Paul Allen’s Suit Should Stay on Hold, Apple and Google Say

Paul G. Allen’s claims that 11 companies including Google Inc. (GOOG) and Apple Inc. (AAPL) infringed his business’s online-shopping technology should remain on hold while the U.S. government reviews the quality of its patents, the defendants said in a court filing.

U.S. District Judge Marsha Pechman in Seattle ordered on June 16 that the U.S. Patent and Trademark Office be given time to evaluate whether the four patents cover novel inventions, a decision that Allen’s Interval Licensing LLC has asked to be reconsidered. The defendants, which also include EBay Inc. (EBAY), Facebook Inc. and Netflix Inc. (NFLX), said yesterday that the judge’s decision “was correct and based on a reasoned analysis.”

In granting the request to put the case on hold, the judge, who has yet to rule on Interval’s request, said the agency review could “reshape” the patents. The patents, which mainly cover common electronic-commerce applications for displaying and categorizing product information, were obtained from a defunct computer-science and communications research business Microsoft co-founder Allen and David Liddle formed in 1992.

Allen, 58, controls Seattle-based Interval, a patent- licensing company that is seeking unspecified cash compensation and a court order to block further use of the inventions. The other six companies named in the lawsuit, filed in August, are AOL Inc., Office Depot Inc. (ODP), OfficeMax Inc. (OMX), Staples Inc. (SPLS), Yahoo! Inc. and Google Inc.’s YouTube.

Pechman said that since Interval doesn’t compete with the companies, it won’t lose any market share from the delay.

The companies in March had asked the patent office to take a second look at the patents and then asked the court to put the case on hold until that review could be completed. Interval said the case had progressed while awaiting the judge’s decision and in a June 24 filing called the delay “unproductive.” The patent office has rejected some of the arguments the companies put forth, Interval said.

The companies said people hired to analyze the case “could simply pick up where they left off” if the patent office upholds the patents in their current form, so no work would be lost.

Interval Licensing owns the patents from Interval Research, a computer-science and communications researcher that Allen shut in 2000. Interval Research helped fund outside projects, including work by Google founders Sergey Brin and Lawrence Page, according to a statement announcing the suit. Allen has maintained ownership of the patents through companies he controls.

The lead case is Interval Licensing LLC v. AOL Inc. (AOL), 10cv1385, U.S. District Court for the Western District of Washington (Seattle).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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