More on Harthcock Lawsuit

I guess I was wrong that Hartcock's 91-defendant suit set a record for patent cases in EDTX. The MIT/Electronics for Imaging case against Abacus Software, as originally filed, had 92 defendants. But the first amended complaint in that case listed 214.

Ron Zapata reported in IP Law 360 yesterday that Harthcock sued his prosecution counsel over his patent because he alleged they made his patent "unenforceable" by amending the claims without his consent. According to Zapata's article, Harthcock lost his suits, which named law firms Royston Razor, Kilpatrick Stockton, and the USPTO, for conspiracy to interfere with civil rights and felony theft of trade secrets.

Finally, a reader pointed me to this website, where Harthcock shares his advice on "How to view UFOs on any clear day."

From: "Jerry D. Harthcock"
Subject: How to view UFOs on any clear day
Date: Mon, 10 Jun 1996 18:41:09 -0500

On June 8, after a weather front cleared the sky over Plano Texas, I discovered a way to see UFOs on any clear day. When I say clear, I mean no haze or high altitude clouds in the sky. When using this technique, me and several of my friends saw at least 30 or 40 different UFOs throughout the day.

These craft flew intelligently and purposefully across the sky at extremely high altitude. Sometimes, one would be at a low enough altitude that you could see it with your naked eye, just loitering around basically in one spot for a few seconds and then scoot out of sight at an extremely high rate of speed.

Using a Canon 35 mm with effective 5.6 X 680 telephoto lens, I photographed them fling not only in ones and twos, but also in arrowhead or chevron formations. Using an ordinary pair of 10 X 40 binoculars, I could sometimes lock onto one that seemed relatively close and track it as it descended to just a couple a thousand feet and woop across a couple two or three miles in just a second or two then rotate up and disappear.

These craft were round and I suspect that I was looking at their bellies because when they passed overhead, I could clearly see the craft's propulsion array luminesce in green and red colors. The propulsion array appeared to be arranged round the inner perimeter of its base. There appeared to be six to eight elements
in the array.

How to observe these craft:

1. It must be a perfectly clear day with no haze and no high altitude clouds.

2. You need at least a 10 X 35 or better binoculars. If you want to photograph these craft, use a camcorder with at least a 8X analog zoom lens (not digital image zoom). For 35 mm, use at least 1000 speed film and effective 600 or better telephoto lens. I used a 5.6 X 400 zoom with X 1.7 extender/adapter to get to an effective 680.

3. Next, stand under the awning of a building or erect structure such that the building blocks the inner part of the sun and only the corona of the sun can be seen. What we are trying to do here is form an artificial eclipse of the sun using the building or structure. Point your binoculars or camera at the white of the corona being careful not to let the center part of the sun come into view. Within a few seconds, you should see multiples of high altitude craft come into view. Some will zip across the sky out of view while others will seem to hover momentarily before zipping out of view. Some will be flying in staggered formation while others might descend into lower altitudes. These you will be able to track only if they are several miles away because they are simply traveling too fast to track, much less be seen, in close.

My conclusion is that there are intelligent life forms that live in the upper altitudes. You will be shocked to see that their visible numbers are in the hundreds. Perhaps they live off ozone.

Remember, it has to be an extremely clear day. Be extremely careful not to look directly into the sun. They are up there; I promise you.

Jerry

**********

UFO-loving individual inventor asserts unenforceable patent in one litigation against 91 companies. Now that's much more interesting than reading about the latest claim construction ruling, isn't it?

Patent Infringement Overload

On Tuesday, November 27th, there were 126 companies sued nationwide for patent infringement. 113 of them were sued in the Eastern District of Texas. That's more companies sued in one day in East Texas than have been sued in all of 2007 so far in Detroit. Or Dallas. Or Eastern Virginia. Or Minnesota. Or Boston. Or Philadelphia.

Actually, 91 of the defendants were sued by an individual inventor, Jerry D. Harthcock. He lives and works in the Western District of Texas. He sued the allegedly infringing manufacturer. And he sued every single one of the manufacturer's customers. And he sued every single one of the manufacturer's customers' retailers. In fact, I think that every single one of you reading this blog is probably infringing Harthcock's patent right now. Stop that. No really, stop, or Harthcock will sue you, too. I said stop using those microprocessors already!!!!

Correct me if I'm wrong, but this would seem to be the patent case with the largest number of defendants ever filed in the Eastern District of Texas. Wonder how many law firms will make appearances. And why isn't there anywhere in Vegas we can go to bet on the over/under on such things?

Guest Commentary on Why Patent Reform Needed

Reader Paul Morgan of Rochester, NY sent me this and gave me permission to reprint. These are only his views, purely personal observations by a retired patent attorney for a major US corporation IP law department.

Patents cranked out by the millions [with tens of millions of claims] by the USPTO necessarily include a large percentage of clearly invalid or over-broadly-claimed patents, because almost all patents are allowed by a single, young, limited-experience, patent examiner after an average of only 17.9 total patent application examiner processing hours, with only a very limited search of the huge present body of prior art. Thus, many patents simply do not deserve a several million dollar hurdle to even challenge their validity or valid claim scope. Yet this is clearly the case in pro-plaintiff courts like East Texas where judges apparently refuse to transfer patent suits to far more appropriate forums, and do not provide any opportunity for summary judgments of invalidity before the defendants must incur millions of dollars in costs for discovery, trial preparations and jury trials.* This multi-million dollar barrier to even challenge patent validity or infringement (and then only to a jury that is unlikely to understand the technology) provides huge troll shakedown-settlement opportunities by contingent fee tort lawyers which are rapidly being increasingly exploited. [Plus, there is still the additional threat of a fatal injunction requiring a CAFC appeal after an unfavorable jury verdict.]

Patent litigation is unique in that the litigation costs for the defendants are vastly higher than for the patent owner plaintiffs, who need merely allege infringement, the only issue for which they have any burden of proof. In contrast, defendants have a CAFC-imposed burden of "clear and convincing evidence" on almost all other issues.

Very few of these E.D. TX defendants had any prior knowledge of these troll-acquired patents before their products being sued on had been independently developed and heavily commercialized for the publics benefit. Thus, no prior opportunity to "design around" the patents or challenge them. Most of these troll-acquired patents are "paper" patents that were never commercialized by any of their patent-owners.

*Nor will these judges apparently allow stays of litigation for the time required for USPTO reexaminations.

Thanks, Paul.

Disclaimer

Haven't done this in a while, but just a reminder, that in case it is ever revealed that I actually have an employer, all of the opinions expressed by me on this website are my own, and only my own (and not my employer's, if any).

And let me reemphasize that when I report "X sued Y" or "the USPTO database shows that X transferred the patent to Y on such-and-such date," or "there were over 100 defendants sued in Marshall today," those are facts. As I stated from the beginning, everything else in this blog is an opinion, whether stated as such or not.

Constellations on the Move: Gemini Moves From Madison, Wisconsin to Marshall, Texas, and then Sues 11

Erich Spangenberg, a/k/a Plutus IP, LLC, has had it with the Western District of Wisconsin, apparently. He filed suit there against HP and others back in April. But the defendants moved to transfer the case due to inconvenient venue, and Judge Shabaz granted the motion, kicking it to Northern California. The last of the defendants in that case settled in early November, setting off a string of corporate hocus-pocus by Spangenberg.

First, he set up a new corporation in Texas on November 12, called Gemini IP, LLC (the Wisconsin lawsuit was by Gemini IP Technologies, LLC). In essence, he pulled up the moving van to Monona, Wisconsin, and moved the company 1,000 miles south, to Marshall, Texas, according to PTO assignment records and the complaint itself. That's the same address as IP Navigation and all of the other Plutus subsidiaries.

Second, he transferred the patent from Gemini Technologies of Wisconsin to Gemini IP of Texas on November 16.

Third, he sued 11 more defendants, this time in the Eastern District of Texas (on the same patent as in the earlier suit, U.S. Patent 6,177,932). But, interestingly, he chose Sherman as his venue. That gets him Judge Schell. The defendants are Citrix, Mitel Networks, Inter-Tel, Avocent, LANDesk, Saba Software, Genesys Conferencing (2), Premiere Global Services, Netspoke and iMeet. For many of these small companies, it's their first patent case. Welcome to patent troll city. Gemini being represented by a different crew than in the Wisconsin case - this one's being handled by a small Dallas firm, The LaValle Law Firm, along with local counsel Clyde Moody Siebman of Sherman.

