We have
discussed the
Eastern District of Texas’s reputation as a haven for patent trolls.
Patent holders suing for infringement check in at a 78 percent success
rate in the Eastern District of Texas, far higher than any other region
in the country.
However, even in the most patent-friendly districts reason prevails
every once in awhile. In a rare defendant’s victory in the Eastern
District of Texas, Google successfully defended themselves against
plaintiff and patent holder, Function Media, last Tuesday. Though the
story was only picked up by the local newspaper,
The Marshall News Messenger, it deserves additional mention.
Function Media asked the jury for $600 million in damages. The dispute
was over three patents—which we’ll kindly label as “broad” - pertaining
to customization of web ads. The patents in this suit particularly
targeted Google’s AdSense and AdWords technologies, as well as general
means for providing media advertisement. Ultimately, the jury focused
on only two of the patents that were in dispute.
Ed Sperling at EDN
was all over this back
when the lawsuit was first initiated in July 2007. His research found
that Function Media’s legitimacy was questionable at best:
“How can two
people with absolutely no searchable past, working for a company that
has no history, obtain three separate patents and challenge Google and
Yahoo? […] From an Internet history standpoint, Dean, Stone and
Function Media appear to be ghosts. There is no trace of them except at
the U.S. Patent Office.”
Sure enough, a simple web search of Function Media produces the EDN article,
the actual court case, and little else.
A victory for Function Media would
have made one more example of the Eastern District of Texas enabling
non-producing entities to take advantage of the broken patent system. Yet,
in a departure from the trend seen over the past few years, jurors in
Marshall, Texas, refused to side with the patent holder. Despite the
argument by Function Media’s attorneys likening the patent infringement
in this case to someone drilling for oil on someone else’s personal
property, the jury ultimately held that the patents here, spanning nine
claims total, were anticipated by the prior art and obvious. This
holding may inhibit Function Media from asserting these same patents
against other new defendants.
Anecdote isn’t data, so one isolated
case of a defendant coming out on top in this hostile district is not
necessarily evidence of a permanent trend. Still, it is encouraging to
see reason prevail.
