Source: Paul Allen Sues Apple, Google, Others Over Patents - WSJ.com


By DIONNE SEARCEY

Billionaire Paul Allen has made major forays into cable television and sports teams since leaving Microsoft Corp. more than two decades ago. Now he's adding another pursuit: patent litigation.
Mr. Allen, who co-founded Microsoft with Bill Gates, on Friday sued Apple Inc., Google Inc. and nine other companies asserting they are using technology developed about a decade ago at his now-defunct Silicon Valley laboratory. Mr. Allen, a pioneer of computer software, didn't develop any of the technology himself but owns the patents.
None of the defendants could immediately be reached for comment.
Patent litigation in general is on the rise and Mr. Allen's lawsuit comes amid high-profile successes of firms such as NTP Inc. and Acacia Research Corp., which enforce patents without making products. Courts have tried to rein in patent litigation with mixed results, and Congress has yet to act on legislation that would do the same.
For Mr. Allen, the lawsuit marks new terrain. He is aggressively going after companies, including many of Silicon Valley's biggest names, that he thinks are violating technology that was developed at his Interval Research Corp., a Palo Alto, Calif., lab and technology incubator he financed with about $100 million during the Internet bubble.
Mr. Allen wasn't available for comment, according to a spokesman, who said Mr. Allen's lab created the technology that he wants to mark as his own. "Paul thinks this is important, not just to him but to the researchers at Interval who created this technology," said the spokesman, David Postman. "We recognize that innovation has a value, and patents are the way to protect that."
Mr. Postman said the timing of the suit wasn't related to Mr. Allen's health or personal finances. Mr. Allen recently pledged to give away the majority of his fortune, which Forbes in March estimated at $13.5 billion. The 57-year-old was diagnosed last year with non-Hodgkin's lymphoma, but has completed treatments.
Mr. Allen's lawyers said a team has been reviewing his patent portfolio for years, seeing what's relevant to the current marketplace and pursing the technicalities necessary to complete the lengthy patent process. During that time some patents were sold or licensed.
"There are a lot of companies making a lot of money from licensing patents," said Jonathan Singer, a Minnesota attorney at Fish & Richardson who defends companies from patent suits.
NTP in July sued Apple, Microsoft and four other companies over patents related to the wireless delivery of email to cellphones. BlackBerry maker Research In Motion Ltd. paid NTP $612.5 million in 2006 to settle similar patent charges.
One of Mr. Allen's former Microsoft colleagues, Nathan Myhrvold, has amassed thousands of patents and secured hundreds of millions of dollars in patent-licensing deals from telecommunications companies and others. Mr. Myhrvold's Seattle-based firm Intellectual Ventures patents some of its inventions but also acquires patents to license.
Named in Mr. Allen's suit, along with Apple and Google, are AOL Inc., eBay Inc., Facebook Inc., Netflix Inc., Office Depot Inc., OfficeMax Inc., Staples Inc., Yahoo Inc. and Google's YouTube subsidiary. Notably missing from the defendants' list are Microsoft, in which Mr. Allen remains a major investor, and Amazon.com Inc., which is based in Mr. Allen's hometown of Seattle. Mr. Postman declined to comment on the selection of defendants.
Mr. Allen's firm had sent letters to the defendants telling them it held "patents of interest" to the company and that his firm would like to talk to the defendants about them.
The suit, filed by Mr. Allen's Interval Licensing LLC, lists violations of four patents for technology that appear to be key components of the operations of the companies—and that of e-commerce and Internet search companies in general. The suit does not estimate a damage amount.
The technology behind one patent allows a site to offer suggestions to consumers for items related to what they're currently viewing, or related to online activities of others in the case of social networking sites.
A second, among other things, allow readers of a news story to quickly locate stories related to a particular subject. Two others enable ads, stock quotes, news updates or video images to flash on a computer screen, peripherally to a user's main activity.
Since he left Microsoft in 1983, Mr. Allen has launched into a variety of enterprises. Mr. Allen founded a Frank Gehry-designed rock museum in Seattle and owns the Seattle Seahawks professional football team and the Portland Trailblazers professional basketball team.
The billions of dollars' worth of investments his firm, Vulcan Inc., put toward pursuing his vision of a "wired world" haven't all paid off. He lost $8 billion in his investment with cable company Charter Communications when it filed for bankruptcy protection.
Mr. Allen also bankrolled Interval Research. During its heyday, the lab employed more than 110 scientists, physicists, engineers "and was at the forefront in designing next-generation science and technology," the suit says. The lab included Robert Shaw, a co-creator of chaos theory, which is a field of study in mathematics; Max Mathews who wrote the first widely used computer program for music; and David Reed was one of the founders of the Internet protocol TCP/IP.
The lab worked on numerous projects, with goals to create technology to use in Mr. Allen's ventures in telecom. In later days it also focused on developing technology to license to others. Over the course of a decade, Interval was issued 300 patents.
It successfully marketed some of its patent portfolio, including cellular voice processing technology and motion-detection technology used in games that allows a computer to "see" commands. It also created a "smart" toy called "Red Beard's Pirate Quest" and later sold the technology behind it to Lego Group.
Work at Interval Research was phased out after plans for commercializing its technology didn't materialize as expected. "The market lagged behind Interval's technology," Mr. Postman said.
Write to Dionne Searcey at [email protected]