Facebook, and its “Like” button, seem to be ubiquitous.
Well, last week, Facebook and social bookmarking service, AddThis, were sued in the Eastern District of Virginia for willful infringement of two patents, U.S. Patent Nos. 6,415,316 and 6,289,362. These patents were filed by a Norwegian computer programmer, Joannes Jozef Everardus Van Der Meer, in the late 1990s. The ’316 patent is directed to enabling a user to create a “personal diary,” which the complaint states “today would be called ‘social media.’” The ’362 patent discloses techniques for automatic transfer “of third-party content from a content-provider’s website to the user’s personal diary page.” The complaint alleges that Facebook’s “Like” button and other features infringe the ’316 and ’362 patents.
The inventor, Van Der Meer, sought to commercialize the inventions disclosed in the ’316 and ’362 patents on his website www.surfbook.com beginning in the early 2000’s. Van Der Meer, however, was unable to finish his work and passed away in 2004. His family, including his widow, enlisted the help of Rembrandt Social Media, LP to monetize Van Der Meer’s inventions by bringing this patent infringement suit against Facebook and AddThis. Rembrandt Social Media, LP is an affiliate of Rembrandt IP Management, LLC, a company that works with patent owners to enforce their rights. An additional twist on the facts asserted in the complaint is that around September 2008, the law firm that had represented Van Der Meer in prosecuting and commercializing the patents-in-suit took over prosecution of a patent application of Mark Zuckerberg -- Facebook’s founder. This same firm allegedly continues to represent Facebook in patent matters, but terminated its relationship with Van Der Meer’s commercialization arm in July 2012.
Given this background, several interesting issues may arise if the lawsuit progresses.
For one, Facebook may seek to invoke the equitable doctrine of laches as a defense. In a recent Eastern District of Virginia case, the court reiterated that the doctrine of laches “may bar a patentee’s recovery of pre-filing damages where (1) the patentee knew of his claim, but unreasonably delayed in filing suit and (2) that the delay caused material prejudice to the alleged infringer.” I/P Engine, Inc. v. AOL Inc., 2:11-cv-00512-RAJ-TEM, Dkt. 800 at 2 (E.D. Va. Nov. 20, 2012). As to the first element, an unreasonable period of delay is not clearly defined, but depends on the circumstances and begins when the patentee first had “actual or constructive knowledge of the defendant’s potentially infringing activities.” Id. at 3. A presumption of laches arises, however, “if there is a delay of six years or more once a party has actual or constructive notice of possible infringement.” Id. at 4. As to the second element, material prejudice, the patentee may show economic prejudice where the defendant will lose “monetary investments or incur damages, which likely would have been prevented by earlier suit.” Id. at 6.
In this case, the ’316 and ’362 patents issued in 2001 and 2002, respectively, and the inventor, Van Der Meer, passed away in 2004. Title to the patents-in-suit likely passed to Van Der Meer’s family sometime in 2004. Facebook publicly launched its website within Harvard as early as 2004, made the service available to the general public around September 26, 2006, and launched the “Like” button around February 9, 2009. Facebook thus may argue that the Van Der Meer family, for whom Rembrandt now is acting as agent, knew of their claim that the Facebook website may infringe the patents-in-suit and unreasonably delayed in filing suit. This delay may be calculated as follows: over eight years from the Van Der Meer family inheritance of the patents-in-suit (i.e., ~ 2004 to February 2013), over six years from the public launch of Facebook (i.e., September 2006 to February 2013), and just under four years from the introduction of the “Like” button (i.e., February 9, 2009 to February 4, 2013). Notably, a presumption of laches may be applicable based on the first two time periods, and would require a fact intensive inquiry as to what was done and when. Moreover, the applicability of the doctrine of laches may ultimately hinge on the introduction of the accused “Like” button and other features of Facebook and AddThis’s products.
In addition, the relationship between the Van Der Meer family and Rembrandt raises possible issues pertaining to standing. The Federal Circuit has held that there are two types of parties to patent suits in terms of standing: “ those that can sue in their name alone; and  those that can sue as long as the patent owner is joined in the suit.” Morrow v. Microsoft, 499 F.3d 1332, 1339 (Fed. Cir. 2007). Under the first type, which apparently is relevant here, for a party to bring suit under their name alone, that party must be the patentee, patent owner, assignee, or an exclusive licensee with all substantial rights in the patent. 35 U.S.C. § 281; Morrow, 499 F.3d at 1339. Presumptively, Van Der Meer’s patent rights were devised or passed intestate to Van Der Meer’s heirs; and, Rembrandt, who is acting as an agent for the Van Der Meer family, is a proper assignee or exclusive licensee of the patents-in-suit. Nonetheless, the bona fides of such standing, and the assignment records underlying it, likely will be scrutinized.
Gibbons will continue to track the status of this case and will report any significant developments as they arise.
William A. Hector is an Associate in the Gibbons Intellectual Property Department.