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February 2, 2009

Pyrrhic Victory

In arguing the right to enforce slavery, Microsoft achieved a pyrrhic victory by transfer from Texas to Oregon in Odom v. Microsoft. With transfer, Microsoft has shot itself, delaying further court ruling that Odom has a valid and enforceable patent infringed by a central feature of Microsoft's Fluent User Interface. Companies adopting the interface must wonder whether it's worth the risk adopting a patented technology which Microsoft is ambitiously marketing and licensing, but over which Microsoft has no control.

Inventor Gary Odom sued Microsoft in the Eastern District of Texas. Well-honed patent rules, speedy time-to-trial, patent-savvy judges.

In an effort to delay the inevitable train wreck, Microsoft raised sham affirmative defenses, and argued for transfer. Smelling that pile of shit, Texas Magistrate Judge Love blew his nose, washed his hands, and transferred the case.

In his transfer order, Judge Love weighed the eight Gilbert factors guiding determination of transfers, in light of the 5th Circuit Volkswagen product liability case, and more recent TS Tech patent case. Most significantly, Judge Love found "the vast majority of identified key witnesses in the case are much closer to Oregon than Texas." That weighed for transfer, as well that Oregon should decide whether it wants to enforce perpetual indentured servitude, a form of lifelong slavery. The judge gave no weight to the factor of court congestion, time to trial, even though transfer likely delays trial by two years or more.

If this case is any harbinger, it is that venue shopping, deference to plaintiff choice of venue, is passé in light of TS Tech. The case was transferred almost entirely because of where a very few identified witnesses lived. The judge even counted Odom's living in Oregon against Odom choosing to litigate in the Eastern District of Texas.

Microsoft has alleged "that Odom's claims for relief are barred by the doctrine of unclean hands for Odom's breaches of covenants and misrepresentations concerning Odom's services on Microsoft's behalf and his patenting activities." To wit, Odom's 1999-2001 employment with patent boutique Klarquist Sparkman, and 2001-2004 post-employment consulting work for Microsoft, some through Klarquist.

Microsoft must be desperate to raise ludicrous defenses that have absolutely no chance of prevailing, as they have no basis in either fact or law. And fraught with considerable backlash potential. But that desperation is well deserved.

Odom is owner/operator of this country's premier patent technical consultancy, Patent Hawk, and one the best prior art searchers worldwide. A man of integrity, wanting only to enforce a valid patent, Odom himself scoured the prior art prior to asserting the patent. The patented technology of 7,363,592 is clearly valid. Something which Microsoft, itself having searched the prior art the past few months, surely knows. Not that they won't try to gin something up for trial. Microsoft appears to have quite a team of fiction writers working this case.

In 1999, Odom signed an employment agreement with Klarquist, which contained a "conflict of interest avoidance" proviso, which read:

Recipient agrees not to assert, without the express written approval of Klarquist, any patent or other intellectual property interest against any client of Klarquist, for example, by making allegations of infringement, attempting to license, bringing or threatening suit, or otherwise.

For Microsoft to argue that it has benefit of that agreement now, eight years after Odom left Klarquist employment, is to argue perpetual slavery of Odom and his intellectual property - to Microsoft, who was not even a party to the agreement, or intended beneficiary.

Odom argued in court at the transfer motion hearing -

Klarquist had Odom sign an Employment Agreement, which contained a "Conflict-of-Interest-Avoidance" proviso, aimed at protecting Klarquist against accusation of conflict of interest.

The agreement expired when Odom stopped being an employee, as nothing in the agreement extended its terms.

Now Microsoft wants claim as beneficiary. But the proviso was to the benefit of Klarquist, not Microsoft.

If there was any standing to the Agreement, Klarquist could file suit in Oregon state court. But Klarquist has done nothing of the sort.

Klarquist terminated Odom's employment in 2001, then immediately hired him as a consultant. Recognizing that the Employment Agreement had expired, Klarquist had Odom sign Consulting Contracts. These Contracts had redundant provisions to the Employment Agreement - a tacit acknowledgement by Klarquist that the Employment Agreement was no longer in effect.

A different conflict-of-interest proviso was in the 2001 Consulting Contracts, because Odom was no longer an employee.

Microsoft has also raised a stink about Odom providing consultation to Klarquist on the Reiffin v. Microsoft suit in 2001-2004. Odom signed a consulting contract agreeing to tell Klarquist if Odom prosecuted "any patent applications relating to subject matter" that Odom consulted on. Reiffin got patents on multithreading, and asserted against Microsoft Windows, and Office 2000. The Reiffin multithreading patents are completed unrelated technically to Odom's tool group patents. Office 2000 didn't have the tool ribbon features of Office 2007 which infringe Odom's patent. Yet Microsoft wants to make something of Odom not telling Klarquist about his tool group patent, despite Odom's patents and Reiffin's being unrelated subject matter, and even as Klarquist knew that Odom was getting patents in 2001. Which is why that clause was in the consulting agreement in the first place.

Not only are the 2001 and later allegations meaningless, they ignore the fundamental fact that they are ex post facto. Odom has an effective filing date of November 2000. All the technology was disclosed then. Is Microsoft going to argue that Odom stole their invention after he filed his patent? That would be about as sensible as their other arguments.