One reader emailed me and joked that the entire contents of the Gemini offices in Wisconsin could probably fit into the trunk of a Mini Cooper. Ha. Probably could fit in a FedEx envelope.

So anyway, I think this is significant news. WDWI was supposed to be the new trendy rocket docket, but the problem is that the judges there actually do pay attention to venue and 28 USC 1404. Time will tell what the next greatest rocket docket will be. Hawaii, anyone? Please? I promise, the islanders are generous. Until then, look at least for this troll to sue in East Texas.

Here's a summary as to the cases Spangenberg has filed, all since 2004. In roughly the last 3 years, Spangenberg has filed 43 patent lawsuits against 488 defendants. 39 of those lawsuits have been filed in the Eastern District of Texas, and 4 in the Western District of Wisconsin. This does not include the case where he was D/J'd in South Georgia. Spangenberg has done this by carving up the 15 patents he owns (at least - there are probably more unasserted ones) into 10 different shell companies. Follow me yet? Maybe this will help:

1) Orion IP: 2 patents (acquired from Firepond), 16 lawsuits, 221 defendants.
2) Constellation IP: 1 patent (acquired from Firepond), 3 lawsuits, 64 defendants.
3) Triton IP: 1 patent (acquired from Firepond), 4 lawsuits, 17 defendants.
4) Phoenix IP: 3 patents (2 acquired from Firepond, 1 acquired from Itron), 6 lawsuits, 26 defendants.
5) Polaris IP: 2 patents (acquired from Firepond), 4 lawsuits, 29 defendants
6) Taurus IP: 1 patent (acquired from Firepond), 3 lawsuits, 13 defendants
7) Gemini IP: 1 patent (acquired from Kana Software), 2 lawsuits, 20 defendants
8) Cushion Technologies: 2 patents (acquired from Nike), 2 lawsuits, 72 defendants
9) ST Sales Tech Holdings: 1 patent (acquired from Symeron Software), 2 lawsuits, 13 defendants
10) PA Advisors: 1 patent (acquired from Mightiest Logicon Unisearch, a shell of inventor Ilya Geller), 1 lawsuit, 13 defendants.

TOTAL: 15 patents (acquired from 5 different sources), 43 lawsuits, 488 defendants.

By the way, some defendants have been sued by him more than once. For example, Ford was sued by Orion, Taurus, and ST Sales Tech.

My probably conservative estimate is that at least $400M has been spent on attorneys fees alone in the last few years by defendants sued for patent infringement by this non-practicing entity.

Champerty as to Altitude Capital

Mark Walters has a blog focusing on patent law in Washington State. Yesterday he expanded on my post on Altitude Capital, querying whether the laws of champerty might bar a finance company like Altitude Capital from prosecuting some of these new trendy troll cases through their shells like Saxon Innovations and Software Rights Archive. Find his interesting post here. I had never heard of champerty as a defense in a patent case, so thanks, Mark.

Altitude Capital Partners, Hiding Behind Multiple Shell Corporations, Sues Google, Yahoo, AOL, and Others

I'm back, and decided to lead with Altitude Capital Partners because, frankly, I'm irked they are filing lawsuits without revealing that they are behind them. There's a lot of information in this post, so pardon if it's somewhat rambling.

In October, Altitude Capital Partners, masquerading as Saxon Innovations, LLC, sued 15 companies in the Eastern District of Texas, including Nokia, LG, Research in Motion, Palm, and Nintendo. See here and here. The rumor at the time was that Altitude Capital wasn't done - indeed, they are out there, trolling for patents to assert against, well, everybody.

I think they have already struck again. This time the lawsuit is Software Rights Archive, LLC v. Google Inc. et al. (the other defendants are Yahoo, IAC Search & Media, AOL, and Lycos). The case was filed in Marshall, Texas by the Houston law firm Smyser Kaplan & Veselka, with assistance from the Austin law firm DiNovo Price Ellwanger. Local assistance by Brown McCarroll and Parker Bunt & Ainsworth. Software Rights Archive revealed they are a Delaware corporation, but did not give a principal place of business. That's because they do no business, other than at the whim of their parent. Of course, they filed the required Corporate Disclosure Statement, but that only revealed that their parent is the Delaware shell corporation SRA, LLC, which was incorporated on May 14, 2007.

The asserted patents are 5,544,352, 5,832,494 and 6,233,571. The accused products are "search engines, systems and services covered by the claims of the patents." The '571 patent is a divisional of the '494 patent, which is a continuation-in-part of the '352 patent. The '571 and '494 patents get at least a May 1996 priority date, if not the June 1993 priority date of the '352.

I looked at the assignment records for these patents. They were all assigned to a company owned and controlled by one of the inventors, Daniel Egger, who listed a Durham, North Carolina mailing address. The company's name was Software Rights Archive, Inc. (formerly called Site/Technologies/Inc.). However, Mr. Egger didn't actually execute the assignment from himself personally to Software Rights Archive, Inc. until May 18, 2007. On that very same day, Inc. transferred the patents to Software Rights Archive, LLC, listing an address of 485 Madison Avenue, New York City. The verdict? Altitude Capital Partners (it's their address). The PTO database shows this was nothing more than a name change, which is curious. Of course, LLC is a subsidiary of SRA, LLC, set up 4 days earlier in Delaware.

Interestingly, even though "Inc." was set up by Egger in 2004, it didn't file its first annual report until May 18, 2007 (it listed itself as a consultant).

Three things that have piqued my interest. First, what is Altitude Capital Partner's m.o. here? Are they trying to be an Acacia, and suing everyone repeatedly, without notice? Or are they after something else? And if so, what is it? Anyone with any intelligence on what ACP is up to here, feel free to email me. Or, post a comment!
:-)

Second, venue anyone? This is at most, a NY mega-patent troll perhaps with ties to NC suing CA and NY defendants in Marshall, Texas. ACP is apparently following in the footsteps of Erich Spangenberg and many others and sue exclusively in EDTX. Evidently, they are not dissuaded by the parade of horribles others have been preaching about how EDTX is no longer a good place to file a patent case.

Finally, the FRCP 7.1 Corporate Disclosure Statement is not operating as intended. What if a judge had a financial interest in Altitude Capital? They only disclosed that they were owned by "SRA, LLC." Using multiple shells to hide the true parent seems to defeat the purpose of the local and/or federal rules required to disclose corporate ownership. Nobody seems to mind when it's a mega-troll trying to hide, but what if, oh, Microsoft were to acquire some patents and hide them in a shell corporation, Linuxsux, LLC. And then they set up a parent of Linuxsux, which is LSX, LLC. Microsoft may own LSX, but in its FRCP 7.1 disclosure statement, it would only need to reveal that plaintiff Linuxsux is owned by LSX, a Delaware company with its principal place of business in Marshall, Texas. I bet there would be somewhat of an uproar if Microsoft started suing Red Hat, Novell, and other Linux users without revealing it was them. Not to mention it would defeat the purpose of allowing the judiciary to be able to examine true ownership for purposes of deciding whether to recuse.

It's extremely unfair that the courts and Congress have been letting these patent troll shell factories hide the ball, and the rules and/or laws should change to require full disclosure of ownership, completely up the chain. Either the courts should start interpreting Rule 7.1 to require disclosure of all corporate parents, or Congress should add a provision in the patent reform package to require it. (Or the Supreme Court could fix Rule 7.1 to require it, I guess - they are the group that does that, right?). Google should make a motion for a complete disclosure to test the Rule!

But until the rule/interpretation changes, I'll continue to try to unmask who is behind these lawsuits. Now if anyone knows anything about this technology, would love to know whether these patents are serious. The 1993 date is definitely early, but the means-plus-function limitations don't wow me.

Interesting Blog - Patent Demand

North Carolina/RTP IP lawyer Tim Wilson has an interesting blog called Patent Demand, where he muses on a variety of prosecution-related topics. He has a post here where he speculates that raising the patent application fee by a significant amount might dry up the market for patent trolls in the High Tech industry. Not sure how that's going to stem the problem with all of the patents that have flooded the market now, but is an interesting thought, for the future.

