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Q: small software companies sued over patents; thorough answer please ( Answered 5 out of 5 stars,   3 Comments )
Subject: small software companies sued over patents; thorough answer please
Category: Miscellaneous
Asked by: bugbear-ga
List Price: $50.00
Posted: 10 Mar 2005 15:53 PST
Expires: 09 Apr 2005 16:53 PDT
Question ID: 492018
Have there been any examples of small software companies that
were sued for patent infringement by competitors?  I can't
think of any, which surprises me.

I've set a fairly high price on this because I want a thorough
answer, with all the examples you can find.  Please don't answer
it unless you're prepared to do that.

Request for Question Clarification by pafalafa-ga on 10 Mar 2005 17:28 PST
Not always clear what people mean by a "small company".   Is this the
sort of thing you have in mind....?


February 22, 2005
Forgent settles another patent infringement case

Forgent Networks Inc. has settled with Audiovox Electronics Corp. over
Forgent's patent infringement suit regarding its JPEG-related patent.

...Audiovox is the third among the original 44 clients in Forgent's lawsuit 

...Forgent develops and licenses intellectual property and provides
scheduling software.

Let me know what you think.


Request for Question Clarification by pafalafa-ga on 11 Mar 2005 09:23 PST
Here's another, by the by:

Subject: Re: small software companies sued over patents; thorough answer please
Answered By: pafalafa-ga on 12 Mar 2005 09:13 PST
Rated:5 out of 5 stars

Nice to see you here again, and thanks for a pretty interesting question.

It turns out that software patent infringement cases are a booming
business, both for law firms, and even for some companies that derive
the bulk of their income not from sales of products, but from suing
other companies for infringement of their software patents.

Suits against the big-boys tend to make the most news, but suing
mid-sized or smaller companies can actually be a better strategy for
some companies, since the target companies tend to have less resources
to fend off such suits.

Here are some of the key cases that have been noted in the general and
legal press.  I've provided links when available, but many of these
mentions are from legal databases not available via a weblink.

For the most part, they are "Goliath vs David" or even "David vs
David" sorts of cases, but I've also included a few cases of the
bigger companies getting sued as well, just to give you a more
complete picture of the landscape.

I trust this information fully answers your question.  However, please
don't rate this answer until you have everything you need.  If you
would like any additional information, just post a Request for
Clarification to let me know how I can assist you further, and I'm at
your service.



ePlus v Ariba

National Law Journal

February 21, 2005

Software providers settle suit for $37 million

...Procurement software and consulting services provider Ariba Inc.
has said that it has agreed to pay $37 million to settle a
patent-infringement suit...A federal jury found Ariba liable for
infringing three patents held by ePlus Inc., an enterprise cost
management software company. ePlus had originally claimed royalty
damages of $76 million to $98 million, and the trial judge had the
discretion to increase any actual damages award by up to three times.
ePlus had claimed that certain features in the Ariba Buyer, Ariba
Marketplace and Ariba Category Procurement software programs infringed
upon patents it holds...As part of the settlement, Ariba and ePlus
have entered into a broad cross-license agreement involving their
respective patent portfolios.

Here's a bit more on the Ariba-ePlus settlement:


Immersion v Sony/Microsoft

The Legal Intelligencer
September 24, 2004

Calif. Bar Stars Shine in Huge Patent Case Oakland, Calif., jury awarded $82 million to a San Jose, Calif.,
company, finding that Sony Computer Entertainment America Inc.
infringed two patents...Immersion Corp. sells hardware and software
technology that allows users to interact with digital devices, such as
computer joysticks and medical procedure simulators...In February
2002, the company filed suit against Sony and Microsoft Corp.,
alleging that the companies improperly used company technology in
their popular PlayStation 2 and Xbox gaming consoles.

"It's a fairly typical case of a small company suing a large company
and trying to get a lot of money," Powers said.

For Immersion, however, the decision was huge.

Chu said the verdict "is about four times" Immersion's annual revenue.
He said that under the Microsoft settlement, Immersion could garner
another $35 million.

Sony said in a statement that it would appeal the decision. "Patent
cases are highly technical and extremely difficult and too often
wrongly decided," Sony said.

Here's a bit more about the Immersion case:

Immersion Files Suit Against Microsoft and Sony Computer Entertainment
for Patent Infringement

Immersion's complaint, filed in the U.S. District Court for the
Northern District Court of California, alleges infringement by
Microsoft's and Sony's use of haptic technology in their popular video
gaming consoles, such as the Microsoft Xbox(TM) and Sony PlayStation®
and PlayStation®2 videogame systems, and associated controllers,
accessories and software games with touch feedback.



