In a fresh salvo in the ongoing patent wars, Google launched infringement actions against British Telecom (BT) in California and the United Kingdom (UK) on Wednesday. The suits appear to be in retaliation to a number of claims against Google, including a suit brought against Google in U.S. federal court in Delaware in late 2011. The ongoing Delaware suit claims that some 22 different Google products, including the Android operating system, infringed seven BT patents filed between April 1995 and October 2000.
In addition, BT appears to be connected to a number of “privateer” actions against Google’s ecosystem. In a Virginia case brought against Google and AOL by an entity called Suffolk Technologies, the patents at issue address displaying search snippets and advertisements, and were acquired from BT. In a Delaware case previously noted here on Patent Progress, an LLC called Steelhead Licensing sued over a dozen companies in the wireless space, including Motorola. (BT denied involvement in the latter case, although the patent asserted was a BT patent.)
As discussed here previously, privateers are mercenary litigants, entities contractually bound to make patent war, and generally promised a share of the spoils. The lawsuit-for-hire model satisfies the twin objectives of monetizing vague patent portfolios and slowing down competitors with legal headaches.
The privateerA patent assertion entity (PAE) used indirectly by a producing entity to assert patents against rivals. The privateer is better positioned to damage the rival because it is not vulnerable to counterassertions (as a non-producing entity it cannot be liable for patent infringement) and need not be concerned with adverse publicity. The producing company may spin off the privateer, sell model permits the original patent owner to outsource the costs of litigation and share in the rewards of the suit. In the Suffolk action, for example, a Virginia federal court concluded that Suffolk is actually owned by a group including Goldman Sachs, General Atlantic Partners LP and the Boston Consulting Group. In this sense, patent litigation represents an investment vehicle in itself, as Suffolk will kick back a share of the proceeds to BT.
At least in some cases, this also mitigates exposure to direct counterclaims from the defendant, who might seek injunctions against a business with products. By ‘laundering’ the litigation through a third party, this risk is minimized. Because a privateerA patent assertion entity (PAE) used indirectly by a producing entity to assert patents against rivals. The privateer is better positioned to damage the rival because it is not vulnerable to counterassertions (as a non-producing entity it cannot be liable for patent infringement) and need not be concerned with adverse publicity. The producing company may spin off the privateer, sell produces nothing except litigation, however, it has no products to enjoin, meaning that the privateerA patent assertion entity (PAE) used indirectly by a producing entity to assert patents against rivals. The privateer is better positioned to damage the rival because it is not vulnerable to counterassertions (as a non-producing entity it cannot be liable for patent infringement) and need not be concerned with adverse publicity. The producing company may spin off the privateer, sell model is a successful means for waging asymmetric warfare (hence the name).
Nothing prevents a defendant from launching independent litigation, however, and this is what Google has done. Suing BT Americas in California and BT itself in the UK, the search company claims infringement of four patents pertaining to network operations.
(BT’s more recent litigation initiatives are not the company’s first venture into high profile patent warfare – in 2000 the company claimed a U.S. patent, No. 4,873,662, governed the act of hyperlinking to another website, and launched an unsuccessful litigation campaign against online service providers.)