Happy Thanksgiving

A patent troll tracker needs a rest every once in a while, so I am thankful for the week off. However, I couldn't resist taking a peek. My, some big patent trolls were also busy patent trolls this past week! Well, I'm not going to blog it all today, but here is a sneak peak of some of what is coming up next week:

Ode to Spangenberg: "I can move 1,000 miles and I can sue 1,000 more"
Altitude Capital Partners gets high off of suing Google, Yahoo, AOL, and more
An industry has trolls in the attic, looks to SuperLawyer for help.

Plus, I have a bunch of other suggestions some of you have emailed me. Not sure I'll get to it all. Well, I'll get to Spangenberg (a/k/a Plutus a/k/a Gemini) and "Software Rights Archive, LLC" (a/k/a Altitude Capital Partners) early in the week, because those two are interesting. After that, we'll see.

Happy Thanksgiving!

Friday Patent Litigation News

It has been a busy Friday. But there's tons of Patent Troll News out there to be discussed. But I bring bunches of stories: Acacia losing to Microsoft, then getting right back on the bike and suing Google (see below). A jury verdict of infringement that nobody is talking about, and a biotroll. Something for everybody. This is likely my last post until after Thanksgiving.

First, I'd like to lead with a word about jury verdicts in EDTX. Everyone is talking about Acacia, and how EDTX is dead as a jurisdiction. I call bullshit. The fact is that it was a crappy patent, and crappy patents do die sometimes. The shame is that there are so few summary judgments of noninfringement.

Second, why is nobody talking about the other trial that was going on in Marshall? You know, the one between Power-One and Artesyn Technologies? Evidently, the jury found both of Power-One's patents valid and found one of them infringed. See here for Power-One's PR. You can view the verdict form here. According to the trial minutes, Power-One has moved for a permanent injunction. The judge has asked for briefing. Here is Artesyn's spin on the loss. Damages or no damages, a patent is the right to exclude, and it looks like Artesyn is going to be excluded from something. Hope Michael Smith picks this up and adds it to his database.

Third, who says that there are no big verdicts in EDTX? I have seen that trumpted by the Patent Bill Opposition Coalition lately. But remember z4 v. Microsoft? Today the Federal Circuit affirmed the $115M verdict that z4 got from Microsoft in that Judge Davis case in Tyler (Microsoft was represented by Fish & Richardson in that case, not Weil Gotshal).

Now, turning to reader email, there has been a ton.

Reader Anthony Sabatini of New York writes to tell me that the auto-text patent asserted by Acacia subsidiary AutoText in Cleveland might be invalid in light of the Control Data Corp CDC6600 console system developed two decades earlier. He points interested readers here (warning, massive PDF file). Sabatini offers this observation about software patents like this:

We have 30 years of software technology starting in 1950 that was not patentable. The patent office, by recognizing only itself as the registrar of technology, has made it possible for the unscrupulous to patent technology from that era since it does not exist in the patent database.

Next, a reader using the name "IP Standing" (hehe) observes that Antor Media is up to no good:

Here is an interesting troll trick that I have not seen discussed, but maybe I just missed it. Antor Media filed a patent infringement case against a single, essentially unknown defendant, AEBN (on-line porn sites), on Nov. 5th. Then, two day later, on Nov. 7th, they apparently remembered that they had left off the other 13 defendants, so they filed an amended complaint.

Probably not an accident, since these are some well-known defendants. The result of this trick is (1) a preview of which judge gets the case (Folsom) before all the other defendants are added; and (2) no one looks at amended complaints, so this case flys below the radar when these big-name defendants are added. If you didn't like the first-assigned judge, you could just drop the case, refile and see who comes up next. Once you get the judge you want, add the remaining defendants. Also, since AEBN is basically a no-name company, attorneys who subscribe to CourtLink, RFC Express, and other case-filing alert services are likely to ignore the case or put it at the bottom of their pitch list. No alert service looks at amended complaints and
updates new defendants. Also, you gotta love a case where the lead defendant is an on-line porn-provider and the co-defendants are respected companies from the telecomm, food, entertainment, automobile, and chemical industries. WARNING - Don't open any of the AEBN google search results with your door open or your kids or secretary in the room!

I couldn't have said it any better. The added defendants include media (Gannett, Univision, McGraw Hill), manufacturing (Ford Motor, EI du Pont), retail (Wal-Mart, Circuit City), high tech (Xerox, Cisco), and more. Sneaky, Fulbright & Jaworski on behalf of Antor, sneaky.

BIOTROLL ALERT!!! Well, an NPE, anyway. Individual inventor from Norcross, Georgia, gets angioplasty stent patent. Assigns it to a shell, and then to another shell. Plaintiff ends up being Wall Cardiovasular Technologies, LLC, a Texas corporation with principal place of business in Marshall, Texas. Parent is Cardio Holdings, LLC, a Delaware corporation with a principal place of business in Marshall, Texas. Parent of Cardio Holdings is probably another shell, and so on. Defendants are relative strangers to EDTX, Johnson & Johnson and Boston Scientific. Wall represented by a who's who of Texas lawyers: Otis Carroll, Judge Parker, Franklin Jones, Calvin Capshaw, led by Susman Godfrey.

Finally, IP Innovation and Technology Licensing Corp. -- in other words, ACACIA -- filed a lawsuit in Marshall against Google, accusing Google's search engine and Google Earth of infringing two patents. This is the same Acacia sub that sued Red Hat and Novell over Linux, with the same lawyers - Johnny Ward and Eric Albritton. But these are different patents. The patents asserted against Google are 5,276,785 and 5,675,819, which Acacia got from Xerox. Nice going, Xerox.

TT

Acacia Sues Apple Over Digital Video Background Alteration Feature in iChat

Let's see, Acacia just finished litigating with (losing to!) Microsoft in Beaumont, Texas, just settled one of its cases against AT&T pending in Madison, Wisconsin (details confidential, but sending its stock up 10% yesterday, followed by down 25% in after hours trading due to the MSFT verdict), and has now sued Apple.

This case was filed, of all places, in East St. Louis, Illinois, in the Southern District of Illinois. The chosen law firm -- the only legitimate connection to the district -- is Simmons Cooper of East Alton, Illinois (a St. Louis suburb).

The patent in suit, 5,764,306, pertains to real-time digital alteration of a video background. Allegedly, Apple infringes by a similar feature in iChat when used with the Leopard OS. The patent's inventor, Michael Steffano, lives in Austin. According to this, Steffano filed for his patent in 1997 after he had founded a company, Viewics Corp., which practiced his patented invention. In fact, the complaint says that Apple is willfully infringing the '306 patent because of Viewics' StarFX product (see also here and here). Viewics was sold in 2001, but not sure to who.

The ownership of the '306 patent is, well, a bit fuzzy. First the patent was assigned to The Metaphor Group of Irving, Texas. The patent office assignment records back this up, with an assignment in March 1997. But in April 2004, Steffano recorded that on March 18, 1997 (7 years earlier), the patent was assigned to Digital Property Managment Group, of Los Gatos, CA. The only problem is that DPMG, a Texas company, wasn't actually formed until 2001, according to papers filed with the Texas Secretary of State. DPMG's sole member was Bruce T. Renouard of Los Gatos, CA. Who is he? Evidently, the Vice President of Sales of Power Integrations, Inc. in San Jose, CA. (Renouard joined Power Integrations in 2002, after he formed DPMG).

But Canadian patent records (warning, large file) show the patent belonging to Viewics. So, who owned the patent in 1997-2001: Viewics, DPMG, or Metaphor? If I were Apple, I'd file a DJ, TODAY, in San Jose, and then move to dismiss the SDIL case for lack of standing.

There is no record of the patent having been assigned from anyone to the company that sued Apple, Digital Background Corporation, an acknowledged subsidiary of Acacia. In fact, the complaint, on its face, identifies the patent as being owned by DPMG, and nowhere alleges that DBC has standing. Moreover, DPMG expired in 2004 for failure to pay Texas franchise taxes, and was reinstated this past May by Mr. Renouard working with the inventor. So, evidently, he was moonlighting from his job at Power Integrations. Apple, by the way, is or at least was a customer of Power Integrations.