Broward Daily Business Review
September 15, 2004

...EMC claimed that HP infringed three computer software patents for
remote and local mirroring of digital data. The technology allows
computer data to be copied and stored on another computer in a remote
location as it's being created. EMC originally filed suit in
Massachusetts federal court in 2000 against StorageApps, a small
Bridgewater, N.J., company that sold mirroring software. HP became
lead defendant in the case after it bought StorageApps in mid-2001 and
continued selling the software.

Princeton University computer science professor Don Clark was the only
EMC witness whose testimony lasted more than 60 minutes. Clark spent
three hours detailing how HP's software infringed EMC's patents.


And a bit more on this one, too:,10801,93240,00.html
EMC wins storage patent dispute with HP 
Company to seek injunction to prevent HP from selling its CASA storage appliance 


Forgent v. Just about everybody
Acacia v. The Porn Industry
Other cases mentioned here as well

Legal Times
July 19, 2004

You Need a License;
Small companies are thinking big about royalties, sending waves of
lawsuits against larger adversaries

...Small companies, often with nothing to offer but their intellectual
property, are seemingly attacking whole industries with a volley of
letters and lawsuits. Brandishing their licensing demands, these
companies are marching into battle on multiple fronts...Consider the
example of Austin, Texas-based Forgent Networks Inc. and its counsel,
Jenkens & Gilchrist.

Since mid-2002, the company's licensing program has generated $90
million, says Michael Noonan, Forgent's head of investor relations. In
recent years, he says, licensing has represented 90 percent of the
company's revenue [Forgent also makes a software product].

Forgent sued those 31 companies in the Eastern District of Texas for
allegedly infringing on its patent for moving digital images over the

...While Forgent has big numbers...their licensing battles haven't
received as much attention as Acacia's. That's because Acacia has got
sex...The Newport Beach, Calif.-based company is locked in a legal
tussle with 17 online adult entertainment companies over its claim to
own the patent for sending compressed data over the Internet, or
streaming media. Last month, Acacia brought similar infringement
claims against several, more mainstream media companies, including the
Comcast Corp., Cox Communications Inc., DirecTV Group Inc., and the
Echostar Communications Corp....The 25-employee company, which also
licenses the V-chip technology that lets parents filter television
content, is well capitalized and can pay for its own lawyers without
splitting revenue, says Robert Berman, its general counsel.

Edward "Spike" Goldberg, who runs Home Grown Video, one of the
companies sued by Acacia, says that he's suspicious of Acacia's
decision to pursue a politically unpopular industry -- especially
small, online porn providers.

After all, Goldberg argues, "They have made broad, sweeping claims
that would make everybody in the world infringe on their patents."

Fighting the lawsuit is taking a toll on the group, says Goldberg. In
all, their combined revenue is roughly $10 million, he says, and some
of the larger companies have had to subsidize the smaller companies in
paying the litigation price tag, which has topped $1 million.

...Pinpoint Inc., based in Fort Worth, Texas, is another small IP
company whose primary product is patents. It's taking on Internet
heavy Inc. and the companies that sell products on Amazon's
Web site....The July 2003 suit, filed in the Northern District of
Illinois, alleges that Amazon and a handful of companies that sell
products on its site are infringing on Pinpoint's patent for making
personalized recommendations.


More on Forgent:

Forgent Announces Trial Date for Patent Infringement Case
Trial Scheduled for October 2005

[There's a long list here of all the companies -- large and small,
alike -- that are named in the lawsuit]


More on Acacia:

[You'll find a long list of companies being sued at this link]


USA Video v Movielink

Wednesday, February 2, 2005 
Movielink Wins Patent Infringement Lawsuit 

Santa Monica-based Movielink announced that it has prevailed in a
patent infringement lawsuit filed against it by USA Video Technology


BroadVision v Art Technology

The National Law Journal
May 8, 2000

Protecting software

SOFTWARE PATENTS are receiving intense media attention due in part to
the enormous value attributed to some of them. For example,
BroadVision Inc. received $ 15 million from rival Art Technology Group
to settle a patent infringement case involving U.S. Patent No.
5,710,887, which involves a method of boosting online sales,


More on the Broadvision/Art Tech case here:

They'd Rather License Than Fight


First Graphics Inc. v. M.E.P. Cad

E-Commerce Law & Strategy
September 2002
Practice Strategy  Prefiling Investigations In Patent Litigation:
Heeding the Requirements of Rule 11

A decision handed down in August by a federal district court in
Illinois extends the Federal Circuit's holding in Hoffmann-La Roche to
the particular difficulties that a software patentee may have
assessing infringement by competitors before filing suit. In First
Graphics Inc. v. M.E.P. Cad Inc...the patentee lost an infringement
claim based on a patent that in part covered computer-automated fire
sprinkler systems...The court denied the sanctions, noting that the
defendant refused to provide a fully functioning copy of its software
prior to discovery, and that the plaintiff could not have been
expected to buy a copy of the $ 6,000 software. Despite the fact that
summary judgment ultimately was granted against the patentee, the
court found the plaintiff's prefiling investigation to be reasonable
under the circumstances.


