July 19, 2010 / 9:30 AM / in 9 years

Facebook, small firm square off over patent claims

WILMINGTON, Delaware (Reuters) - Facebook Inc on Monday began its defense against claims that the most basic functions of its hugely popular website infringe a patent held by a little-known company.

An attorney for the patent’s holder, Leader Technologies of Columbus, Ohio, said in opening arguments in federal court in Delaware that internal Facebook documents and testimony by executives of the social networking website would show “overwhelming evidence of Facebook infringement.”

Facebook’s lawyer countered in his initial presentation to the case’s eight-member jury that Leader Technologies founder Michael McKibben developed a software tool for business, not social networking.

“He didn’t invent the Internet. He didn’t invent web browsing,” said Michael Rhodes, an attorney with Cooley LP, which represents Facebook. “He didn’t invent a lot of things.”

Leader is seeking damages and a permanent injunction to stop Facebook from infringing the patent.

McKibben founded Leader Technologies 13 years ago to find better ways to promote online collaboration in the early days of the Internet.

From 1997 to 2002, when the company applied for its patent, McKibben and his team spent 140,000 hours and $10 million developing the technology, according to opening arguments from the company’s attorney, Paul Andre of King & Spalding.

The patent was issued in 2006, two years after Facebook launched its website.

Andre promised to take the jury to the social networking website’s source code to prove Facebook was infringing Leader Technology’s patent.

“You’re going to see behind the curtain. You’re going to see it in action,” Andre said.

Facebook attorney Rhodes told the jury the six-day trial would turn on a few words, such as “dynamically,” that in the patent described how metadata was updated. Rhodes defined Metadata as data that documents other data, such as information about photos uploaded to Facebook.

Rhodes walked the jury through setting up an account on Facebook to show how the company’s site does not perform in a way that infringes.

In addition to defending itself against patent infringement, Facebook is making its own claims and asking the jury to find the patent invalid.

Rhodes said Leader invalidated its patent by marketing the product based on the patent well before the patent was issued.

He also attacked the patent by displaying a 1998 patent side-by-side with McKibben’s and said it describes the same thing McKibben was trying to invent. An expert witness would explain the description was “spot on,” Rhodes said.

It showed, Rhodes said, that McKibben’s patent should not have been issued.

He also went to the first page of the patent, which described the invention as a “dynamic association of electronically stored information with iterative work flow changes.”

“The patent doesn’t mention social networking,” said Rhodes.

The case is Leader Technologies Inc v Facebook Inc, U.S. District Court, District of Delaware, No. 08-00862.

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