More fun: the '306 patent expired in 2006 for failure to pay maintenance fees, and then was revived upon petition.

This is the third time Apple has been sued in the last week. First Microlinc (a troll/NPE) sued them in Marshall, Texas. Then Acacia (troll), masquerading as AutoText, sued them in Cleveland. Now Acacia (troll), using the fake name Digital Background Corp, has launched a case in East St. Louis. Add that to three troll/NPE cases last month (Digital Reg of Texas, Wi-LAN, and Leaper Footwear), and Apple has its hands full. Surge, indeed.

* Update 11/17/07: It occurs to me that there may be more than one Bruce T. Renouard, and/or this may be Power Integrations behind DPMG, not Mr. Renouard personally. Nobody else showed up with that exact name on Google in the Bay Area, but Google's not perfect. Whatever is the case, Acacia got the patent and is suing now.

Acacia Loses To Microsoft

At 3:45 pm CST today, the Beaumont, Texas jury found in favor of Microsoft and against Acacia. The jury deliberated for 2 hours. I have no other details.

Update: I have heard that the jury found both asserted claims not infringed and invalid. Microsoft had filed a motion for summary judgment of noninfringement in August, which was denied a month before trial. (The motion and denial were sealed).

I guess we'll be seeing a flurry of posts how the EDTX isn't as defendant-friendly as everyone thinks it is! Yep. In any case, it seems to me that congratulations are in order for Weil Gotshal. Matt Powers did the closing argument, versus Sam Baxter and Mike McKool for Acacia/"Computer Acceleration Corp." And let's not overlook local counsel Clay Dark and Larry Germer, who navigated the way for Microsoft's attorneys. The Austin-Powers team ruled!

Hey, can we transfer one of my cases from Judge Sue Robinson to Judge Clark?

And in case you haven't gotten your fill of Acacia yet, my inbox is filling with tales of yet another lawsuit it filed, this one against Apple. I'm checking it out, and will have a post tomorrow.

Texas Contingency Fee Firm on the Why Congress's Proposed Venue Reform is Just Wrong

A new blog called "Patent Litigation Lawyer" explains why I am wrong on venue reform. Not surprisingly, "Patent Litigation Lawyer" is really a contingency fee law firm located in Texas. In other words, the one class of people with the most to lose from venue reform. The firm, Williams Kherkher, has litigated cases in EDTX recently.

I didn't find their reasoning that persuasive. First, they argue, venue reform is improper because "several of the judges were appointed by George W. Bush, who has made plain his stance against judicial activists." That makes no sense. They try to parlay that reasoning into the statement that there have been no massive settlements or verdicts in EDTX due to the conservative judges, but the data doesn't support this conclusory statement. I dispute anyone who says a $36 (Orion) - $156M (TGIP) verdict isn't massive to open their checkbooks.

Second, they cite the much-repeated stats from Michael Smith that EDTX really isn't that plaintiff friendly because only 2 out of 7 cases tried in 2007 resulted in a plaintiff's verdict. Again, that's not really true. One of those 5 cases that's not being counted as a plaintiff verdict, the TGIP case, was actually a $150M+ verdict. It's verdicts of that size that has defendants scrambling to pass venue laws that make sense - regardless of what the judge does with it on JMOL. The fact is that the historical success rates of plaintiffs in jury trials is still better in EDTX than just about anywhere else in the country.

Third, they argue that having specialized patent courts and judges is a good thing, and the judges there have "an impressive patent pedigree." I don't think there's any doubt that the good judges of EDTX have accumulated a ton of experience through on-the-job learning. But the argument that "we have done it for the past few years and thus it's the right thing to do going forward" just doesn't make sense. Yes, I believe in FRCP 1. But I also believe that other courts are equally capable of following that rule of civil procedure, and if they don't, the local attorneys in those courts will figure a way to make it happen. Look at NDCA. It follows the same patent rules as EDTX, and cases there, among many of the judges, move at a good clip towards trial. There have been some big verdicts there, too. Non-practicing entities sitting on patents susceptible to summary judgment just don't want to be there, because defendants' summary judgment motions of noninfringement and invalidity will actually be considered, at a point well before trial, as opposed to EDTX. And there's the chance of getting some Intel, Cisco, and Google engineers on the jury.

In fact, cases in EDTX are now being scheduled for 30 months out from filing. I can name a dozen districts that are less than that. How exactly is being in support of EDTX being in support of "speedy?" That being said, I can also name a dozen judges in those other districts that I'd enjoy being in front of much less than the EDTX judges!

Also, interestingly, Williams Kherkher has a web page outlining their views on patent reform, here. They advise their clients to hurry up and file their patent infringement cases now, before patent reform is passed. Yes, that would explain the surge.

Labels/Tags Added to Blog

As some of you have undoubtedly noticed by now, I have added tags (which Blogger calls "labels") to each of the posts. There's a handy-dandy alphabetical list of labels on the right side of the blog. Unfortunately, for some of my longer posts, I am limited by Blogger to the number of characters in a post's labels. I am considering abandoning the very clunky Blogger for hosting elsewhere. We'll see.

Acacia v. Microsoft

Michael Smith reports here that the Computer Acceleration Corp. v. Microsoft case started in Beaumont last week. Of course, Smith refers to "CAC" as if it were a real company, as does all the media. It's a troll. It's Acacia. Call it for what it is.

Sam Baxter and Mike McKool of McKool Smith have done the heavy lifting for Acacia, and Kevin Kudlac (of Austin) and Matt Powers of Weil Gotshal ("the Austin-Powers team") for Microsoft. I understand that Judge Clark is firmly in control, and has gotten involved to whip into shape evasive experts on both sides. As of this morning, the parties had about 8 hours combined of evidence time remaining on the clock, so it is likely that as I type this, the trial is reaching its end. Expect that closing arguments will be tomorrow -- and maybe even the verdict.

Acacia Conquers Cleveland

Last week was a big week for multi-defendant cases. Not only did you have the big Microlinc case in Texas I still am not discussing, you had Aris Mardirossian's texting case in Maryland against 131 defendants, and now I have learned that Acacia -- through it's newly formed subsidiary Autotext Technologies, Inc. -- sued 23 defendants last Friday in the Northern District of Ohio. In Cleveland.

Why Cleveland? Plaintiff is an uber-troll headquartered in Southern California, and none of the 23 defendants have their headquarters in Cleveland. The husband-wife inventors are both from Brookline, Massachusetts at the time of the invention, and probably still live there. (Joe Weber offers his expert services here listing a MA address, and appears here and here as the VP of Business Development for AssistMed, with a 617 area code). This lawsuit makes sense just about anywhere other than Cleveland -- unless, as seems typical with Acacia cases, they find the lawyers they like, and then just file the cases where the lawyers are. And the lawyers they seem to like here are from a Cleveland firm.

Defendants include:

1) Apple (for Mac OS X 10.4 Tiger operating system and Safari browser)
2) AT&T (for AT&T 8525 telephone)
3) Helio (for Helio fin telephone)
4) HP (for HP iPAQ 210 Enterprise phone)
5) HTC (for HTC Mogul phone)
6) IBM (for IBM Lotus Notes e-mail program)
7) Kyocera (for Kyocera Slider Sonic telephone)
8) LG (for LG-U8110 and VX8700 telephones)
9) Microsoft (for Windows Mobile 6 operating system)
10) Motorola (for Motorola Q telephone)
11) Nintendo (for the Nintendo Wii game system)
12) Nokia (for the Nokia 2610 telephone)
13) Nuance (for the Nuance T9 Predictive Text software)
14) Palm (for the Palm Treo 750 telephone and the Palm OS operating system)
15) Qualcomm (for the Qualcomm Eudora 7.1 email program)
16) RIM (for the RIM Blackberry 7100 series, Pearl series, 7105t and 7130 series telephones)
17) Samsung (for the Samsung Blackjack telephone)
18) Sanyo (for the Sanyo Katana II telephone)
19) Sony (for the Playstation III game system)
20) Sony Ericcson (for the Sony Ericsson W610i telephone)
21) T-Mobile (for the T-Mobile Wing telephone)
22) Verizon (for the Verizon Wireless PN-300 telephone)
23) Zi (for the eZi Text software).

