Patent and technology firm, Intellectual Ventures (IV), recently brought a new complaint against computer security company, Symantec, claiming that the company infringed on three of its patents. To be specific, the complaint alleges that three of Symantec’s products (Replicator, Veritas Volume Replicator, and ApplicationHA) “actively, knowingly and intentionally” infringed on three separate IV patents. Symantec was also sued as part of a different complaint by IV back in 2010, along with Trend Micro, McAfee, and Point Software Technologies.
The First Round
In 2010, former Microsoft exec. and IV founder, Nathan Myhrvold, brought three separate lawsuits against the three above-mentioned companies and six others, claiming that they would not sign licensing agreements, yet they continued to use IV’s patents. Apparently IV had held out on filing the lawsuits against the companies for as long as possible, and according to the company attorney, several attempts were made to negotiate with the companies; however, the negotiations were either unsuccessful or the companies refused to talk about the situation altogether.
On Friday, March 22, 2013, Administrative Law Judge David P. Shaw of the United States International Trade Commission issued a remand determination relating to the investigation instituted by the Commission to investigate patent infringement allegations leveled against Microsoft’s Xbox . Judge Shaw determined that the Xbox does not infringe the remaining patent involved in the ITC investigation, which is a complete reversal of his earlier determination that the Xbox did infringe (see below).
Shaw’s remand determination was brief:
It is held that a violation of section 337 of the Tariff Act, as amended, has not occurred in the importation into the United States, the sale for importation, or the sale within the United States after importation, or the sale within the United States after importation, of certain gaming and entertainment consoles, related software, or components thereof that are alleged to infringe asserted claims 1 and 12 of U.S. Patent No. 6,069,896.
The full Commission now has until July 23, 2013, to consider Judge Shaw’s remand ID.
The month of February was busy. As I write this I’m on a Southwest Airlines flight back from the AUTM annual meeting in San Antonio, where I spoke yesterday on the Bayh-Dole panel. Look for more on that later today or over the weekend. John White and I have been earnestly going through the first-to-file rules and examination guidelines updating the PLI Patent Bar Review Course, and I spoke at the 7th Annual Patent Law Institute in NY earlier in the month. As busy as February was, March will be even busier, but busy is good.
As far as interesting deals and industry news goes, this month easily one of the biggest, and perhaps strangest news items relates to a trademark infringement action brought by Tiffany Co. against Costco. The lawsuit relates to allegations that Costco was selling counterfeit Tiffany Diamonds in at least one of its stores. That has to be filed under the “what where they thinking” category. Good for Tiffany defending its trademarks. Also good for Costco stepping up to the plate to cease this activity right away, but Tiffany does deserve a public apology (as they ask for in the complaint) and for customers to be notified they purchased fake Tiffany Diamonds. Kudos to Tiffany for turning this potentially harmful event into a real PR positive; a real textbook case on how to defend trademarks and generate all kinds of good, positive, free press.
Now, what follows, are some of the other lawsuits, licensing deals and settlements that piqued our interest during the month but wouldn’t necessarily support an independent article. Still, these items are worth knowing about if you want to keep your finger on the pulse of the industry.
Microsoft Corporation finds itself on the defensive side of a lawsuit that could make them pay for infringing two patents on reflexive advertising in search engines. The lawsuit is being brought forth by I/P Engine, Inc., a wholly owned subsidiary of mobile technology innovator Vringo, Inc.
The patent infringement lawsuit, filed in the Southern District Court of New York State, seeks reasonable royalties from Microsoft for not only infringing on I/P Engine’s patents in Microsoft’s own search engine, which employs filtering technology, but also for continuing to engage in the practice for years after alerted to the patents. I/P Engine alleges that Microsoft has been knowingly infringing upon U.S. Patent No. 6,314,420 (the ‘420 patent), which is titled “Collaborative/Adaptive Search Engine,” since at least October 2003 and U.S. Patent No. 6,775,664 (the ‘664 patent), which is titled “Information Filter System and Method for Integrated Content-Based and Collaborative/Adaptive Feedback Queries,” since at least December 2008.
Without doubt, the biggest patent deal of the month related to Kodak’s sale of its non-core patent portfolio to Intellectual Ventures, RPX and others for $525 million, which was just enough to qualify Kodak for bankruptcy financing that had been previously secured if and only if that portolio sold for in excess of $500 million. We covered that issue as it happened on December 19, 2012. See Kodak Sells Patents to IV, RPX.
There were a number of other interesting patent business deals during December that also caught our eye, including: (1) Microsoft and EINS Sign Android Patent Agreement; (2) NIH Awards Contract for Improved Anthrax Vaccine; (3) ARRIS To Acquire Motorola Home Business For $2.35 Billion; (4) Mylan Announces Comtan® Settlement Agreement; (5) Trovagene Licenses Duke University, Novartis; (6) Amgen Finalizes Agreement Resolving Federal Investigations; (7) GE Healthcare, CDI Agree to Sublicense for Cellular Assay Patents; and more. Below is summary of these and other patent deals from the month of December 2012.
Justice Sonia Sotomayor delivered the opinion of the U.S. Supreme Court in i4i v. Microsoft.
This month I have been running a series of articles on the United States Supreme Court, which is now back in session as they open ever October with a new term. So far we have looked at Supreme Court Copyright Fair Use Cases and Supreme Court Trademark Cases. Today we switch things up a little and talk patents, focusing on one of the most important decisions the Supreme Court has made over the last generation — i4i v. Microsoft.
Some would argue that i4i v. Microsoft was not such an important case, and I suppose that is one way to look at this. The Supreme Court got the decision correct, so it just managed to keep the status quo in place. But if the Supreme Court had chipped away at the presumption of validity of a patent the way the Microsoft and many amici asked the patent system would be far worse off today. In fact, patents would almost not be worth the effort if they could so easily be challenged.
With this in mind I recently chatted with Michael Cannata, who is a Partner with NW Patent Funding Corporation. Through a joint venture with NW Patent Funding Corporation, Michael is an advisor and manager to the Northwater Intellectual Property Fund, which was established in 2005 as one of the 1st funds involved in patent litigation financing.
It was less than two weeks ago that AOL announced that it completed a $1.056 billion patent transaction with Microsoft Corporation (NASDAQ: MSFT). At the time of the announcement of the Microsoft transaction AOL explained that the company expected to provide additional details to shareholders by the end of June. Earlier today, AOL Inc. (NYSE: AOL) announced that it has commenced a modified Dutch auction tender offer to repurchase shares of its common stock up to an aggregate purchase price of $400 million, making good on its earlier promise to shareholders. Indeed, this announcement is being touted by the company as a first step in returning 100% of the proceeds of its recent patent transaction to its shareholders by the end of calendar 2012.
The Microsoft patent transaction included the sale of over 800 AOL patents and their related patent applications, and granted Microsoft a non-exclusive license to its retained patent portfolio for an amount totaling $1.056 billion in cash. AOL continues to hold a significant patent portfolio of over 300 patents and patent applications spanning core and strategic technologies, including advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security among others.
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