What does Paul Allen need to win his patent lawsuit against Apple, Facebook? Texas

Microsoft cofounder Paul Allen really needs a lesson in how to effectively file and win patent lawsuits. For starters, you don't file them in a Washington State federal court. Other patent plaintiffs seem to get what Allen doesn't: You file in East Texas, in what is affectionately or unaffectionally called -- depending on which side of the verdict you're on -- the "rocket docket." Instead, Allen is back in a Seattle court, refiling a patent infringement case that got tossed about two weeks ago.

US District Court Judge Marsha Pechman vacated the original complaint for being too vague -- "spartan," she wrote -- listing infringers but offering no real examples of infringement. Based on my long experience reporting about technology patent cases, such little details probably wouldn't have stopped Allen in East Texas. The new lawsuit is more explicit, citing examples of real products that allegedly infringe on his patents. The lawsuit names Apple, eBay, Google, Facebook, Netflix, Office Depot, OfficeMax, Staples, Yahoo and YouTube -- but, hey, not Microsoft.

The 35-page refiled lawsuit, dated December 28, officially lists Allen's Interval Licensing LLC as plaintiff. The lawsuit alleges that the infringers violate United States Patent No. 6,263,507, which "was duly and legally issued for an invention entitled 'Browser for Use in Navigating a Body of Information, With Particular Application to Browsing Information Represented By Audiovisual Data.' The '507 patent describes an invention that enables a user to efficiently review a large body of information by categorizing and correlating segments of information within the body of information and generating displays of segments that are related to the primary information being viewed by the user."

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The infringement claim against AOL sums up the kind of allegations made against other defendants. According to the legal document:

AOL operates many websites that provide articles, videos, advertisements, and other types of content to users. In order to help users find additional content items that may be of interest, the software and hardware that operate the websites compare the available content items to determine whether they are related. When a user views a particular content item, the AOL websites generate displays of related content items so as to inform the user that the related content items may be of interest.

Apple's alleged infringement applies to iTunes Store, the App Store and even Apple TV. "Displays of related content" is one of the major themes running through all the claims.

Where Patent Trolls Go

Perhaps these patent nuances would be too difficult for some juries to handle -- and, yes, Allen asks for a jury trial. East Texas juries seem to cut to the chase, frequently siding with patent holders. Three Texas towns stand out for delivering big payoffs for patent plaintiffs: Beaumont, Marshall and Tyler. Beaumont achieved notoriety in 1999, when a lawsuit against Toshiba led to a $2.1 billion settlement. Tyler is about 196 miles north of Beaumont, in southeast Texas. Marshall, located 62 miles east of Tyler, is another popular patent lawsuit venue. Tyler, with a population over 98,000, is the second-largest of the three towns. Beaumont: 111,000; Marshall: 24,000.

The so-called rocket dockets of Marshall and Tyler have been good to patent plaintiffs over the years. Randomly chosen from among the many wins:

  • In October, a federal jury awarded Mirror Worlds $625.5 million in damages against Apple.
  • In May 2009, a jury found that Microsoft violated i4i patents for XML.
  • In November 2008, a jury found that Sony violated an Agere patent and ordered payment of $18.8 million.
  • In July 2007, a judge in Tyler ordered Nintendo to pay $21 million to local company Anascape for patent infringement related to Wii and GameCube controllers.
  • In April 2006, a jury ordered Microsoft to pay $115 to z4 Technology; a judge later increased the damages against Microsoft.

Most patent-troll cases filed in Eastern Texas share fairly common characteristics:

  • Most plaintiffs are companies or individuals, rather than, say, Apple, IBM or Microsoft.
  • Patents tend to have been recently issued, typically not long before an infringement claim is filed.
  • Plaintiffs typically don't produce actual products or offer services, which in many other court jurisdictions would raise questions about the patent's legitimacy.
  • Plaintiffs demand a jury trial, and the case either goes to jury or to settlement.
  • Area of filing is well known for either judges or juries favoring patent holders over defendants.

Allen's patent lawsuit shares some of these characteristics. By the numbers -- and they have nothing to do with the merits of Allen's lawsuit - East Texas is more popular venue than Washington State. The Administrative Office of the U.S. Courts tracks the number and kind of cases filed each year. Through March 31st (the most recent data), there were 767 civil cases related to copyrights, patents and trademarks filed in Texas federal courts -- 299 in the Eastern Texas U.S. District Court (the so-called rocket docket). By comparison, there was a total of 90 similar cases filed in all of Washington State.

Perhaps Allen should rethink his legal strategy.

[Editor's Note: Distance between Tyler and Beaumont, Texas corrected.]

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