Attorneys Approve Oracles Patent-Troll Wrangling

 
 
By Lisa Vaas  |  Posted 2006-07-12
 
 
 
Patent attorneys are applauding Oracles proactive pounce on EpicRealm, a company many consider to be acting like a patent troll.

"Rather than sit back and wait to be sued, or watch as EpicRealm lines its litigation coffers by extracting settlements from smaller companies, Oracle is going on the offensive to protect its business," said Bobbie Wilson, an intellectual property litigation attorney and a partner with the San Francisco law firm Howard Rice Nemerovski Canady Falk & Rabkin, the law firm that defended

Oracle on June 30 filed suit to invalidate EpicRealms patent claims for the delivery of dynamic Web pages—patent claims that EpicRealm has used as the basis to sue a dozen small companies, including eHarmony, FriendFinder and Safelite Group, in the past year.

When EpicRealm picked on Safelite Group, it caught the attention of Oracle, a much bigger target—one with a bigger wallet and more at stake.

Safelite, an Oracle e-Business Suite customer, looked to Oracle to indemnify it against EpicRealms claims, as guaranteed in Oracles licensing agreement. The grounds for doing so were that Oracles e-Business Suite is used in conjunction with the delivery of dynamic Web pages and thus was subject to EpicRealms claims of patent infringement.

Safelite settled with EpicRealm in June, with both Oracle and IBM kicking in undisclosed sums toward the settlement.

Now, Oracle is claiming that EpicRealm is poised to come after both it and its customers with patent claims, and the database behemoth is seeking to cut that action off at the knees.

"EpicRealms patent infringement allegations … cause Oracle to have a reasonable apprehension that 1) EpicRealm will accuse Oracle, Oracles products and/or Oracles customers of infringing one or more claims of the EpicRealm patents, and/or 2) additional Oracle customers will sue Oracle for indemnity as a result of EpicRealms patent infringement claims," Oracle wrote in its complaint against EpicRealm, filed in the U.S. District Court in Delaware.

Click here to read more about Oracles new content management approach.

Wilson said that if EpicRealms patents are valid, the company has a right to exclude others from practicing them, but that this is a risky strategy.

"They have now put the patents into play and a jury could find that they are invalid," she wrote in an e-mail exchange. "EpicRealm will file counterclaims for infringement and likely request an injunction. However, after eBay v. MercExchange, it may not be very easy for EpicRealm to get an injunction or use the threat of injunction as a hammer (unlike in the NTP v. RIM [case]) to compel a large settlement."

Injunctions are critical in technology patent cases because when youre talking about a broad, general technology, an injunction can shut down a significant portion of a companys business. "NTPs knowing that [in its case against RIM] it would [almost surely] get an injunction, it used that as a hammer to get more than it would have otherwise," Wilson said in an interview with eWEEK.

Oracles strategy makes sense in that if a technology vendors customer is being sued, theres a pretty good chance the vendor itself will be sued, Wilson said.

"EpicRealm is not what one would consider a traditional troll in that they may have actually practiced the useful art at one point, but do not any longer," Wilson wrote.

But, she told eWEEK, trolls or companies that engage in troll-like behavior can create havoc in an industry.

What can be done to stop patent trolls? Click here to read more.

"These trolls, they usually start with little guys," she said. "They get a bunch of guys to settle. That gives them a war chest [of funds], and they use that to go after bigger fish, because they have more money to take them on.

"What it does [is], other people say, I dont want to get involved in litigation, so they take a license or they sit it out" and watch to see what will happen when big companies wrangle with the trolls, she said.

"In the RIM case, companies did take a license from NTP while the suit was going on," she said. "Others sat back and said Well see what happens. It creates disruption in the marketplace."

Oracle could squash the disruption if it manages to invalidate EpicRealms patents in court. But this all assumes that the court wont dismiss Oracles case out of hand, Wilson said. After all, EpicRealm hasnt sued or threatened to sue Oracle, and its likely to argue that it wont.

"A court might agree," Wilson said.

Still, Oracles proactive litigation might well serve to protect customers from patent trolling, according to Bradford P. Lyerla, intellectual property attorney and partner with Marshall Gerstein & Borun LLP, a Chicago-based IP specialty law firm.

"Oracle has brought its suit to try to wrest the litigation advantage from the grip of epicRealm, who Oracle plainly regards as nothing more than a patent troll," he said in an e-mail exchange. "By taking the fight to epicRealm directly, Oracle may succeed in protecting its customers from repeated litigation with epicRealm wherein the customers are accused of infringement based on their use of Oracles products."

Pre-emptive actions like Oracles are indicative of a turning tide in the tech industry, Lyerla said, and bode well for customers—at least, for those protected by indemnification clauses. "More and more, manufacturers who often have the obligation to indemnify their customers are attacking the patents in declaratory judgment lawsuits before the patents can be asserted against their customers. Its a good strategy for the manufacturer in many cases," he said.

Editors Note: This story was updated to include comments from Marshall Gerstein & Boruns Lyerla.

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