The transfer to Oregon of this case conveniences Odom, putting the matter in Odom's home court. The delay that Microsoft has imposed upon itself only runs the damages clock longer, and will provide no succor to evade infringement. With its unscrupulous allegations, Microsoft is placing a "weasel tax" on top of the "patent tax" that it will have to pay to settle this case.

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The tactics Microsoft has employed in the Odom case may be run-of-the-mill for inventors having had any relationship with it. Miki Mullor has run into similar flak. (Seattle Tech Report, Ars)

Posted by Patent Hawk at February 2, 2009 10:59 AM | Litigation

Comments

That is so funny, I was just playing some Europa Universialis: Rome just a few weeks ago. Played as Epirus fighting the Pyrrhic war against Rome. Instead of only winning a pyrrhic victory though I kicked their tails and then took over most of their land. Now I have most of the known ancient world :) Takes so long to play that I probably won't ever finish it up. The whole world is against me after I took over the vast majority of Pontus so they keep murdering my officials. Very annoying. On the other hand, it makes declaring war to take them over easier. The game is like one big history lesson though.

Posted by: 6000 at February 2, 2009 2:07 PM

I said this the last time you posted stuff about your case, the claims of the '592 patent are anything but "clearly valid." There are a host of problems, not the least of which (for claim 1, at least) is 101 Bilski.

Besides, how can there be almost no prior art cited during prosecution? It's funny that you write that you did a search only AFTER filing the patent. "A man of integrity, wanting only to enforce a valid patent, Odom himself scoured the prior art prior to asserting the patent."

As for prior art, Netscape 4 had toolbars that seem to do exactly as you describe, and if not exactly, it's going to be obvious. All of those were pre-2000. If memory serves, IE toolbars had similar features (IE5 was March of 1999). There's screenshots of both on Wikipedia. That's after a whopping 2 minutes of thought.

Best of luck with that!

Posted by: mmm at February 2, 2009 3:28 PM

mmm,

Thanks for the comments. Please join the Microsoft brain trust on invalidating the patent.

Posted by: Patent Hawk at February 2, 2009 3:39 PM

Hawk,

I'm looking forward to following this case. Please keep us informed with your usual humor and insights.

JD

Posted by: JD at February 2, 2009 3:41 PM

If memory serves Bilski is probably more scary than the prior art for this particular patent.

"Companies adopting the interface must wonder whether it's worth the risk adopting a patented technology which Microsoft is ambitiously marketing and licensing, but over which Microsoft has no control."

I'm going to be honest with you hawk, no buyer cares that something MS put in their software was patented. Not even this much ||.

Posted by: 6000 at February 3, 2009 1:59 PM

Thanks for the comments.

I'm a bit disappointed by the vacuous nature of some of the comments,  that regular readers can't rub their mental sticks together to get a spark.

Bilski, while horrendous case law, didn't invalidate all software patents. Read Intellectually Amish, about Abele. See if you can connect the dots. Hint: the claims go to groups of tools.

6000, you missed it about my mention of Microsoft licensing its Fluent User Interface. By a mile. Other companies are adopting this technology because Microsoft is promoting it. Think about what that means.

To give some perspective on how Microsoft thinks about this technology, here's what Microsoft's Judy Jenasen, Associate General Counsel for the Office Business, had to say about Microsoft's licensing program promoting the Fluent User Interface: "There are some intellectual property rights that we can only protect by controlling their use... There's nothing evil about protecting intellectual property at all... We're a software company. This is all about intellectual property... We've invested that kind of money in it. The whole world shouldn't be able to use it... We're being very generous, I think, by letting folks use it in a royalty-free program."

But, seriously, 6000, thanks for commenting, and keep pitching. I appreciate your participation in this blog. You have added value with your perspective, and by provoking thought. Hell, the biggest problem I have with blogging is making sure I've got my head screwed on straight.

Posted by: Patent Hawk at February 3, 2009 3:10 PM

I echo Hawk's sentiments re. 6000. The contrast in perspectives is invaluable in any quest for solutions (but too bad PTO management didn't think that).

P.S. Sorry if I'm always hard on you, 6K - there's a reason for it. Thanks for your perspective too, MVS.

Posted by: NIPRA anonymous at February 3, 2009 7:02 PM

"Thanks for your perspective too, MVS."

Yeah, thanks. Because we just can never get enough of the "the backlog and pendency are the fault of applicants and the patent bar" mentality that rules the PTO.

Posted by: Most Valuable Stooge at February 4, 2009 9:00 AM

"Other companies are adopting this technology because Microsoft is promoting it."

I had a feeling that might have been what you were trying to say, but it wasn't really well said. In any case that's all the better for you. Maybe.

As to Abele ... gl. Personally were I in your position I would be very concerned about the bilski case and how things go at the SC.

Don't worry about harshness boys, I play in the big leagues.

Posted by: 6000 at February 4, 2009 11:06 AM

Aww, Stooge, your comment reminds me that I appreciate JD's perspective the most. :-)

http://www.nipra.org/google-search-parody.html

Posted by: NIPRA anonymous at February 5, 2009 6:43 AM

NIPRA,

Yeah, that's a great perspective that guy's got.

If you'll excuse me, I have to go punch up a bunch of form paragraphs, insert some misspellings, cite some case law I've never read, and sit in on some "conferences" in which I'll opine on the non-patentability of claims in an application that I've never read in view of some prior art that I've never read either.

Stooge out.

Posted by: Most Valuable Stooge at February 5, 2009 7:28 AM