Barnes & Noble Loses Bid to Dismiss Alcatel-Lucent Claims

Barnes & Noble Inc., the biggest U.S. bookstore chain, lost its bid for a federal judge to dismiss some claims it infringed Alcatel-Lucent patents related to Internet commerce.

Barnes & Noble, based in New York, sued Alcatel-Lucent in July 2010, seeking a ruling that it hasn’t infringed patents registered by the telecommunications company, which had warned of possible legal action. A federal jury in Texas has already ruled that some of the patents at issue weren’t infringed, Barnes & Noble said.

U.S. District Judge George Daniels yesterday at a hearing in Manhattan allowed two claims to remain in litigation. He dismissed one infringement claim because Alcatel-Lucent licensed the patent to Microsoft Corp., whose products Barnes & Noble uses on its website.

Of six patents in the initial filing, three were at issue yesterday. Two claims the judge allowed to remain included patents for technology related to checkout functions on e-commerce sites and the use of a search engine that, after the user types in a product search, returns results that don’t exactly match the specified product.

“They had their shot,” Gerard Haddad, a lawyer for Barnes & Noble, told the judge yesterday, referring to the Texas verdict. “They asserted the same elements against Barnes & Noble in the same way.”

Rejected Argument

Daniels yesterday rejected the company’s Texas ruling argument.

“It’s inappropriate for this court to try to decipher what issues” the Texas jury considered that may apply to this case, Daniels said.

During the hearing, he repeatedly asked the company’s lawyers how the verdict should affect his ruling.

“You say the jury by general verdict decided an issue that’s in this case,” Daniels said. “What is the evidence you want me to extrapolate? How am I supposed to determine what is the issue the jury decided to make them rule against the plaintiff?”

Alcatel-Lucent, based in Paris, said the infringement occurred on the retailer’s website, Alcatel-Lucent has appealed the Texas verdict to the Court of Appeals for the Federal Circuit. Oral arguments in that case may be heard in May, said Thomas Mahlum, a lawyer for Alcatel-Lucent.

Different Systems

Mahlum argued yesterday that the Texas verdict shouldn’t apply to the New York case.

“We’re talking about different systems,” Mahlum said. “The evidence is different and the functionality is different.”

Alcatel-Lucent sought a stay in the proceedings in New York until the appeals court rules. Daniels denied the stay.

“That’s not the way it works,” the judge said. Referring to the Texas verdict, he said, “Your claims continue to be invalid.”

Mahlum argued that the Microsoft license doesn’t apply to Barnes & Noble because the retailer wrote some computer application code to perform certain functions using Microsoft’s server and software.

“This is a limited license,” Mahlum said. “The license applies only if unmodified.”

No Evidence

Daniels noted that a witness said in a deposition that Barnes & Noble hadn’t modified Microsoft’s product.

“He said they took it out of the box and used it as is,” Daniels said. “You’ve put no other evidence before me to dispute that statement.”

Lucent Technologies merged with Alcatel in 2006. Lucent had been part of AT&T Corp. and the patents in question were developed at AT&T’s Bell Labs in the 1990s.

Barnes & Noble said in court papers that one of the patents is invalid because “the claimed invention was in public use or on sale in the United States more than one year prior to Dec. 30, 1992, the filing date of the patent.”

The case is Barnes & Noble Inc. v. Alcatel-Lucent USA Inc., 10-05759, U.S. District Court, Southern District of New York (Manhattan).

Before it's here, it's on the Bloomberg Terminal.