Let's see, that's 13 cellphone manufacturers, 2 enterprise phone manufacturers, 2 game system manufacturers, 2 operating system companies, 2 email companies, and 2 predictive text software companies, all sued on the same claim of U. S. Patent 5,305,205. And looking at that patent, filed in 1990, it really has nothing to do with the accused products of today. For example, I happen to be sitting here right now, allegedly infringing the '205 patent by using one of the devices listed above. That device has a list of names and phone numbers. As I touch letters in the keyboard on my device, it provides a list of names with those letters contained within the database stored on the device. But does my device have "frequency data?" Does it store and retrieve "vocabulary words?" Heck no.

Turning to the email function, it does automatically translate abbreviations into certain words. But not in a manner anywhere close to the means-plus-function elements of the '205 patent. I have no idea whether these claims are valid or not - the priority date is early. But I do see a summary judgment of noninfringement in this patent's future by at least my device maker! And I see millions in attorneys' fees being spent by these companies who are seemingly being sued every other week lately.

I hope the judge does award attorneys' fees in this case - to defendants for having to put up with this nonsense. It wouldn't be the first time Acacia has been sanctioned for filing a frivolous case.

But in fairness: if Acacia wants to send a claim chart for any of the accused devices, I will be happy to post it here. And/or on Techdirt or Slashdot.

Established and Emerging IP Business Models

Thanks to Ron Laurie of Inflexion Point Strategy for giving me permission to reprint/post a paper he and Raymond Millien of PCT Capital presented at the Sedona Conference last month. The paper, which can be downloaded here, outlines some names that are familiar around these parts, and some new players, too. Good reading if you wondered out Altitude Capital Partners, Rembrandt, Intellectual Ventures, Acacia, and others fit together in the big picture in today's world of patent commoditization.

Update: Peter Zura has good observations about the Millien/Laurie paper here.

What Do The White & Case Lawyer, The Gift Card Magnate, and the Real Estate Developer With Politically Active Children Have in Common? All Trolls

Or NPEs! You decide. It's time to clear the mailbox and also address a couple of recent NPE/troll cases of note.

Tinkers & Chance

Joe Mullin of the Daily Journal keeps turning up interesting stories. I only wish that the articles weren't subscription-only so I could share them. But Joe now has a blog where he shares some facts he uncovered about two Bay Area patent lawyers who formed a Texas shell and sued in Marshall. According to the failed motion to transfer, Tinkers & Chance is a Texas partnership operated by Brian Marcus of the San Francisco law firm Vierra Magen etc. etc., and Warren Heit, of megafirm White & Case. First Scott Harris, now Warren Heit. And there have been other patent law firm partners I have mentioned here that have gone trolling in Texas. Paul Hickman. Kevin Zilka (#81, here). Bruce DeKock & Kevin Russell (#103, here). Who's next? When are associates going to get in on the action?

Heit and Marcus are the named inventors on the patents, but threaten numerous corporations, demand out-of-whack damages, and form a shell in Texas to sue there, and you inch into the troll category, in my opinion (being patent lawyers helps, too).

Anyway, Heit and Marcus, represented by Haynes & Boone in the Marshall litigation against Leapfrog, formed their partnership in Texas despite absolutely no connection to the area. Tinkers & Chance, according to the Mullin article, is named after a 1920s double play combination by the Chicago Cubs. Heit and Marcus met at Tufts University engineering school. In 2004, Heit and Marcus asked for $25M in up-front money from LeapFrog, and $600M over the life of the patents. Howrey represented LeapFrog in the litigation, which settled on the eve of trial.

Here is the letter where Heit (using a White & Case phone number in the letterhead) demands $600M from LeapFrog. Mullin implies that Heit had his firm's blessing to pursue this side business. My guess is that LeapFrog won't use White & Case in the future for anything.

LeapFrog is a medium-sized company with $500M in revenue last year and little profits. My guess is right now they are probably on the side of patent reform.

Card Activation Technologies

Next we turn to Card Activation Technologies. This company says it has a patent covering "transaction technology used for processing gift cards, phone cards, and other debit purchase transactions." According to a recent press release, it has issued 364 notice letters to infringers of its patent. Its website has links to an "independent" appraisal report pegging the worth of this single patent at $3.7 Billion. Card Technologies has so far sued McDonalds, Walgreen, Sears, Barnes & Noble, Aeropostale, OfficeMax, and as of last week, TJ Maxx. McDonalds settled; the rest of the cases are proceeding in Chicago. Who is Card Activation Technologies? A spinoff of Medcom USA. The CEO and VP of Medcom, located in Scottsdale, Arizona and Irvine, California, respectively, are the very same two people who are the CEO and VP of Card Activation, which is "located" in Chicago. Medcom purports to provide health care "transaction solution" services, but it looks like the real money to be made by this burgeoning troll, is the multi-billions it expects to get from its patent. Orum & Roth of Chicago representing Card.

Interestingly, despite settling with McDonalds in February 2007, Card Activation paid maintenance fees in August 2007 as a small entity. Oops?! The patent also previously lapsed due to failure to pay maintenance fees, but was revived due to "unintentional error."

Aris Mardirossian, d/b/a Technology Patents, LLC

Now let's go from Chicago to Greenbelt, Maryland, where just outside the beltway, non-practicing entity Technology Patents, LLC sued 131 companies last Friday, including AT&T, Motorola, Palm, Microsoft and Yahoo, and a host of European telecoms including France Telecom, KPN, and Chinese telecoms like Chunghwa. At least in this one, it's a holding company for the inventor, Aris Mardirossian (who immigrated long ago from Armenia), who lives in nearby Germantown, Maryland. Brian Higgins of Maryland IP Law has an excellent summary here, including a report on how the plaintiff plans to get personal jurisdiction: because these Telecoms are allowing SMS messages to be sent into the US.

Higgins politely calls Mardirossian's company a NPE, but I think if you sue 131 companies in one day, it might be fair, under the categories I described previously, to consider this a Category 2 NPE/Troll. Anyway, that's in the eye of the beholder. More importantly, Mardirossian seems to be an interesting fellow. In addition to being an "inventor," he has also been criticized as filing frivolous defamation lawsuits to intimidate others. (To Mr. Mardirossian, who has sued for defamation recently, I wasn't referring to you when I used the word troll. Really).

Described as a political activist, he has been fined for violating campaign finance rules. He tried to donate $2300 to Barack Obama from each of his young children, but the Obama campaign caught on and returned the money. Mardirossian responded the money shouldn't have been returned because his children, ages 7 and 8, "are very engaged in politics." According to ESPN (TrollTracker's first link to ESPN!!), Mardirossian lives next door to Washington Redskins' owner Daniel Snyder, and Mardirossian applied for a permit to cut down a bunch of trees between his mansion and Snyder's, citing the reason that he wanted to "protect his nut-allergic children from hickory nuts" from those trees. Luckily for the environment, Mardirossian's application was rejected.

ESPN did describe him as a "multimillionaire real estate developer who holds patents on an eclectic range of items, including a missile defense system." C'mon. There's nothing eclectic or eccentric about getting an issued patent on communicating via monitored brain wave activity. Or, as others have described it, a patent on mind reading and the implanting of thoughts through a microchip in the brain.

Heh. Maybe Obama will return all of the money he got from Mardirossian now.

First Rusty Rose, now Mardirossian. I guess having multi-millions of dollars isn't enough to stop one from suing 131 companies at once. Nixon & Vanderhye taking the lead here, on behalf of Lex Luther. (To Mr. Mardirossian, who has sued for defamation recently, Lex Luther is my favorite Superman character! He's so creative!).

Personally, by the way, my favorite of Mardirossian's inventions: a patent application on releasing a balloon when natural disaster strikes. Must. Stop. Now.

Northeastern University and Jaaaaargh Corp.

Lawrence Ebert of IPBiz describes lawsuit in ED Texas against Google last week. Certainly, Northeastern is not a troll. They are a university, who had no business filing its lawsuit in Marshall. I find it unbelievable that they didn't know about Google until 2.5 years ago. And I find it equally unbelievable that it took them 2.5 years to find a contingency lawyer to take the case. Unless the patent is really crappy....

That's it for today. And I didn't even have time to get to Microlinc. That one's just going to have to wait for the November troll call. Back tomorrow with an interesting article about emerging IP business models.

