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Friday, August 27, 2010

Microsoft Co-founder Sues Apple, Google and Facebook

Microsoft Co-founder Paul Allen is suing Apple, Google, Facebook and eight other companies through his current firm, Interval Licensing LLC.

The lawsuit alleges that 11 different companies, including YouTubeYouTubeYouTube, Netflix and AOL, have violated four different patents associated with web search and e-commerce.

As the Wall Street Journal notes, Interval Licensing LLC is a firm that holds IP developed at the now-defunct Interval Research. Interval Research was an incubator that Allen financed during the InternetInternetInternet bubble of the late 1990s.

In a statement, Interval describes the patents at the center of the alleged infringements:

  • United States Patent No. 6,263,507 issued for an invention entitled “Browser for Use in Navigating a Body of Information, With Particular Application to Browsing Information Represented By Audiovisual Data.”
  • United States Patent No. 6,034,652 issued for an invention entitled “Attention Manager for Occupying the Peripheral Attention of a Person in the Vicinity of a Display Device.”
  • United States Patent No. 6,788,314 issued for an invention entitled “Attention Manager for Occupying the Peripheral Attention of a Person in the Vicinity of a Display Device.”
  • United States Patent No. 6,757,682 issued for an invention entitled “Alerting Users to Items of Current Interest.”

What is frustrating about this lawsuit, from an outsider’s perspective, is that the nature of these patents — while based in software and technology — also have clear ties to business methods. Unfortunately, the Supreme Court’s recent ruling in the Bilski case didn’t make the blurry lines between these two areas any more clear.

We’ll update this post with more information after we obtain the actual court filing from PACER.

[img credit: WikipediaWikipediaWikipedia]

The legal action against Apple, Yahoo, Facebook, Google and eBay, as well as six other firms, asserts that web technologies first developed by Interval Licensing have been infringed.

The patents are key to how e-commerce and search websites worked, it says.

Google, Facebook and eBay immediately said they would fight the accusations.

"This lawsuit against some of America's most innovative companies reflects an unfortunate trend of people trying to compete in the courtroom instead of the marketplace," a Google spokesman said in a statement.

"Innovation - not litigation - is the way to bring to market the kinds of products and services that benefit millions of people around the world."

A Facebook spokesman called the action "completely without merit".

'Key technology'

In the suit filed in the US District Court in Washington on Friday, Interval said it was seeking damages and a halt to the alleged violations of its patents.

Start Quote

We will do whatever is necessary. This is an important step”

End Quote David Postman Interval Licensing

The four patents concerned essentially involve using web browsers to find information; letting users know when items of interest appear; and enabling adverts, stock quotes, news update or video images to pop up on a computer screen while the user is engaged in another activity.

The company also alleges that it helped fund outside projects including research by Larry Page and Sergey Brin that resulted in Google.

The other companies named in the lawsuit are AOL, YouTube, Netflix, Office Depot, OfficeMax and Staples.

Interval does not name a precise figure for damages, but a spokesman told the BBC that it would be "determined as this progresses".

"We will do whatever is necessary. This is an important step. It is the first time that Paul Allen has filed a suit like this," David Postman said.

"Some of the technology developed by people working for Paul Allen a decade ago is now key to this search and e-commerce space. It is part of our daily life on the web and has shown itself to be of value to the industry today."

Patent activity

There has been a recent flurry of patent lawsuits involving Silicon Valley companies.

Apple, Nokia and HTC are involved in a long-running dispute over patent infringements involving smartphones.

Oracle has fired off its own legal action against Google, alleging that the search giant's Android mobile phone operating system infringed patents Oracle now holds for the open-source Java programming language, acquired through its purchase of Sun Microsystems.

There has also been an increase in people buying up companies to leverage the patent portfolio. But Mr Postman said that is not the case with Mr Allen's action.

"We are not asserting patents that other companies have filed, nor are we buying patent originally assigned to someone else. These are patents developed by and for Interval," he explained.

Mr Allen co-founded Microsoft with Bill Gates in 1975, and later started Interval in 1992. At its height, the company employed over 110 scientists, physicists and engineers.

The Wall Street Journal said among those who worked there were Robert Shaw, a co-creator of chaos theory; Max Mathews, who wrote the first widely used computer programme for music; and David Reed, one of the founders of the TCP/IP internet protocol.

Mr Allen, who made billions of dollars from his Microsoft shares, recently pledged most of his $31.5bn fortune to charity.

Last year, he revealed he had been diagnosed with non-Hodgkin's lymphoma.

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