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Paul Allen's puzzling patent lawsuit

The Microsoft billionaire has people scratching their heads about why he launched such a high-profile legal attack on the online community.

September 25, 2010|Michael Hiltzik

Over the years, Paul Allen has been praised and cursed in his multiple roles as Microsoft billionaire, pro sports magnate, cable boss and philanthropist.

But no one ever called him a "patent troll." Until now.

Maybe that's unfair. The garden-variety patent troll is a company that buys up patents developed by others, then files lawsuits claiming that established companies have infringed the rights of its new portfolio.

By contrast, there's no disputing that the four patents at the heart of the infringement lawsuit Allen, 57, filed last month against 11 Internet and e-commerce companies had been developed in his shop — the legendary Silicon Valley incubator Interval Research, which he personally funded to the tune of a reported $200 million from 1992 to 2002.

The patents cover some online features that are today so deeply embedded in so many websites that many people have trouble imagining that they weren't part of the Web from birth (they weren't, of course). For instance, they include features fundamental to news aggregator sites, which bring snippets of news reports from a variety of sources together on a single page at the user's specification.

Perhaps it's better to say that Allen isn't a patent troll, but on this occasion has dressed up as one.

"This is a patent troll-style lawsuit," Mark A. Lemley, a patent law expert at Stanford law school, told me. And it is likely to have the same effect as conventional patent troll lawsuits: It will cost the defendants millions.

"They'll certainly have to litigate for a while," Lemley said, predicting that it will take a year and a half of lawyer fees even to get to the point where the defendants can ask a court to throw the case out.

Given that aspect of things, and Interval Research's history, the lawsuit has people in Silicon Valley asking two questions: What's gotten into Paul Allen? And how did these patents ever get issued, anyway?

The first question is of lively interest because of who Paul Allen is.

The co-founder of Microsoft, he's been a prominent, if slightly mysterious, figure in the high-tech world and in the Seattle civic community ever since. He's made numerous prominent investments, including a founding stake in DreamWorks, with a fortune currently estimated at about $13 billion.

In the Pacific Northwest, he's known as the owner of the NFL Seahawks, the NBA Trail Blazers, the cable operator Charter Communications and Seattle's Experience Music Project, perhaps best known for its trove of Jimi Hendrix memorabilia.

But his fortune was made in tech, and that has people scratching their heads about why he launched such a high-profile legal attack on the online community. The roster of defendants is a list that manages to be both oddly specific and oddly random.

They include AOL, Apple, Facebook, Yahoo and Google, but not Microsoft. Also on the list are Office Depot, Office Max and Staples, but none of the thousands of other companies that maintain e-commerce websites that operate in very similar if not identical ways.

The 15-page legal complaint filed in Seattle federal court doesn't explain these choices. Its bare-bones character inspired, unsurprisingly, an outbreak of pop psychologizing of the generally uncommunicative Allen.

The lawsuit is all about "building his legacy," a Seattle Times columnist concluded, noting that Allen recently faced down a cancer threat and has pledged to give most of his fortune to charity, making it unlikely that money is the object.

Here's my entry in the Put-Paul-Allen-on-the-Couch sweepstakes: The lawsuit is more about Interval Research's legacy.

Interval hasn't been mentioned much over the last few years. But while it existed it was the talk of Silicon Valley. To run it Allen hired David Liddle, who had been one of the computer science and engineering pioneers at Xerox's Palo Alto Research Center, the fabled PARC.

Liddle assembled an impressively eclectic group — not only the most creative computer scientists and engineers, but artists, writers, videographers, game designers, social theorists. It was evident that they were working on some projects well ahead of the leading edge. But it wasn't entirely clear how far ahead, because the projects were conducted behind a veil of secrecy that was lifted only rarely, as when a writer for Wired magazine was granted a tantalizing look inside in 1999. Allen finally got tired of waiting for Interval's research to generate revenue — a familiar issue in Silicon Valley — and after his attention shifted to industries such as cable, he shut it down.

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