100th Post: A Call for the Senate to Pass Patent Reform

When I started this blog, I had no idea there would be so many things to write about. I just knew that in a few cases I knew about, the plaintiff made great efforts to hide who was really behind the lawsuit. And I thought that was unfair. If you're getting sued for patent infringement, you have a right to know who is really behind the lawsuit, and so does the public. So I started digging up publicly available information. What I found amazed me - so many patent plaintiffs, especially in the Eastern District of Texas, make no products, and just try to extract money out of their IP. Some are inventors, but many, increasingly, are patent speculators.

I'm amazed that there has been enough material for 100 posts. And I have barely scratched the surface. This is really the year of the patent troll. Last year, approximately 6,000 defendants were sued nationwide in about 2,800 patent cases. This year, the 6,000th defendant was sued sometime in early October. With the number of cases up nationwide probably 5% over last year, we're still projected for at least a 30% increase in the number of defendants sued. More on that data in a later post.

Why? It's because of the numerous multi-defendant patent litigation cases being brought by non-practicing entities and patent trolls in the Eastern District of Texas. Not only do you have cases like the 64-defendant Orion case from earlier in the year, the umpteen-defendant cases by Katz, and the 42-defendant Minerva cases from the summer, but you have a whole slew of 10-to-15 defendant cases brought by the likes of Acacia (all acquired patents), Wi-Lan (partially acquired patents), Rembrandt (all acquired patents), Saxon/Altitude Capital Partners (all acquired patents). The list goes on and on.

Think about it. When else in our nation's history have we experienced a 30+% increase in the number of patent claims in one year?

Now think about why we are currently experiencing this extreme uptick in patent litigation. It's simple: patents, at least in the eyes of the market, are overvalued right now. Damages are being awarded in patent cases without basis in reality, and out of proportion to the actual value of the invention. Cases like the $1.5B Alcatel v. Microsoft verdict are shocking, but so was the $34M Orion IP v. Hyundai verdict to me, compared to the actual invention at issue in that case. Settlements are being squeezed by plaintiffs filing primarily in plaintiff-friendly jurisdictions like the Eastern District of Texas, where, despite the efforts of some to paint it to the contrary, the juries typically side with the patentee, and the judges rarely grant summary judgment, and when they do, it's on the eve of trial. Or, in the case of Judge Clark in the TGIP case, it's after trial, after most defendants bailed and AT&T spent a whole lot of money on its attorneys.

Do you want more evidence that the Eastern District of Texas is fueling this large increase? Right now, there have been over 1,250 defendants sued in the district through the first 10 months of 2007 (so it's not including the 60 defendants that have been sued in the first week of November in EDTX, including 13 by PA Advisors/Spangenberg and 19 by Microlinc, LLC). Extrapolating, there will likely be 1,500 defendants sued in the Eastern District of Texas this year. That's as many as were sued in all of 1990, in the entire United States.

It's time for the Senate to act and pass meaningful patent reform. The "patent bill opposition coalition," as they call themselves, surely will complain, as they have done, that such a bill will ruin our economy, and cause world hunger and massive deaths. I'm not kidding - BIO ads are just like that. And it's really unfortunate, because none of that is true. While perhaps I don't agree with everything in the Senate bill, having damages actually proportional to invention won't put pharmaceutical companies out of business. They'll still be able to sue and enjoin their competition, which will be enough incentive to make drugs at the massive profit margins they charge during the time when the drug is on patent. They may even still get the same amount of damages under the "entire market value" rule, which is codified as one option in the bill. And they won't care about the venue reform, because all of the biopharma cases are already litigated in venues that make sense, like New Jersey and Delaware.

Patent laws haven't appreciably changed in 50 years. The FTC and the NRC both realized that change needed to happen. The Supreme Court has stepped in and addressed a few areas, unrelated to the bill, like obviousness. It's time for the Senate to act and address the others.

And if children still go hungry in Africa, it won't be because of this patent bill.

A Paradigm for Wasting the PTO's Time

Over at Patently-O, Dennis Crouch has a very interesting post about something else Scott Harris is up to: actually practicing patent law. Get the whole scoop here.

I am amused by two things:

1) That Harris or anyone else thinks that the following rejected claim "promotes the progress of science and useful arts," in any way, shape or form:

24. A paradigm for marketing software, comprising: a marketing company that markets software from a plurality of different independent and autonomous software companies, and carries out and pays for operations associated with marketing of software for all of said different independent and autonomous software companies, in return for a contingent share of a total income stream from marketing of the software from all of said software companies, while allowing all of said software companies to retain their autonomy.

Yes, you read it right. Harris, for himself and some co-inventors, is trying to corner the market on marketing software in a particular business method. Aren't there marketing companies out there that help coordinate marketing for other companies in exchange for money? Putting aside the 101 issues Crouch and others so ably discuss, isn't kind of obvious, if you are doing it for a fixed fee, to charge a contingency fee percentage instead? Let's take that claim, and redo it with something Harris may now be rapidly becoming familiar with:

24tt. A paradigm for marketing law firm services, comprising: a law firm that operates legal cases for a plurality of different independent and autonomous companies, and carries out and pays for legal cases for all of said different independent and autonomous companies, in return for a contingent share of a total income stream from money made from all of said companies' legal cases, while allowing all of said companies to retain their autonomy in making decisions about the legal cases.

OK, so I "altered" Harris's claim a little. But you get the idea. The concept of controlling expenses and providing services in exchange for a contingent percentage fee while letting the client/customer retain autonomy is inherent in law firm contingency fee cases. Substitute in marketing of software in place of providing legal services, and you get the rejected claim. Yet I read somewhere that the PTO did NOT think it was obvious, just unpatentable subject matter? Did anyone cite the "paradigm" of The Law Offices of James Sokolove, who has been doing this sort of "contingency income stream" scheme for years? (For those of you who click on the above link, it's an actual full-page advertisement from the 11/12/07 edition of Business Week magazine, page 95. I love this ad. "Fighting a Patent Violation is Tough: We Should Know; We Do It All The Time." But if you go to their website? No examples of actual cases they have done. They do list Microsoft v. Eolas, eBay v. MercExchange, etc. The other thing I found amusing? The disclaimer that "most cases of this type are referred to other attorneys for principal responsibility." They don't even do the cases themselves!!! But I digress).

My tongue is a little in my cheek on this one. If you think I concocted that whole above discussion, just to mock the full-page ad of James Sokolove's law firm in a national magazine of prominence, then, well, you're probably right. Who knows, maybe marketing software in this way will transform society!

2) The second thing that amuses me about this case is that Dennis Crouch (indirectly) compared my blog to People Magazine! You know, you go into this blogging thing expecting to be the next Linda Greenhouse and you end up being compared to Joan Rivers. Where's the respect? Oh well, that's what I get for mocking contingency lawyers and serial non-practicing entities. I should watch it: I may be one of those one day myself....

Troll Call and Other Patent Stats for October 2007

Let's get right to it this month. The onslaught of cases in Eastern Texas continues. This month, I notice somewhat of an uptick in declaratory judgment cases. Also, as I posted yesterday, I notice perhaps the first troll case filed by Altitude Capital Partners. Note that in September, Computer Acceleration (Acacia) filed one lawsuit against 7 defendants. This month, Judge Clark ordered that case closed and split into 7 new cases, which were filed in October. I have therefore only added 6 cases (and no defendants) to this months's stats to account for this. I didn't add to the troll list, either - it was already counted last month. I also didn't add the two Katz cases that showed up in CDCA, since they were transferred from elsewhere.

October Statistics

With those disclaimers out of the way, here are the October stats:

ED Texas: 34 patent cases, 115 defendants sued (12 troll cases)
D New Jersey: 23 patent cases, 39 defendants sued (3 troll cases)
CD California: 21 patent cases, 150 defendants sued (1 troll case)
SD New York: 5 patent cases, 8 defendants sued (0 troll cases)
D Delaware: 20 patent cases, 33 defendants sued (6 troll cases)
ND Illinois: 14 patent cases, 25 defendants sued (1 troll case)
ND California: 13 patent cases, 19 defendants sued (0 troll cases)

Non-EDTX Troll Cases

Wow, this month there are almost as many non-EDTX troll/NPE cases as there are EDTX troll/NPE cases. But don't get too excited, many are DJ suits.

