Thursday, September 15, 2011

EMC reported to gain rival support in patent troll lawsuit

By Kyle Alspach, Boston Business Journal

EMC Corp.’s appeal of a lawsuit filed by a “patent troll” has reportedly prompted support from the Hopkinton data storage giant’s rivals Hewlett-Packard Co. and Cisco Systems Inc.

The Wall Street Journal has reported that EMC (NYSE: EMC) also has the backing of Microsoft Corp., Oracle Corp., Yahoo Inc. and SAP AG’s U.S. Unit.

The six companies on Wednesday filed a brief in the U.S. Court of Appeals supporting EMC and other companies named in the patent suit, the Journal reported. A total of 18 defendants were named, including Boston-based physical record storage company Iron Mountain Inc. (NYSE: IRM), the WSJ said.

The tech giants have their own self-interest at heart in supporting EMC, however. Each of the companies has been named in a similar lawsuit in the past, according to the Journal.

The brief argues against allowing patent suits to be filed against numerous parties at once, which the companies said can lead to expensive settlements as a result of the difficulty of getting the parties to work together, the article says.

“Patent trolls” are firms that hold patents but don’t invent or make products themselves, and appear to only make money by suing companies for patent infringement. In the EMC case, the federal suit was brought in 2010 by Oasis Research LLC in the Eastern District of Texas.

The Wall Street Journal reported that patent infringement suits are picking up as a result of new patent-reform rules passed by Congress last week. The patent reform bill will move the United States from a “first to invent” patent system to a “first to file” system. According to one attorney, Craig R. Smith, a partner with Lando & Anastasi, changes in how patent cases are litigated may eliminate some of the more frivolous claims by patent trolls while smoothing the process for defending a patent suit. President Obama is expected to sign the bill.