Electronics for Imaging vs everbody 

National Law Journal
August 26, 2002

Ivory towers fire back over patents
More schools are suing businesses.

...the Massachusetts Institute of Technology and Electronics for
Imaging Inc. are suing more than 100 corporations, charging
infringement of a patent for color-image editing software


The MIT/EFI cases involve scores of companies, large and small.  You
can see one of the actual suits here:




New York Law Journal
December 29, 2003

Decision of Interest;
Action Transferred to Maryland, Where Design Sale of Allegedly
Infringing Product Took Place

...Millennium is a limited partnership organized and existing under
the laws of the Cayman Islands...Millennium is the owner of U.S.
patents, covering information processing methods and systems.

Dakota is a Maryland corporation... Dakota develops and customizes
automated data capture and processing systems.

Millennium claims that Dakota sells software products that infringe
their patents to customers throughout the United States.

Dakota writes, programs, tests, and markets its software products in
Columbia, Maryland. Eighty percent of Dakota's employees - seventy-six
employees - work and reside in Maryland. These include Dakota's
software engineers, development engineers, customer service
representative, and professional services personnel. Dakota has small
satellite offices in Atlanta, Georgia and Dallas, Texas, employing
approximately twenty individuals combined. Dakota also employs four
employees as project managers and sales representatives working from
their homes in Colorado, Arizona, Massachusetts and Florida. Dakota
does not have any employees located in the Southern District of New

Dakota further has business relations with Kodak and IBM, two
multi-national companies. Dakota purchases hardware manufactured by
Kodak and IBM from licensed distributors located in Ohio and Maryland
and then resells the hardware from its offices in Columbia.


TechSearch v Aharonian

The Recorder
October 31, 2000


Greg Aharonian spends his days poring over patents and pounding out a
newsletter for IP aficionados....An outspoken critic of the patent
system, Aharonian regularly blasts software patents that he views as
overly broad. One such patent holder has struck back...TechSearch -- a
Chicago-based company that obtains ownership of patents and then seeks
to enforce them -- filed a patent infringement suit against Aharonian
in July. The company claims he is infringing its so-called "remote
query communication system" patent, which covers a method for
compressing and decompressing data transmitted from a server to an end

Aharonian had said the patent is so broad that anyone with a Web
server could be sued for infringement.

"That's probably not incorrect," said TechSearch founder and president
Anthony Brown.


Eolas Technologies v Microsoft

The Recorder
August 27, 2003

For this pair, $520 million in vindication;
Patent lawyers watched as their work survived Microsoft's scrutiny

...the seemingly innocuous patent had become the centerpiece of an
expensive scuffle pitting the University of California and its
exclusive patent licensee Eolas Technologies Inc. against Microsoft
Corp. And for Kulas and Krueger, it was a test of how well they had
done their work..."I was sitting on pins and needles," Kulas said. "It
was frightening. Now it is exhilarating. Most people go through their
whole careers without having a patent litigated to this level."
...Their work was vindicated two weeks ago when a federal jury in
Chicago found that Microsoft had infringed the patent and ordered the
software giant to pay UC and Eolas $520.6 million in damages.


EMC v Triangle

October 23, 2002 
EMC Wins Permanent Injunction Ruling 

A judge of the U.S. District Court for the Middle District of North
Carolina issued a permanent injunction against Triangle for using
EMC's maintenance software, training materials, engineering documents
and other EMC intellectual property without EMC's consent.

More on the EMC/Triangle case here:,289142,sid5_gci859375,00.html
EMC's court victory threatens reseller

EMC has scored a patent victory that is likely to put a storage
reseller out of business. The ruling prohibits the reseller from
monitoring, selling or servicing EMC hardware and software products.


Again, just let me know if there's anything else I can do for you.


search strategy:  Searched Google and legal databases for [ software
patent infringement small ]
bugbear-ga rated this answer:5 out of 5 stars and gave an additional tip of: $10.00
great work

Subject: Re: small software companies sued over patents; thorough answer please
From: omnivorous-ga on 11 Mar 2005 09:34 PST
Bugbear --

A second problem (beyond the mere definition of size) that you have is
that small companies are more-often private firms, meaning that they
have no public disclosure requirements if they sue, license or settle
a patent issue.

Best regards,

Subject: Re: small software companies sued over patents; thorough answer please
From: anotherbrian-ga on 11 Mar 2005 23:08 PST
This might intrest you:
Subject: Re: small software companies sued over patents; thorough answer please
From: pafalafa-ga on 26 Mar 2005 12:42 PST
Thank you kindly, for the stars and everything else.  Much appreciated.


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