Facebook Wins Infringement Trial as Jury Finds Leader Patent Is Invalid

Facebook Inc., owner of the world’s most popular social-networking site, won a patent case brought by Leader Technologies Inc. when a jury held the competitor’s patent invalid.

Leader sued Palo Alto, California-based Facebook in Wilmington, Delaware, in 2008 seeking royalties and an order to stop the alleged infringement. The trial began July 19.

“We thank the jury for listening carefully to all the facts,” Facebook general counsel Ted Ullyot said in a statement. “From the day this lawsuit was filed, we said the patent was invalid.”

Paul J. Andre, a lawyer for Westerville, Ohio-based Leader, said he’s confident the ruling “will not stand” in further litigation.

The patent, for managing electronically stored data, was awarded to inventors Michael McKibben and Jeffrey R. Lamb in 2006.

Leader was founded by McKibben in 1997. It develops Internet-based systems to help businesses manage e-mail, voice mail, teleconferencing and video data, according to the company’s website.

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

Patent Claims Infringed

In its decision, the jury also ruled that Facebook’s technology did infringe claims of the patent. Under U.S. patent law, an invalid patent cannot be infringed.

“All these cases end up on appeal,” said Alexander Poltorak, chief executive officer of patent-licensing firm General Patent Corp. of Suffern, New York, who’s been following the case and said he has no dealings with the two litigants.

The invalidity ruling was based on the jury’s determination that Leader failed to file its patent application within a year of offering the invention for sale, as required by law.

Poltorak said such a finding “is very difficult to reverse on appeal. There’s no way to overcome it.”

The trial was supervised by U.S. Magistrate Judge Leonard Stark.

The case is Leader Technologies Inc. v. Facebook Inc., 08- cv-862, 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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