Paul Allen Versus the World

While Scott Pilgrim vs. the World is a popular comedy currently playing in theaters, the teaser-trailer for the upcoming real life legal drama, Paul Allen vs. the World, was previewed last week. Paul Allen, for those that may not recognize the name, was a co-founder of Microsoft with Bill Gates and, although he left in the 1980s, is still a major shareholder in the company. He recently instituted legal action against eleven of the most well-known technology companies. Allen's complaint, filed in federal court in Seattle on Friday August 27th, 2010, alleges that AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo!, and YouTube all infringe upon patents currently owned by Allen that were created by his think-tank company, Interval Research Corporation, in the late 1990s. Greatly simplified, these patents cover technology used when a website automatically lists related items or stories of interest to the main topic or item. They are commonly utilized by e-commerce companies. However, not all eleven companies are alleged to infringe all four patents listed in the complaint. See Chart.

Patents each individual defendant allegedly infringed.

Patent NumberAOLAppleeBayFacebookGoogleNetflixOffice DepotOfficeMaxStaplesYahoo!YouTube
6,263,507XXX XXXXXXX
6,034,652XX X X
6,788,314XX X X

Patent litigation, while costly, has the potential to result in a big payout, and the legal waters seem just right for this type of action. It is unclear whether these patents would have held up to litigation under the State Street Bank analysis of "useful, concrete and tangible" which was in place when they were issued. Or if they would have satisfied the Federal Circuit's Bilski machine-or-transformation test. However, with the U.S. Supreme Court's recent Bilski holding, though showing clear hostility towards some process claims, the door was opened for any reasonable test or analysis to be used. Perhaps this analytical latitude will benefit Allen in litigation.

Since this technology is so prevalent in today's Internet world, if Allen successfully litigates this suit, other companies may soon find themselves in his crosshairs. However with a potential outcome that would stifle innovation, it is likely the only people that would want Allen to succeed are the charitable organizations he has pledged the majority of this $13.5 billion dollar fortune to upon his death.