It wasn't much publicized, but the December 6 bankruptcy auction of software maker Commerce One may have caused a few exposed nerves – because the auction included a group of 40 patents tied to a language through which one business's computers communicate with another's, and an obscure company known as JGR Acquisitions bought them for $15.5 million.
The Commerce One auction had raised some questions among observers as to whether the buyer(s) would turn around and begin litigating to enforce the patents. "No one knows for sure," Electronic Frontier Foundation attorney Jason Schultz told AVNOnline.com, "but I have to believe that, if you're going to pay $15.5 million for some patents, you're going to want to get your money back with interest. I wouldn't hold my breath hoping for any altruistic results here."
The patents in question cover a "particular and efficient language" known as XML, through which companies doing business together can communicate through each other's and even third-party computers (like shippers', for example) to perform transactions. Commerce One developed a particular way to use XML and the patents in question were written to cover it.
JGR's obscurity leaves it an open question as to how or even whether they'll make active moves toward enforcing the Commerce One XML application patents. "[They] may well be some kind of shell company and suddenly turn around to whomever the real bidder was [for the Commerce One patents]," Schultz speculated. "We'll know if and when the first lawsuit's filed."
But Schultz also said litigation to enforce the patents now that Commerce One no longer owns them could be nonexistent as well.
"We believe Commerce One promised these patents would never be used to sue anyone who practices their [XML] method," he said, adding the promise is believed to be binding upon the buyer. "If [JGR litigates], they could be violating their own [agreement] when they acquired the patents."
That would likely relieve many watching the Commerce One situation, especially after reports surfaced in November that there was movement toward forming an industry consortium to buy the patents, reputedly because they wanted to prevent "speculators" from buying them and launching high-powered litigation to enforce them, according to California attorney Lee Van Pelt.
"Probably the least efficient way for these patents to be used by the industry would be for a speculator to buy them and aggressively enforce them against the industry," Van Pelt said at the time. "A lot of the companies who have expressed interest in this are not necessarily companies that would be targets."
But whatever JGR's intentions, Schultz said his group, for one, might have felt more comfortable had another software company – even Microsoft – bid on and bought the patents.
"Microsoft actually makes business-to-business software," he said. "They actually produce a product. They could, if they had acquired [the Commerce One patents], apply them to the product. We may not fully agree with that, but it's so much better than what [for example] Acacia [Research Corp.] does. [Acacia is] purely extracting a pound of flesh from the marketplace, or at least they're trying to, with really no benefit, no public benefit. So even though there are problems with the patent system in general, having a company that actually made this kind of software acquire them, we might have actually seen a more palatable result."
Acacia has been enforcing and litigating over a group of streaming media patents, Digital Media Transmission, it acquired over two years ago. Several Adult Internet companies have challenged the patent group.
A federal judge held last summer that several patent claim terms in the group were undefinable, but a scheduled December hearing on the Adult Net companies' move for summary judgment to declare the DMT group thus invalid – and a likely Acacia move to strike that motion – was cancelled, while a multi-district panel of the federal court system considers whether to move to California all DMT-related litigation in three other states.
