t have. If the PTO worked as it should, then I have to believe that such litigation would be baseless on the grounds that patents do not patent each other …not by mistake or otherwise because the PTO works as it should !

    Faulty systems do not produce trusted results ! As for looking for a perfect world, the patent system is a clear example it is not !

    Fact is that all mentioned in this litigation, are patent owners ? They have patents on their businesses, so I find it not hard to believe, that there is some patent over-lap here that is part of the claim(s).

    BD, please carry a flashlight, that way I know where you are too as it seems you have found me ?

  18. Once again, New Here – try typing that in English. Compose your thoughts into rational sentences.

    You do know what sentences are, do you not?

  19. @Blind Dogma
    Not entirely sure what he’s talking about, but I believe he’s saying that there is a lot of overlap in these patents, such as granting multiple patents on the same process. He also seems to be suggesting that some of the companies being sued very well may have patents on what they are being sued about, since there is a tendency for them to patent everything they can.

    As for his reply being a bit unclear, I think that English is not his native tongue, but that doesn’t make his arguments not valid.

  20. @Blind Dogma

    Please tell why it is you spend so much time and space here, on making points having nothing to do with the topic. I read time and again, where you shoot-down people’s points only over because you don’t think they make the “grade” – even when they are using English well, or not.

    I have made it a point not to address you when making comments/replies in the resent past. So I see it, as it shouldn’t be your problem, to continue to ride me here about one thing. So, if I happen to be a person of Foreign origin, do you have anything against such people ?

    Please, make it clear what is rational about your approach here, before you talk about rational to others. As for what you call rational, it seems to me there is nothing about it for one to follow to gain an understanding.

    This is my last comment / reply to you. I don’t come here for this, enough !

  21. New Here and Bobby,

    If you have a point – make it. If you don’t care enough to compose that point thoughtfully and would rather bluster on in incoherent ramblings, don’t get upset when people who read these points (and do so to attempt to understand what other people are thinking) point out that you are not making sense.

    This has very little to do with English as a second language and much more to do with New Here’s self professed view of his ramblings – my points on incoherent ramblings are NOT new here – he has previously admitted that he treats language for his benefit, and he tends to forget that the object of writing is to express your views for other people. And don’t take the “I’m a foreigner” cop-out when it is laziness that I am deriding. I have worked with numerous people whose English skills as a second language are far worse, but who take the time to compose their thoughts. We’ve gone over this before – I want to believe that you have valuable input, but your laziness (and habit of writing for yourself) get in the way.

    As to whether his arguments are valid or not – I have to assume far too much in guessing what he is trying to say to ascribe validity.

  22. I understood NewHere to be saying that patents are infringing patents. If that is what he is saying, he is wrong. You infringe a patent by making, using, selling or importing the invention that is protected by a patent. Just getting another patent on it or improving on it is not infringement.

  23. @American Cowboy

    Yes, I agree, I would be wrong if that is all I was saying. Patents against patents is what I said, and does not mean “infringement”. in the “normal” way. The obvious failure of the patent system is that patents do overlap that patents are granted with the litigation potential as Allen’s.

    The overlap is a result of a poor examination policy lacking the tools for critical cross reference to sets of “like” ideas as described in claims across patent applications in a given area. Prior Art often is small enough to be passed over when is part of a larger claim set that no cross reference is made. Overlap can involve many such small parts as Prior Art from other patents as well. This all has the potential to offer opportunity for litigation and significant damage to “real” innovation.

    The USPTO for one has no grasp of the scope of what has been patented or by whom, much less that as I have called overlap. Few if any methods are available to realize this scope of this implication or its impact on the patent system if such information was in fact found.

    Thanks American Cowboy, I found your reply to offer me something.

  24. Give a man a fish, he will not be hungry for a day. Show a man how to fish…

  25. New Here, I think what you are talking about has been a characteristic of the patent system since the second patent was issued.

    If A got a patent for a plow with an improved handle and B got a patent for a plow with an improved blade and C made a plow with A’s handle and B’s blade, he would infringe both A’s patent and B’s patent, even if C had a patent of his own saying to make the blade of a novel metal alloy. These “overlaps” are unavoidable.

  26. @American Cowboy

    I understand your point, the problem is more subtle then infringement on a case basis. In fact so subtle that the overlap is across multi-patents, patents without relationship to one another as the overlap is not as direct as knowledge of a specific thing, building from / upon it. Allen’s case I believe is a very good example of the broad power patents gain over vast number of business and technologies because of the subtle problem of “overlap”.

    The patent system’s failure to produce examination policy and tools to address the unavoidable that opens opportunity for litigation, is a responsibility the USPTO for one shares with the patent system as a whole. Patents today are not unique, and so, they are not protected by patent Law because the Law has a serious blind spot that doesn’t see the problem (overlap) in front of their face. The true damage potential to innovation will never be realized until light is put upon, that which is set to accomplish nothing more then litigation and poor patent protection as a result.

    Thanks for the reply… I enjoy the feedback.

  27. New here, I need a concrete example of what you are talking about. Can you cite one, with patent numbers and names of involved parties and products?

  28. @American Cowboy

    I believe all the concrete examples of what I’m talking about exists within the broad litigation that patents bring. The patent system if worked as it should, would reduce the number of concrete examples with avoidable patent grants and litigation they bring – rather then having patents / patent-claims found invalid only after long costly litigation in too many cases.

    It is not my responsibility to provide the patent system with that information it should already have. If the patent system has no idea why the litigation grows – not making the connect to patents they grant is a sorry fact of the patent system’s failure. Please ask the PTO to provide a detail of the examination policy as well the tools for making sure that unavoidable – isn’t in fact the very thing I am talking about.

  29. American Cowboy,

    Aren’t you glad you asked?

  30. @American Cowboy

    If I would have taken you up on your request, any answer would have not been soon enough. I have said the problem (overlap) is a subtle one, and I didn’t set out to prove a thing on a damn blog. If I wished to research spending the time for such evidence as the concrete examples you asked for, it would be for more important things that would have the potential to maybe accomplish a solution to the problem the PTO for one has not come close to. And the PTO has had thousands of people to work on it over resent years.

  31. Translation:

    “I just want to bitch about something I feel strongly about and don’t care if I am even right or wrong. Stop making me think about what I say or why I say it.”

  32. Translation:

    “I just want to kvetch* about something I feel strongly about, and I don’t care if I am actually right or wrong. Stop making me think about what I say, how I say it, or if what I say is true or has meaning. I am speaking for me, not anyone else and I am not interested in having an actual discussion.”

    *note – original word choice nabbed by filter.

  33. I suspect that someone like Paul Allen would not have filed this kind of patent infringement suit unless he thought he had a pretty good chance of winning. And, of course, he can afford top-notch legal counsel. My question is, will Mr. Allen’s pledge to give away most of his fortune apply to the (likely pretty hefty) damages if he prevails in this case?
    http://online.wsj.com/article/SB10001424052748703369704575461964181065980.html?mod=googlenews_wsj