Facebook Scores A Win In Patent Lawsuit

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A lawsuit filed against Facebook in 2008 has had its day in court -- and lost.

Ohio-based Leader Technologies filed suit against Facebook, charging that it had infringed on their 2006 patent for "a method and system for the management and storage of electronic information” developed by the company's founder, Michael McKibben and Jeffrey R. Lamb. It took six days to hear the trial in a Delaware court, but in the end the eight-member jury ruled in Facebook's favor, finding that although patent infringement had taken place, the original patent was invalid.

The patent abstract describes the tool as: A data management tool. The tool is a unified, horizontal system for communications, organization, information processing, and data storage. The tool operates seamlessly with existing platforms, and is a common workflow layer that is automated with a scalable, relational database. The tool uses one or both of a relational and object database engine that facilitates at least many-to-many relationships among data elements. The highest contextual assumption is that there exists an entity that consists of one or more users. The data storage model first assumes that files are associated with the user. Thus, data generated by applications is associated with an individual, group of individuals, and topical content, and not simply with a folder, as in traditional systems.
Facebook general counsel Td Ullyot took the opportunity to criticize current patent law, saying, "Facebook is a strong advocate of legal reforms that would limit baseless patent claims such as this one, and in the meantime we will continue to defend vigorously any patent lawsuit filed against us.”

In recent years, many companies have been challenged by the practice of " ," where a company files an overly broad patent, then relies on challenging other companies for infringement. Facebook has faced similar patent lawsuits, such as one from Phoenix Media, charging that Facebook had violated a patent covering the creation of individual personal pages for users.

The case is Leader Technologies Inc v Facebook Inc, U.S. District Court, District of Delaware, No. 08-00862. The patent in question is U.S. Patent 7,139,761.

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A short, practical update expanding on ’s post and ’s correction: the jury in the Delaware case found the asserted patent invalid based on pre‑filing commercial activity (the on‑sale and public‑use bars), even though some claims were found to read on Facebook. The court’s post‑trial opinion explains that the jury’s invalidity finding on those statutory bars was supported by the evidence. (law.justia.com)

“Commercial activity before issuance” generally points to the longstanding on‑sale/public‑use rules: if an invention was offered for sale, publicly used, or otherwise commercially exploited before the critical date and was “ready for patenting,” patentability can be barred. Whether an early demo, beta test, or a sale starts the clock depends on facts (what was shown, to whom, and under what secrecy). The USPTO/MPEP discussion summarizes the tests courts apply. (uspto.gov)

That factual basis matters when deciding if this was “patent squatting.” The label “patent squatting” or “patent troll” describes a business model (PAEs) that acquires and asserts patents aggressively; it is not the same legal problem as a patent being invalidated for prior public use or on‑sale activity. Empirical studies and agency reports stress the difference between abusive assertion practices and ordinary invalidity defenses. (ftc.gov)

Practical takeaways for builders and defenders: file an early provisional or non‑provisional application before any public demo or commercial offer and keep dated engineering and test records; use NDAs and controlled beta programs; run freedom‑to‑operate/prior‑art checks; and if sued, consider USPTO reexamination or PTAB proceedings (IPR/post‑grant routes) in addition to court defenses. The USPTO pages on provisional filings and PTAB procedures explain those options. (uspto.gov)

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Gena777 0 Newbie Poster

What I read in another source about this case was that the patent was found invalid only because of the patent holder's commercial activity before issuance. That being the case, I'm not sure that "patent squatting" applies as an accurate characterization in this situation. It's not really an uncategorical win for Facebook.

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