Judge Rejects Twitter’s Attempt To Move Patent Lawsuit To Californian Court

Internet companies such as Twitter, Google (NASDAQ:GOOG) and Facebook are hit with patent suits regularly, often in inconvenient venues. They would therefore want those lawsuits to be heard in the relatively tech-friendly courthouses of Northern California.

However, it looks like that is not going to happen anytime soon. Twitter raised a novel argument. It asked to move the most recent patent lawsuit against it to move from Virginia to San Francisco. Titter claimed that the plaintiff in this case, Dinesh Agarwal, is a Twitter user himself. He therefore agreed to Twitter’s terms of service. Those terms include a clause that states that all lawsuits must be brought against the Company in San Francisco.

US District Judge Henry Morgan however ruled against Twitter. He concluded that his own court in Alexandria (VA) is the appropriate place to hear the lawsuit. He stated that Twitter’s contract clause referring o where lawsuits must be heard, does not necessarily apply to patent suits.

The judge also did not want to create a precedent. Allowing Twitter to transfer its court case would enable other social networking companies to start similar disputes. This would potentially foster satellite litigation in every patent case involving a social networking market participant.

Twitter move was smart. If the judge had accepted its argument, companies such as Twitter or Facebook would be in a strong position to move their patent disputes to their “home court.”

In this case, Mr. Agarwal is suing in the district he has been living in for the last 25 years. He is therefore not seeking a location foreign to both parties (like East Texas). Interesting enough, Agarwal’s twitter account shows that he has zero tweets. His profile states that he is a patent lawyer as well as an aspiring screenwriter. Agarwal signed up for Twitter in January 2010 mainly for the purpose of determining whether the service infringes his patent. Later that year, he founded VS Technologies, a shell company that hold the disputed patent and he then pursued lawsuit against Twitter.

Agarwal’s patent is based on a “method and system for creating an interactive virtual community of famous people”. As a patent lawyer, Agarwal handled all the paperwork for this patent application himself. He used patents to demand royalty payments from the tech industry. This increasingly common situation is called “patent trolling”

Federal court records show that Twitter has been sued for patent infringement at least four times. In addition to this lawsuit brought by VS Technologies, Twitter is facing an ongoing patent lawsuit filed by Cooper Notification in 2009.

Twitter settled a patent lawsuit brought by TechRadium in 2009. A fourth lawsuit, filed in 2010 by lawyer-controlled patent-holding company Stragent LLC, the lawsuit was dropped without explanation.

Microsoft and Google team up to fight the GeoTag Patent Troll

Microsoft (MSFT) and Google (GOOG) have joined forces to defeat patent troll GeoTag, which has sued hundreds of companies for allegedly infringing its patent.

GeoTag claims that nearly 400 companies are using Bing maps and Google Maps – all based on its patented technology. According to GeoTag, its patent covers using mapping services to create store locators on websites.

According to GeoTag, its patented GeoTag geo-location technology is a spatial information management technology that makes possible a range of location-enabled online applications. GeoTag further claims that these online applications can use its technology to interactively and dynamically retrieve data from a database and associate retrieved data with a location.

GeoTag has been suing customers of Microsoft and Google including Boeing and Pizza Hut.

Microsoft and Google have joined forces and are going on the offensive. They asked a Texas court to rule that they have not infringed GeoTag's patent. They also asked the court to stop GeoTag from patent trolling and to order GeoTag to compensate Microsoft and Google for incurred costs. Microsoft and Google state that the patent concerned (U.S. Patent No. 5,930,474) is invalid for a number of reasons.

The patent was “invented” in the mid-1990s by Peter D. Dunworth, John W. Veenstra and Joan Nagelkirck. The patent was assigned to Z Land LLC. After unsuccessful attempts to commercialize the patent, the patent rights were assigned to Geomas Ltd.,an intellectual property holding company.

Around 2001, Jason W. Galanis, a U.S. entrepreneur, began investing in Geomas which apparently provided the capital to bring a patent infringement lawsuit in November 2006. In that lawsuit, Verizon Communications, Inc. (NYSE:VZ) and Idearc Information Services, Inc. were accused of infringement of the patent. Mr. Galanis arranged $20 million in institutional financing to support the lawsuit which was filed in the U.S. District Court for the Eastern District of Texas. That lawsuit was settled in December 2008; the terms of the settlement remain confidential.

The patent was then acquired by Ubixo Ltd. That company formed Ubixo, Inc. and assigned the patent and associated rights to it. In July 12, 2010, Ubixo, Inc. was spun off as an independent corporation and reincorporated in Delaware under the name GeoTag, Inc. GeoTag has therefore only held this one patent for two years, despite its claims that it makes a living licensing patents.

At this moment, GeoTag has been suing 423 companies for alleged patent infringement.

Let’s hope that the courts stop this kind of patent trolling soon.

(Image courtesy of Stu's Views )