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Facebook Begins Patent-Infringement Trial Over Leader Technologies Lawsuit

A lawyer for Facebook Inc., the world’s most popular social-networking site, told jurors in a patent-infringement trial that the company didn’t misappropriate data-processing technology owned by Leader Technologies Inc.

Leader, based in Westerville, Ohio, sued in federal court in Wilmington, Delaware, in 2008, seeking royalties and an order to stop Palo Alto, California-based Facebook from infringing the company’s first patent. The trial opened today.

The patent, for managing electronically stored data, was issued in 2006 to inventors Michael McKibben and Jeffrey R. Lamb. Closely held Facebook contends the patent isn’t valid because the technology isn’t new.

“We believe Facebook does not infringe the patent” and it doesn’t cover social networking, Facebook lawyer Michael Rhodes told jurors.

Leader was founded by McKibben in 1997 and develops Internet-based systems to help businesses manage e-mail, voice mail, teleconferencing and video data, according to the company’s website. It also says it provides government communications services during major emergencies, including natural disasters.

The invention was “the culmination of years and years of hard work,” said Paul Andre, a lawyer for Leader, in his initial presentation to jurors.

Facebook was started in 2004 by Harvard University undergraduate Mark Zuckerberg. It reportedly had 2009 revenue of more than $700 million.

The trial, supervised by U.S. Magistrate Judge Leonard Stark, is scheduled to last as long as two weeks.

The case is Leader Technologies Inc. v. Facebook Inc., 08CV862, U.S. District Court, District of Delaware (Wilmington).

To see the patent: 7,139,761.

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

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