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February 15, 2007

Litigation Trends

IP Law 360 reported 2006 litigation trends in the computer technology and financial services industries, from its survey of court dockets. As might be expected, Microsoft was hammered hardest. Telecom companies are now just starting the IP tussle over VOIP, the nascent revolution. And financial service companies are just now getting into the game.

Patent licensing companies are increasingly involved in asserting patents on behalf of individuals and small companies. Chris Carraway, patent litigation head at Klarquist Sparkman: "These days I bet a majority of patent cases do not involved competitors, but non-practicing patent owners over damages." Carraway figures any big product launch is an open invitation to a patent suit.

But computer companies are not the only targets. Web site operators, retailers in particular, are increasingly under the gun.

Here's the top tech dogs in 2006 courtroom patent brawling, including number of lawsuits involved, regardless of plaintiff or defendent:

1. Microsoft = 19
2. Verizon = 16
3. Apple = 12
4. HP = 11
5. Intel; Dell = 9
7. AT&T = 8
8. Adobe; Broadcom; CA; Motorola; Orace = 7

Microsoft was sued for email, sales, and anti-piracy software technologies. Its Office and Windows XP operating system were also involved in litigation skuffles. Microsoft's video game machine, Xbox, was shaken not stirred by assertions, including for its vibrating joysticks.

The 2007 big enchilada for Microsoft is its appeal to the Supreme Court from an assertion by AT&T for speech translation code. The issue is 35 U.S.C. ยง 271(f), whether domestic patent law extends to copies of software sold overseas. The district court & CAFC sided with AT&T.

Patent spats in the financial sector are just hotting up. The 1998 State Street v. Signature Financial Group validated business method patents. Given pendency, the first wave of financial method patents are now being enforced. Tim Brackett at Nixon Peabody: "The process of acquiring and issuing patents takes several years, so it's not surprising that today we're seeing an onslaught of patent litigation." Predominant assertion areas include processing services, curstomer relations and methods of handling transactions. Large players are now patent mining, looking for gaps in coverage areas to exploit.

The top money hustlers involved in patent litigation in 2006:

1. Citigroup = 9
2. Bank of America = 4
3. PNC Financial Services Group = 3
3. U.S. Bancorp = 3

DataTreasury, a patent holding company, has been riding herd with its portfolio covering "Check 21," federally mandated check processing.

Business method patents, like software patents, are relatively pure flights of imagination, within the grasp of creative individuals, not requiring extensive construction or extensive testing, as with complex devices or pharmaceuticals. Because of this, software and business method patents have been derided as unworthy of the same level of protection.

Posted by Patent Hawk at February 15, 2007 11:31 PM | Litigation