1) Heidelberg USA v. Screentone Systems Corp. (DJ) (Del., October 1). Acacia. These DJs (and ones in the Western District of Washington) relate to a case filed in EDTX where, allegedly, Acacia failed to get proper standing.

2) Konica Minolta v. Screentone Systems Corp. (DJ) (Del., October 1)

3) American Patent Development Corp. v. Movielink LLC (Del., October 2)

4) International Intellectual Management Corp. v. 111 Defendants (CDCA, October 2). New patent troll - website here. Apparently run by a few LA patent attorneys who, not surprisingly, are representing the IIMC in their lawsuit against 111 small businesses. And who says patent trolls are the plague of large corporations alone?

5) Discover Products, Inc. v. Phoenix Licensing, LLC (DJ) (NDIL, October 11)

6) Papst Licensing GmbH & Co v. Samsung (2 entities) (DNJ, October 12)

7) Refined Recommendation Corp. v. Netflix (DNJ, October 16). Acacia. Posted on it.

8) Citicorp Credit Services v. LPL Licensing (DJ) (Del., October 17)

9) HP v. Acceleron (DJ) (Del., October 17)

10) Cisco v. GPNE (DJ) (Del., October 24)

11) Digital Technology Licensing, LLC v. T-Mobile (DNJ, October 25). Posted about DTL and its parent General Patent Corp here. I guess they thought they couldn't get personal jurisdiction over T-Mobile in EDTX? Because it's the same patent that is being litigated there.

Cumulative Statistics for 2007

Here are the statistics for the first ten months of 2007, comparing the various districts:

ED Texas: 309 patent cases, 1,076 defendants sued (124 troll cases)
CD California: 224 patent cases, 602 defendants sued (15 troll cases)
D New Jersey: 156 patent cases, 296 defendants sued (10 troll cases)
ND California: 116 patent cases, 222 defendants sued (16 troll cases)
ND Illinois: 114 patent cases, 219 defendants sued (21 troll cases)
D Delaware: 113 patent cases, 271 defendants sued (15 troll cases)
SD New York: 86 patent cases, 229 defendants sued (11 troll cases)

So the Eastern District has already blown away the record for most number of patent cases filed in a judicial district in one year. 309 patent cases in 304 days.

Troll Call for October 2007

Now here's the non-practicing entity/troll call for the Eastern District of Texas for October, 2007:

113) Data Match Enterprises of Texas, LLC v. eHarmony.com, Inc., Date.com, Friendfinder Network, and Singlesnet, Inc. (Marshall, October 4). Posted on this here. A Ward & Olivo special.

114) Digital Reg of Texas, LLC v. Hustler.com, Apple, Audible, Blockbuster, LEP, Inc., Macrovision, Microsoft, Playboy, and Sony (and one related Sony company) (Tyler, October 5). Ah yes, Larry Flynt comes to Tyler. Read about it here.

115) IP Innovation, LLC v. Red Hat & Novell (Marshall, October 9). This one got a lot of press due to the attack on Linux. But you read it first here.

116) ESN, LLC v. Cisco (and related company) (Texarkana, October 15. No wait, October 16. No, October 15. When was it "filed" again?). I posted on it here. Michael Smith also had a post on the case. I had thought there was a dueling jurisdictional battle. But then I read an article yesterday that ESN dismissed its case against Cisco. I looked, and the same is true for the Cisco case against ESN: gone.

I got some critical emails for using the word "altered" with respect to the Texas docket. Well, let me respond. If a document appears one day with a date stamp, and the next day that date stamp disappears and is replaced with a different stamp, what would you call it? To the extent the use of the word "altered" implied that anyone did anything illegal, that was not my intent. I'm positive the court clerk was following local custom, as was the ESN Texas lawyer. But putting aside the propriety of such actions with respect to local custom, isn't such a "customary" action detrimental to the credibility of the Court? We have to be able to trust the U.S. courts and their ECF system. How can we trust the courts when date stamps on documents disappear one day and reappear the next day with a different date?

This all could be averted if the Local Rules committee adds a rule that no document shall be replaced without a motion made to correct the docket.

117) Mobile Micromedia Solutions LLC v. General Motors (Marshall, October 16). I posted about Mobile Micromedia here. At the time, MMS had only sued Nissan, and was about to go to trial. I guess GM is #2.

118) VTran Media Technologies, LLC v. Comcast, Charter Communications, Time Warner Cable and Verizon Communications (Marshall, October 17). Wow, a case I appear to have missed. I saw the name VTran and assumed it was a real company. But, now I think not. The manager of VTran is Lawrence Brannian, who lists an address at the Dallas law firm Snell, Wylie & Tibbals. Brannian is of counsel there. The complaint, filed by Ward & Olivo, says that VTran is located at 104 E. Houston St., Suite 140, Marshall TX. Hmmmmmm. Same address as Ward & Olivo client Data Match Enterprises of Texas - see #113 above. Getting crowded in that suite!

Anyway, according to this Ocean Tomo press release, the patents-in-suit were auctioned on October 26, 2006 in New York City. And according to this article, "an anonymous bidder paid $900,000" for these 2 patents (the expected value was $1,250,000). Hey - is this the first instance of an Ocean Tomo auctioned patent asserted in patent litigation?

USPTO assignment records show that on 10/26/06 -- same date as the Ocean Tomo Auction -- the inventors and some other guy who apparently went to college in Kansas with the inventors assigned the patent to Concert Technology Corporation of Durham, NC. Concert Technology is interesting - they have been transferred patents through this auction, and also from 3Com and others. According to their website, Concert "has a strong focus on acquiring and licensing core technologies in the music and video markets." Evidently, Concert does some R&D, or at least their website makes it look like they do.

So I'm stumped and befuddled by who is behind this. It looks like a burgeoning troll. But on the other hand, they employ engineers. And if this is Concert, why use a fake corporate shell in Texas through a Dallas law firm? Why not take advantage of the CSIRO decision and try to exert leverage through the fact that they are a real-ish company and can get an injunction?

More on the patents. Taeus, an engineering firm that helps clients make money from their patent portfolios, gave the lead patent a TIPScore of 3.8 on a scale of 1.0 to 5.0. Finally, if you search for the lead inventor on Google, the fifth or so hit is for a divorce proceeding, where Monslow and his ex-wife fought over the two patents-in-suit in a case that went all the way to the Supreme Court (of Kansas, that is).

See, a simple boring patent case, when you dig deeper merely by using Google for a few minutes, involves divorce, Supreme Court battles, auctions, and nefarious manipulation of Texas shell corporations. Discovery in this case would seem to be appropriate in Kansas, North Carolina, maybe New York, but probably not Texas.

119) Saxon Innovations, LLC v. Nokia (2 entities), High Tech Computer Corp., LG (2 entities), Nintendo (2 entities), Palm, Research in Motion (2 entities), Samsung (3 entities), and Sharp (2 entities) (Tyler, October 18). I posted on this case here. Then I put two and two together in this post. Saxon Innovations is Altitude Capital Partners, who I posted on here. Now, in addition to pulling the strings in the Visto v. Microsoft case (and other Visto cases), Altitude is flying high with a case of its own. Who knows if it's the first. That's the thing about this business: you can have shell after shell and remain relatively hidden.

Hmm. The Federal Rules of Civil Procedure require disclosure of parent corporations in order to assist judges in recusal decisions. But it only requires the immediate parent. In light of the trend of multiple layers of corporations, the rules should be changed to require disclosure of all parents, up to the ultimate parent.

120) Sky Technologies, LLC v. Procuri, Inc. (Marshall, October 19). Sky Technologies is no stranger to the courts in Texas. Their latest suit was against SAP and Oracle in late June.

121) Phoenix IP, LLC v. Schneider Electric (and 1 related company), Power Measurement Ltd. (and 1 related company), and Square D Company (Marshall, October 22). Erich Spangenberg and David Pridham, continuing the litigation factory.

