Pakistanis angry over detentions in Times Sq. case Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They
AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e
BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German
Minister seeks closure of anti-Berlusconi websites Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who
By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an
Edition:
U.S.
Africa
Arabic
Argentina
Brazil
Canada
China
France
Germany
India
Italy
Japan
Latin America
Mexico
Russia
Spain
United Kingdom
Home
Business
Business Home
Economy
Davos 2012
Technology
Media
Small Business
Legal
Deals
Earnings
Summits
Business Video
The Freeland File
Markets
Markets Home
U.S. Markets
European Markets
Asian Markets
Global Market Data
Indices
M&A
Stocks
Bonds
Currencies
Commodities
Futures
Funds
peHUB
World
World Home
U.S.
Brazil
China
Euro Zone
Japan
Mexico
Russia
India Insight
World Video
Reuters Investigates
Decoder
Politics
Politics Home
Election 2012
Issues 2012
Candidates 2012
Tales from the Trail
Political Punchlines
Supreme Court
Politics Video
Tech
Technology Home
MediaFile
Science
Tech Video
Tech Tonic
Opinion
Opinion Home
Chrystia Freeland
John Lloyd
Felix Salmon
Jack Shafer
David Rohde
Bernd Debusmann
Nader Mousavizadeh
Lucy P. Marcus
David Cay Johnston
Bethany McLean
Edward Hadas
Hugo Dixon
Ian Bremmer
Mohamed El-Erian
Lawrence Summers
Susan Glasser
The Great Debate
Steven Brill
Geraldine Fabrikant
Jack & Suzy Welch
Breakingviews
Equities
Credit
Private Equity
M&A
Macro & Markets
Politics
Breakingviews Video
Money
Money Home
Tax Break
Global Investing
MuniLand
Unstructured Finance
Linda Stern
Mark Miller
John Wasik
James Saft
Analyst Research
Alerts
Watchlist
Portfolio
Stock Screener
Fund Screener
Personal Finance Video
Money Clip
Investing 201
Life
Health
Sports
Arts
Faithworld
Business Traveler
Entertainment
Oddly Enough
Lifestyle Video
Pictures
Pictures Home
Reuters Photographers
Full Focus
Video
Reuters TV
Reuters News
Article
Comments (0)
Follow Reuters
Facebook
Twitter
RSS
YouTube
Read
Home prices drop, consumers turn gloomier
3:01pm EST
'X Factor' Shakeup an Admission of Failure; Enter Mariah?
11:32am EST
Italian authorities end search for cruise ship bodies
|
12:38pm EST
It's "Ex-Factor" for Abdul, Scherzinger, Jones
3:57pm EST
Stephen Colbert's Super PAC raises $1 million
10:16am EST
Discussed
141
U.S. outrage as Egypt bars Americans from leaving
77
U.S. raid frees two pirate hostages in Somalia
67
Gingrich, Romney play for cheers in Florida debate
Watched
Iran sends toy drone to Obama
Sun, Jan 29 2012
Boy's foetus twin shock
12:14am EST
Iran threatens action against U.S.
Mon, Jan 30 2012
Analysis: Patent plaintiffs target Facebook as IPO approaches
Tweet
Share this
Email
Print
Related News
Kodak employee sues company directors over stock
3:25pm EST
EU regulators investigate Samsung over mobile patents
8:10am EST
In Facebook IPO, bankers seek prestige over fees
Mon, Jan 30 2012
Facebook to file IPO documents as soon as Wednesday: report
Fri, Jan 27 2012
Smartphones drive record Samsung profit
Fri, Jan 27 2012
Analysis & Opinion
LinkedIn “alert” shows users still on edge about privacy
Corporate Governance: proxy advisory guidelines and the shifting landscape of benchmarking executive compensation
Related Topics
Tech »
Media »
Facebook »
A Facebook logo is displayed on a Kodak photo kiosk during the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 11, 2012.
Credit: Reuters/Steve Marcus
By Dan Levine
SAN FRANCISCO |
Tue Jan 31, 2012 3:39pm EST
SAN FRANCISCO (Reuters) - As it prepares for one of the biggest IPOs ever, Facebook is coming under the same fierce attacks being waged against other big technology companies: patent lawsuits.
Last year, Facebook was named as a defendant in 22 lawsuits accusing it of patent infringement, double the number from 2010, according to a Reuters analysis of court documents on legal database Westlaw, a Thomson Reuters unit.
Among the lawsuits is one alleging Facebook violated a patent that covers the core ability to transmit messages to large networks of users. Facebook said in a court filing earlier this month that it will seek to dismiss that lawsuit.
Previously, the bulk of legal challenges brought by patent holders against tech companies has focused on markets like smartphones, with defendants including Apple and Microsoft.
The attacks against Facebook signal that social media has become a new front in the Silicon Valley patent wars. The company's adversaries include a former lawyer at Kirkland & Ellis, one of the biggest U.S. law firms, whose new firm filed the lawsuit over how Facebook transmits messages.
Before 2010, online game developer Zynga, Web discount deals operator Groupon and professional social network operator LinkedIn had not faced a single patent lawsuit, Westlaw data show. Last year, the year those three companies went public, the lawsuits mounted.
Facebook faces more patent cases than any of those other companies.
Facebook is expected imminently to announce its intention to hold an initial public offering of its stock, in what could be one of the biggest U.S. market debuts ever. The company could be valued at as much as $100 billion.
