A complaint filed by London-based electronics developer ExoTablet Ltd. against American electronics reseller Negri Electronics might simply be a petty response to a failed business venture, or it may be the first alarm in a larger battle against ASUS, a multinational company that manufactures notebooks and other electronic devices.
On January 25, ExoTablet filed the complaint, which seeks a trial by jury, in the Northern District Court of Georgia, Atlanta Division. The complaint alleges that two ASUS products sold by Negri Electronics violate a patent that ExoTablet currently holds for combination laptop/cell phone devices: the PadFone and the PadFone 2. ExoTablet is seeking compensation for infringement, lost profits due to infringement, prejudgment interest and treble damages.
The patent in question is U.S. Patent No. 7,477,919, which is titled “Handheld Input/Output Device Providing Enhanced User Interface for a Mobile Telephone.” The patent protects the design of a tablet device that includes a port for an attachable mobile phone. The tablet device includes a display screen and is capable of Internet access, while the calling functions would exist in the smaller, attachable component. The patent was issued on January 13, 2009, to Peter Warren of Chattanooga, TN.
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Claim 1 of the ‘919 patent protects:
“An input/output device for a mobile telephone providing a handheld, wirelessly portable, enhanced user interface for the mobile telephone having a display screen, comprising: a housing sized and configured to be conveniently carried by hand; an electronic display screen mounted to or enclosed in the housing that is larger than the display screen on the mobile telephone; a user operable input device mounted to or enclosed in the housing for receiving user commands for controlling the mobile telephone while the input/output device is handheld and wirelessly portable; a cradle mounted to or enclosed in the housing configured for physically receiving and holding the mobile telephone; a communication port mounted to or enclosed in the housing for communicating with the mobile telephone when the mobile telephone is held by the cradle; wherein the input/output device is configured to physically hold and transport the mobile telephone while the input/output device is handheld, the input device is used to control the mobile telephone, and the enlarged display screen displays information supplied by the mobile telephone; and wherein the mobile telephone input/output device holding the mobile telephone is configured to be conveniently operated while handheld and used as an integrated wireless communication device in which the mobile telephone engages in wireless communications while the input/output device operates as a handheld, wirelessly portable, enhanced user interface for the mobile telephone.”
Schematic images attached to the patent document bear a great resemblance to the ASUS products. The ASUS PadFone and PadFone 2 are both dual devices that consist of a smartphone that can be docked onto a tablet device to communicate electronically. ASUS touts this product’s ability to switch seamlessly from mobile phone operation to the tablet by connecting the two via the dock. In this way, a user can switch between devices without interrupting a current process, like a game or download.
It seems likely that ExoLimited will eventually file a lawsuit directly against ASUS at some point in the future for infringing the ‘919 patent, or at least that is what Negri Electronics CEO Ryan Negri seems to anticipate. For now, however, Negri Electronics is the only defendant listed in this complaint. But additional lawsuits against other retailers is always a possibility. Still, US electronics retailers who carry either the PadFone or the PadFone 2 may want to be on alert for possible ExoTablet litigation in the coming months.
Negri Electronics does not seem to be too concerned about the complaint, or at least believes that it has a very strong legal case in defense. Ryan Negri said that the company was very surprised by the legal action, and that they consider the case to be “frivolous.” “The technology industry has been rife with patent trolling in recent years,” Negri said, “which we believe is a fair and accurate characterization of this current lawsuit.”
Negri also believes that this lawsuit may be retribution for his company’s prior refusal to sell ExoTablet products. For months prior to the lawsuit, ExoTablet had been in contact with Negri Electronics to arrange an agreement for selling ExoTablet’s TransPhone, its own combination laptop/cell phone device. “We declined to offer the TransPhone to our customers after determining through independent testing that the product was of inferior quality and should not be on the market,” Negri said. “At no time did ExoTablet make any mention of a patent dispute with ASUS, nor did they serve us with a cease-and-desist letter or injunction before filing this lawsuit.”
It’s possible that these legal moves by ExoTablet could pose a mild threat to certain American electronics retailers, as ASUS products are widely carried by many retailers. But ASUS has not been widely criticized of patent infringement in the past, maintains a fairly good reputation in that regard, so what if any longer term troubles there will be for other retailers is hard to predict. This is particularly true when dealing with a possible case of patent trolling.
Time will tell whether this is really a case of patent trolling, an unfortunate lawsuit caused by a failed business relationship or a legitimate case of patent infringement. For now what is clear is Negri’s view. He notes: “[This] lawsuit is baseless and harmful to US consumers.”