122) Advanced Technology Incubator, Inc. v. Sharp Corp. (and related company) and Dai Nippon Printing (and related company) (Marshall, October 29). Advanced Technology Incubator is a company set up by Zvi Yaniv, an Israeli who moved to the US for graduate school and stayed (apparently). He set up the company in Michigan when he lived there, but then moved it to Austin, Texas when he moved there to be CEO of an Austin-area company and a kinetic artist. According to the complaint, the patent was originally assigned to LG-Philips but now he has the rights. This entity is more along the lines of an individual inventor holding company/NPE, not a troll.

123) Wi-LAN, Inc. v. Acer (2 entities), Apple, Atheros, Best Buy, Broadcom, Circuit City, Dell, Gateway, HP, Intel, Lenovo (2 entities), Marvell, Sony (4 entities), and Toshiba (3 entities) (Marshall, October 31). See post here.

124) Wi-LAN, Inc. v. Westell Technologies, 2Wire, Atheros, Belkin, Best Buy, Broadcom, Buffalo, Circuit City, D-Link (2 entities), Infineon (2 entities), Intel, Marvell, Melco Holdings, Netgear, and Texas Instruments (Marshall, October 31). See post here.

That's it for this month's installment.

TT

New Holding Company/Troll Saxon Innovations is Actually Altitude Capital Partners

I described Saxon Innovations, LLC as a new holding company here. I noted that they are a subsidiary of Saxon Holdings, LLC, "with a business address on Madison Avenue in New York City."

The address of Saxon Holdings, 485 Madison Avenue, bothered me, because there are numerous businesses in that building, all of which were candidates to be the new patent troll: law firms, venture capitalists, investment companies. And for those of you who have read my posts, you know I can be somewhat obsessed about addresses.

Then I was working on this month's troll call (in progress), and I stumbled across this post. I saw my reference to Altitude Capital Partners, and remembered they were in NYC. And sure enough, same address. Voila.

Just what we need. Competition for Acacia and Intellectual Ventures. And speaking of which, I recently chuckled at Acacia's recent 10K, where they reported on competition in the patent aggregation business (hat tip to Groklaw for the lead):

The Acacia Technologies group expects to encounter competition in the area of patent acquisition and enforcement as the number of companies entering this market is increasing. This includes competitors seeking to acquire the same or similar patents and technologies that we may seek to acquire. Companies such as British Technology Group, Rembrandt Management Group, and Intellectual Ventures LLC are already in the business of acquiring the rights to patents for the purpose of enforcement, and we expect more companies to enter the market.

Thank god for Acacia. Job security for all of us patent types. Back with the October troll call tomorrow.

Plutus (???) Sues Google, Yahoo and Facebook

PA Advisors, LLC, is a Texas corporation formed by Erich Spangenberg. It is located at the same address in Marshall as all the other Plutus entities, but David Pridham is not on the complaint, and neither is Johnny Ward. Nor does it list Plutus as a parent (as of the time of this posting). So not sure if this is a Plutus venture, or another company affiliated with Spangenberg.

It sued 13 companies last Friday in Marshall: Google, Yahoo, Facebook are the big 3. The defendants are all located in California, New York, or Europe. The inventor of the patents, Ilya Geller, is a Russian emigre who lives and works in Brooklyn. Mr. Geller, despite apparently using the patents in his business Lexiclone, instead kept the patents in his original company, Mightiest Logicon Unisearch, before transferring them to P.A. Advisors in late September. Of course, Spangenberg did not record the assignment until the day he filed suit. Very clever. The accused products are Google AdWords, and the like. "Systems and methods for automatically generating personalized user profiles and for utilizing the generated profiles to perform adaptive Internet or computer data searches."

In a twist, Jenner & Block of New York is representing PA Advisors. And the case was assigned to Judge Ward. He should recuse himself, right? His son represents Spangenberg's other companies in a whole bunch of cases. Can Spangenberg file another case without Ward Jr. and have it decided by Ward Sr. when Sr. knows that Jr. handles all the other cases? I guess we'll wait and see.

One more twist: Jenner & Block representes Fish & Richardson in the Scott Harris case where F&R is a codefendant with Google. The week after appearing on behalf of Fish as codefendant of Google, Jenner & Block sues Google. Let's hope Jenner & Block ran that one by Fish and got their approval first! Google might be one unhappy camper if not.

Statistics Don't Support Dennis Crouch's Conclusion That Patent Litigation in EDTX is "Waning"

Dennis Crouch reports that patent filings in the Eastern District of Texas are, or soon will be, waning.

I strongly disagree. First, the statistics that Dennis reports are strongly to the contrary. He notes that almost one in six patent cases in the US filed in the last two months were filed in Eastern Texas. In fact, the number of cases filed in 2007 in EDTX has already shattered all previous records. As I will soon report, there have been 309 patent cases filed in EDTX this year already, through 304 days. CDCA is a distant second.*

Second, and more importantly, like most others, Crouch ignores the real statistic that needs to be looked at: the number of defendants sued. Although my stats for October are still preliminary due to CDCA not being finalized yet, here is how the top 7 compare in terms of number of defendants sued in each district in the past 3 months:

EDTX 371
CDCA 270 (and if you subtract out the 1 massive troll case with 111 defendants filed in October, then you get 159)
DNJ 126
DDE 72
NDCA 66
SDNY 62
NDIL 56

I don't think one can make the statement that EDTX is waning when as many defendants have been sued there in the last 3 months as in San Francisco, New York, New Jersey, Chicago, and Delaware combined.

Crouch's other points: a recent products liability decision spells doom for cases in EDTX because they'll all be transfered out. Right. Somehow, I don't believe that will happen. For example, Judge Folsom (or was it Craven?) recently refused to transfer an Acacia case (Disc Link) out of Texas, because everyone has a right to a speedy jurisdiction - that was a big part of the rationale. The day patent cases start being transferred out regularly on 1404/venue reasons is the day people will stop filing there. That's why the Western District of Wisconsin hasn't caught on, despite their one-year-to-trial record. The Texas judges know that, which is why they don't transfer out cases regularly on 1404/venue. To be sure, the opinions are centered on the right of the plaintiff to file where they can get the speediest resolution, etc. Someone will someday take a denial of a motion to transfer up to the Federal Circuit on mandamus in light of the recent Fifth Circuit opinion in In re Volkswagen II. Until then, I am skeptical that patent cases will be transferred anywhere.

Another point: Judge Clark granted JMOL in TGIP. Yes, that happened. But let me point out that people are drawn because of the jury success rates. A $156M verdict, overturned or not, is still a big deal, and the Clark JMOL may keep people away from Beaumont, but it won't keep them from Marshall or Tyler. Michael Smith's statistics and Dennis Crouch's conclusions notwithstanding, the only thing that's going to stop the freight train that is East Texas is going to be Congress.

*(Note: I don't count the transferred Katz MDL cases as 45 separate CDCA cases, as others do. That's one multidistrict case transferred to CDCA. Most of those Katz cases were filed in EDTX or elsewhere first, and will go back there for trial. With Katz cases, EDTX is still #1, but only by 30 or so rather than by around 75).

Wi-LAN Changes Venue from Ottawa to the Patent Capital of America, Marshall, Texas

Philip Brooks has the whole story here, including the list of 22 companies sued. Wi-LAN is a Canadian patent troll with 220 patents in a variety of fields. They apparently have asserted WiFi and DSL patents against the entire WiFi and DSL industry. Well, anyone who isn't licensed.

Wi-LAN is a publicly traded company in Canada. Their mission?

Our mission is to sign license agreements with all companies in the world who use Wi-LAN’s patented inventions and to selectively acquire new patents to ensure the Company's long-term growth.

Wi-LAN's earlier lawsuits were in Ottawa. Now they have turned to Sam Baxter and McKool Smith to sue "all [the] companies in the world."

CNN Money has an article about the new lawsuit, including Wi-LAN's admitted strategy to, just weeks before filing their lawsuit, hire someone to start a research program, to help them get not only future patents, but also help secure "permanent injunctions" in light of Judge Davis's ruling in CSIRO v. Buffalo:

In addition to providing Wi-LAN with future patents, Skippen acknowledged that the firm's research and development activities and university funding may also help the firm obtain permanent injunctions in litigation, as the courts could recognize the firm's status as a research and development organization.

We'll see if this ends up being meaninful research, or just a sham "to help the firm obtain permanent injunctions in litigation." Love how he gave that to the press, and cannot wait for the deposition.