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Friday, November 16, 2007

Acacia Sues Apple Over Digital Video Background Alteration Feature in iChat

Let's see, Acacia just finished litigating with (losing to!) Microsoft in Beaumont, Texas, just settled one of its cases against AT&T pending in Madison, Wisconsin (details confidential, but sending its stock up 10% yesterday, followed by down 25% in after hours trading due to the MSFT verdict), and has now sued Apple.

This case was filed, of all places, in East St. Louis, Illinois, in the Southern District of Illinois. The chosen law firm -- the only legitimate connection to the district -- is Simmons Cooper of East Alton, Illinois (a St. Louis suburb).

The patent in suit, 5,764,306, pertains to real-time digital alteration of a video background. Allegedly, Apple infringes by a similar feature in iChat when used with the Leopard OS. The patent's inventor, Michael Steffano, lives in Austin. According to this, Steffano filed for his patent in 1997 after he had founded a company, Viewics Corp., which practiced his patented invention. In fact, the complaint says that Apple is willfully infringing the '306 patent because of Viewics' StarFX product (see also here and here). Viewics was sold in 2001, but not sure to who.

The ownership of the '306 patent is, well, a bit fuzzy. First the patent was assigned to The Metaphor Group of Irving, Texas. The patent office assignment records back this up, with an assignment in March 1997. But in April 2004, Steffano recorded that on March 18, 1997 (7 years earlier), the patent was assigned to Digital Property Managment Group, of Los Gatos, CA. The only problem is that DPMG, a Texas company, wasn't actually formed until 2001, according to papers filed with the Texas Secretary of State. DPMG's sole member was Bruce T. Renouard of Los Gatos, CA. Who is he? Evidently, the Vice President of Sales of Power Integrations, Inc. in San Jose, CA. (Renouard joined Power Integrations in 2002, after he formed DPMG).

But Canadian patent records (warning, large file) show the patent belonging to Viewics. So, who owned the patent in 1997-2001: Viewics, DPMG, or Metaphor? If I were Apple, I'd file a DJ, TODAY, in San Jose, and then move to dismiss the SDIL case for lack of standing.

There is no record of the patent having been assigned from anyone to the company that sued Apple, Digital Background Corporation, an acknowledged subsidiary of Acacia. In fact, the complaint, on its face, identifies the patent as being owned by DPMG, and nowhere alleges that DBC has standing. Moreover, DPMG expired in 2004 for failure to pay Texas franchise taxes, and was reinstated this past May by Mr. Renouard working with the inventor. So, evidently, he was moonlighting from his job at Power Integrations. Apple, by the way, is or at least was a customer of Power Integrations.

More fun: the '306 patent expired in 2006 for failure to pay maintenance fees, and then was revived upon petition.

This is the third time Apple has been sued in the last week. First Microlinc (a troll/NPE) sued them in Marshall, Texas. Then Acacia (troll), masquerading as AutoText, sued them in Cleveland. Now Acacia (troll), using the fake name Digital Background Corp, has launched a case in East St. Louis. Add that to three troll/NPE cases last month (Digital Reg of Texas, Wi-LAN, and Leaper Footwear), and Apple has its hands full. Surge, indeed.

* Update 11/17/07: It occurs to me that there may be more than one Bruce T. Renouard, and/or this may be Power Integrations behind DPMG, not Mr. Renouard personally. Nobody else showed up with that exact name on Google in the Bay Area, but Google's not perfect. Whatever is the case, Acacia got the patent and is suing now.