Paul Allen's firm sues Silicon Valley giants

SAN FRANCISCO Sat Aug 28, 2010 12:27am BST

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SAN FRANCISCO (Reuters) - A company linked to Microsoft Corp (MSFT.O) co-founder Paul Allen is suing 11 major corporations, including Apple (AAPL.O), Google (GOOG.O) and Facebook, accusing them of infringing on technology patents.

Interval Licensing is asserting four patents against a cluster of defendants, including also AOL (AOL.N), eBay (EBAY.O), Facebook, Netflix (NFLX.O), Office Depot ODP.N, OfficeMax OMX.N, Staples (SPLS.O), Yahoo (YHOO.O) and Google's YouTube, according to the suit.

Google, Facebook and eBay said they will fight the accusations by Interval, which owns a portfolio of technology patents but does not manufacture. Apple, AOL, Office Depot, Netflix and OfficeMax declined to comment. The remaining companies did not respond to requests for comment.

Experts say companies that lack production but utilize old patents to make broad infringement claims tend to raise red flags. But the lawsuit points out Allen's deep history with Google, including early funding of founders Sergey Brin and Larry Page, a likely attempt to distinguish this lawsuit from other opportunistic patent litigation, Stanford professor and IP litigator Mark Lemley said.

"It's usually an indication either that the patents are invalid, or they're overclaiming them," said Lemley, whose law firm represents Google and Netflix in unrelated matters.

"Part of what's going on here is the plaintiffs are going out of their way to say, 'Hey, look, we're really important people. We're real innovators."

Allen, the 37th-richest person in the world according to Forbes, co-founded Interval Research in 1992 to develop communications and computer technology. The company, which employed more than 110 scientists and engineers at one point, filed patents over several years covering Internet search and display innovations, according to the lawsuit.

Interval Licensing now owns those patents.

RED FLAGS

Allen, who has been treated for non-Hodgkin's lymphoma, in July pledged most of his estimated $13.5 billion (8.6 billion pound) fortune to philanthropy after his death. He co-founded Microsoft in 1975 with Bill Gates but resigned as an executive in 1983 as he overcame a first bout with cancer.

In the suit filed in the U.S. District Court for the Western District of Washington, Interval is seeking damages and a halt to the alleged violations of patents it said were fundamental to e-commerce and search.

"This lawsuit against some of America's most innovative companies reflects an unfortunate trend of people trying to compete in the courtroom instead of the marketplace," a Google spokesman said in an emailed statement.

"Innovation -- not litigation -- is the way to bring to market the kinds of products and services that benefit millions of people around the world."

Interval spokesman David Postman said the lawsuit was necessary to protect its investment in innovation.

"We are not asserting patents that other companies have filed, nor are we buying patents originally assigned to someone else," Postman said. "These are patents developed by and for Interval."

Facebook spokesman Andrew Noyes said: "We believe this suit is completely without merit and we will fight it vigorously."

(Reporting by Dan Levine, Alexandria Sage, Alex Dobuzinskis and Lisa Baertlein; Editing by Gary Hill and Matthew Lewis; editing by Eric Walsh)

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