Paul Allen's Patent Case Against Apple, eBay, Facebook, Google, AOL, Netflix, Yahoo (AOL, AAPL, EBAY, GOOG, NFLX, ODP, OMX, SPLS, YHOO)

Patent wars in technology are nothing new.  Sometimes they are promising, sometimes they are just noise-making events.  Paul Allen’s Interval Licensing LLC has filed a complaint today in the U.S. District Court of the Western District of Washington against major internet search and e-commerce companies.  Allen’s Interval alleges that several key internet firms have infringed on four patents held by Interval.  The defendants named are AOL, Inc, (NYSE: AOL), Apple Inc. (NASDAQ: AAPL), eBay Inc. (NASDAQ: EBAY), Facebook, Google Inc. (NASDAQ: GOOG), Netflix, Inc. (NASDAQ: NFLX), Office Depot, Inc. (NYSE: ODP), OfficeMax Inc. (NYSE: OMX), Staples, Inc. (NASDAQ: SPLS), Yahoo! Inc. (NASDAQ: YHOO), and Google’s YouTube.

This would by definition be considered a ‘patent troll’ case, although if you read through the report there could eventually be some rather large ramifications here.  What the end result will be has far too many variables and unknowns at this point and is also too far out in time to ponder at the current time.

Interval’s claim is that it holds patents of Interval Research, the former company founded by Allen and David Liddle in 1992 to perform advanced research and development in the areas of information systems, communications, and computer science.  The patents covered in this suit are said to cover fundamental web technologies first developed at Interval Research in the 1990’s.  Allen’s suit alleges that major e-commerce and web search companies are infringing those patents.  While most IP suits do not take away technology ultimately, this is one of those suits that could matter in the grand scheme of things if you read further.

David Postman, a spokesman for Paul G. Allen, noted, “Interval Research was an early, ground-breaking contributor to the development of the internet economy… Interval has worked hard to bring its technologies to market through spinning off new companies, technology transfer arrangements, and sales of its patented technology.”  Further noted is that these patents are fundamental to the ways that e-commerce and search companies now operate.  The claim goes on to further note that these were not acquired patents, and they that they were developed “by and for Interval.”

Here is where this suit gets rather interesting and why it could matter at least against some companies such as Google.  The release noted that Interval has also helped fund outside projects, including Sergey Brin’s and Lawrence Page’s research that resulted in Google.  Having this tie is what (potentially) makes this case an important case.  How a ruling will come or how a settlement will come is something that will not be known for some time.  Unfortunately, this is IP and patent law.  Those cases can take years.

The patents Interval is asserting include:

• 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.”

Due to the strong market this Friday afternoon, the suit is having no current impact on most of these shares.  AOL started early on enough (1991 to 1993 for online services, earlier than that for individual and specialized dial-up services) that it might not have as much worries here.  The claim that it helped fund outside projects noting Brin and Page’s research that resulted in Google is significant.

Again, how this pans is far too soon to even consider.  This will definietly be a case to watch as it develops.  As Paul Allen is a co-founder of Microsoft Corporation (NASDAQ: MSFT), it is no wonder that Microsoft was intentionally not a part of this case.

JON C. OGG