(Adds Trend Micro declined to comment and background,
paragraphs 7-8, 11)
By Dan Levine
April 1 Intellectual Ventures can seek hundreds
of millions of dollars in damages on a patent it bought for less
than $1 million, a federal judge ruled on Monday, handing the
patent acquisition firm a victory in a key attack on its
A multibillion-dollar company that virtually invented a new
market for patents, Intellectual Ventures accused Internet
security companies Symantec and Trend Micro in
2010 of infringing its intellectual property. The lawsuit, filed
in federal court in Delaware, includes a patent on technology
that helps detect malicious software embedded in digital
IV bought the patent for $750,000 and is currently seeking
at least $310 million in damages from the two
companies. Symantec and Trend Micro asked U.S.
District Judge Leonard Stark to bar IV from seeking such large
licensing fees on the grounds that a patent acquired for so
little couldn't possibly be worth so much.
The argument threatened IV and other patent acquisition
firms whose primary business depends on buying patents to win
licensing fees, instead of manufacturing products.
IV argued that the figure represents fair compensation given
how extensively Symantec and Trend Micro products rely on the
technology. In a brief order on Monday, Stark denied Symantec's
motion to exclude IV's damages argument from the case.
A detailed ruling from Stark was filed on the court docket
but was not publicly available on Tuesday. Representatives from
Symantec, Trend Micro and IV declined to comment.
Since its founding in 2000, privately held IV has raised
about $6 billion from investors and argues that it creates an
organized mechanism for innovators of all stripes to capitalize
on their ideas. IV's investors include major tech companies like
Microsoft and Apple.
Over the years, though, IV and other firms like it have
faced criticism from the technology industry, which argues that
patent litigation and royalty payments have become a burdensome
tax on innovation, and that firms like IV that do not primarily
make products are exploiting the patent system.
The debate has caught fire in the U.S. Congress, where a
proposal to make it easier to fight patent lawsuits passed the
House of Representatives last year and is currently pending in
the Senate Judiciary Committee.
In addition, the U.S. Supreme Court on Monday heard
arguments in a case that could impose new guidelines on how the
government issues software patents. [IED:nL1N0MS0S4]
Two other software security firms that IV sued, Intel Corp's
McAfee unit and Check Point Software Technologies Ltd, both
settled on undisclosed terms. Symantec and Trend Micro chose to
fight, though no trial date has been set.
The case in U.S. District Court, District of Delaware is
Intellectual Ventures vs. Check Point Software et al., 10-1067.
(Reporting by Dan Levine in San Jose, California; Editing by
Eric Walsh and Leslie Adler)