The IPO climate raises the stakes for companies to demonstrate solid returns and low risks. As companies undertake an IPO, the heightened level of scrutiny from Wall Street makes aggregators think they can more easily wrest a quick settlement from companies, said Colleen Chien, a professor at Santa Clara University School of Law in Silicon Valley.
Companies are most vulnerable to patent challenges when they file their intention to go public with a form S1 with the U.S. Securities and Exchange Commission, said Ron Laurie, a specialist in IP and investment banking.
"You just knew when you filed the S1, the letters would start rolling in," said Laurie, co-founder of Inflexion Point Strategy.
A Facebook representative declined to comment.
The vast majority of the lawsuits against Internet companies were not filed by business competitors, but rather by aggregators who amass patent portfolios and attempt to wring licenses out of existing companies. The threat of litigation often compels companies to pay licensing fees to use patented technology.
Some of the most well-known aggregators are involved in the lawsuits: another company suing Facebook obtained its patents from Intellectual Ventures, the entity co-founded by former Microsoft executive Nathan Myhrvold.
IPO FRENZY
Overall, patent litigation involving tech companies has exploded over the past two years.
Smartphone manufacturers like Apple and Microsoft are engaged in a fierce legal war against fellow competitors like Motorola Mobility, all the while fielding lawsuits from aggregators. Some patent holders are derided as "patent trolls" by critics, a term the holders say unfairly paints them as villains for helping inventors make money.
Apple was sued over patents 76 times in 2011, up from 56 in 2010, according to the data available on Westlaw. Microsoft, meanwhile, faced more than double the number of patent lawsuits in 2011.
While Internet companies face relatively smaller numbers of patent lawsuits, the rate of increase for fast-growing sites has been steep.
Zynga faced nine patent lawsuits in 2011 compared to two the year before. Groupon was sued ten times in 2011, up from three in 2010, and LinkedIn faced 10 patent suits in 2011, up from five the year before.
Groupon declined to comment on patent litigation, while LinkedIn and Zynga representatives did not respond to interview requests.
Microblogging website Twitter was sued in five patent cases in 2011, up from just one case in 2010, according to court filings on Westlaw's database. A Twitter spokeswoman declined to comment. Stock investors have eagerly been awaiting a Twitter IPO, but the company has repeatedly said that it is in no hurry to go public.
Unlike other industries, in tech there is much more confusion about what the language in software patents covers, said Julie Samuels, a staff attorney at the Electronic Frontier Foundation.
"Folks who want to use those patents offensively can take advantage of that confusion," Samuels said.
But the rising fortunes of newer Internet companies give extra motivation for aggregators to demand licenses, according to one IP lawyer at a social media company.
"By and large the discussions are very divorced from the technical nature of the patent," said the lawyer, who was not authorized to speak publicly. "They tend to be more focused on your financials."
Pragmatus AV, a Virginia-based LLC that holds 51 patents, sued Facebook, LinkedIn, Google's YouTube video service and photo-sharing website Photobucket.com in 2010 after acquiring a set of patents from Intellectual Ventures. The three patents in the Facebook lawsuit involve methods for "storing and accessing media files."
Steve Mallouk, vice president of channel licensing at IV, said in a statement that IV "does not own or operate Pragmatus AV." However, IV declined to discuss the terms of its patent deal with Pragmatus, including whether IV has a stake in the litigation against Facebook and others.
If Pragmatus was hoping for a quick settlement, it hasn't happened yet. The defendants are currently seeking to have the case in a San Francisco federal court put on hold, pending a reexamination of Pragmatus's patents by the U.S. Patent and Trademark Office. A lawyer for Pragmatus did not respond to a request for comment.
Another lawsuit against Facebook was filed last year in a Long Island, New York, federal court by John Desmarais, who gained notice for leaving Kirkland & Ellis to start suing tech companies, armed in part with thousands of patents acquired from Micron.
Desmarais declined to comment.
Beyond these aggregators, no patent wars have broken out between large competitors like Facebook and Google, which moved into social networking with Google+. Facebook has only been a patent plaintiff once - against a Massachusetts media company that had already sued the social networking giant, according to the Reuters review of Westlaw filings.
Still, Samuels doesn't rule out the possibility of a future competitor war among social networking companies.
"All it takes is one party to start the lawsuits rolling," she said.
(Reporting By Dan Levine in San Francisco; Editing by Martha Graybow, Gary Hill)
Tech
Media
Facebook
Related Quotes and News
Company
Price
Related News
Tweet this
Link this
Share this
Digg this
Email
Reprints
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (0)
Be the first to comment on reuters.com.
Add yours using the box above.
Edition:
U.S.
Africa
Arabic
Argentina
Brazil
Canada
China
France
Germany
India
Italy
Japan
Latin America
Mexico
Russia
Spain
United Kingdom
Back to top
Reuters.com
Business
Markets
World
Politics
Technology
Opinion
Money
Pictures
Videos
Site Index
Legal
Bankruptcy Law
California Legal
New York Legal
Securities Law
Support & Contact
Support
Corrections
Advertise With Us
Connect with Reuters
Twitter
Facebook
LinkedIn
RSS
Podcast
Newsletters
Mobile
About
Privacy Policy
Terms of Use
Our Flagship financial information platform incorporating Reuters Insider
An ultra-low latency infrastructure for electronic trading and data distribution
A connected approach to governance, risk and compliance
Our next generation legal research platform
Our global tax workstation
Thomsonreuters.com
About Thomson Reuters
Investor Relations
Careers
Contact Us
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.