Connecticut Business Litigation Blog : Connecticut Business Lawyer & Attorney : N. Kane Bennett : Raymond & Bennett Law Firm : Hartford, Middletown, Glastonbury

Is it David v. Goliath or a patent troll case?  Connecticut based XPRT Ventures, LLC has filed a lawsuit in the U.S. District Court in Delaware (download lawsuit here) against eBay for $3.8 billion dollars over the technology for automating and securing online payment portals. The suit was also filed against eBay's PayPal, Bill Me Later, Shopping.com, and StubHub.

In the suit, XPRT alleges that PayPal and others have used its systems and methods for electronic auction and e-commerce transactions subject to XPRT's six U.S. patents since at least 2002.  XPRT also alleges that eBay received confidential information in 2001 from the inventors and misappropriated information from patent applications assigned to XPRT. XPRT alleges a loss to date of $600 million with expected future losses of $3.2 billion.

The suit is for willful patent infringement, but at its heart is XPRT's allegation that eBay stole XPRT's trade secrets obtained from patent applications to use in eBay's own patent applications and for use by eBay in multiple platforms for PayPal and others.  The complaint states that XPRT passed on confidential information related to its patents to eBay in 2001 with the expectation of compensation should eBay be interested in the technology. The complaint alleges that the confidential information included how eBay could benefit from acquiring PayPal's payment platform.  Instead, eBay allegedly used the information provided in support of its own patent applications and online uses for PayPal and others.

The suit has been summarized and covered by various online media with some support and others criticizing the suit. Read here for the Reuters report on eBay suit and PCWorld's story.  Another good summary is the post today from Rajeev Saxena of Trends Updates. The post includes the following statement from XPRT's Connecticut based counsel, Steven Moore: 

This involves a trade secret theft, along with sheer patent infringement.  It is bad enough to take someone's technology, but it is a bit much to use it in your own patent application. 

Attorney Moore's firm also issued a press release that states, in part:

 In a nutshell, XPRT asserts eBay unfairly stole the idea and method of payment used in eBay's PayPal and similar electronic payment systems.

Techdirt, a technology blog, came out swinging and criticized the suit as "another patent lawsuit against a big company for doing something obvious, filed by a company that appears to exist solely for the purpose of suing a company that actually does stuff."   Mike also includes in his post some additional details about the history of XPRT's trail of patent rejections.  His take is basically that the case is a patent troll stick up suit.    For a good and balanced definition of "troll patent" or "patent troll" read this post form PatentlyO, the nations leading patent law blog.

Erik Sherman, a freelance writer, had a somewhat different take in his blog post.  After a providing a detailed summary of his own investigation and fact finding, Erik wrote that "this is not a simple case of a troll finding an obscure patent that could be stretched to cover an intended target."  He also focused on another case where eBay was alleged to have engaged in similar unethical behavior and the complications potentially created for Meg Whitman (eBay CEO at the time) currently running for California governor.

Thus far, eBay only issued a short statement denying that there is any merit to the suit. What's your take, Patent Trolling or David v. Goliath?

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• Ashby Jones of Wall Street Journal blog writes an intriguing post about the Google and Viacom lawsuit concerning Viacom's claims of copyright infringement against YouTube (Google subsidiary).  The post recites how Viacom employees were uploading copyrighted copies of their own videos to YouTube to help prove that YouTube was not promptly removing videos that infringe copyrights.  At stake: immunity under the Digital Millennium Copyright Act.  Google says its protected from suit under the Act because YouTube removes content upon request of a copyright holder.  Viacom says otherwise and points to some of its own videos that were not removed.  I do not know the particulars of the lawsuit, but if Viacom hopes to prevail, you would expect that they have more to proceed on than there own employee videos.
• PatentlyO, the nations leading patent law blog, has a humorous post indicating Starbucks may soon be subject to a false marketing claim if it keeps a patent number on its corrugated cardboard cups for much longer.  Professor Dennis Crouch looked up the patent  on the cup and its set to expire in a month.  Maybe Starbucks will settle out of court like the coffee house did with Kramer on Seinfeld for lifetime free coffee!  (if you are wondering, this happened in the Maestro episode)   
• Brendon Tavelli of The Privacy Law Blog writes about the Federal Trade Commissions settlement against LifeLock,Inc. for misrepresentation concerning its identity theft services and protections.  35 states joined in the settlement.  According the the settlement, LifeLock was not providing the comprehensive identify theft coverage it advertised.  Any consumer considering identify theft should do a very detailed investigation of the company and its services.  I wrote a post recently about data loss and noted that many victims are offered identity theft protection as part of the settlement.  Many times, the protection is not adequate. 
• Victoria Pynchon's Settle It Now Blog has a compelling post about her project to teach women to negotiate better in retail, relationships, employment, and the law.  I recently discovered this popular blog and now I am a regular reader.  Great insights, not only for women (although she says so a few times).
• John Buford of the North Carolina Business Litigation Report has a post about a business valuation case involving a closely held business.  At issue in the case was determining a value of an unproven technology.  The problem was setting a fair price to avoid a windfall for either side.  Although it is a North Carolina case, the concepts of valuing intellectual property, especially unproven technology, is more of a function of the science of appraisals than state law.  Some useful concepts are discussed including the appraiser's methodology that the court accepted.
• Mashable, a top 100 blog, discusses Twitter's birthday only 4 years ago.  Twitter hit 50 million tweets per day last month. Mashable is a great blog that has just about everything there is to do with social media and web 2.0.
• For more on social media: Nicole Black's Sui Generis - a New York Law Blog - discusses Nicole's new book, "Social Media for Lawyers: The Next Frontier."  The book is co-authored by Carolyn Elefant, who publishes the blog MyShingle.com an excellent resource for solos and small firm lawyers.  
•  Megan Erickson's Social Networking Blog also details the Classmates.com settlement.  I guess  I was not the only one getting those annoying emails claiming my classmates were looking for me. 
• Cannot do a business blog round up without mentioning the ScotusBlog and its post on Anna Nicole Smith's estate losing her long disputed claim for millions from her tycoon husband J. Howard Marshall.  The Post includes the decision and a summary story.  

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