Microsoft Co-Founder Paul Allen Files Lawsuit Against Google, Facebook, Apple, eBay, Yahoo!, AOL, Netflix, Office Depot, OfficeMax, Staples, and YouTube

Posted Aug 27, 2010

Microsoft Corporation (NASDAQ:MSFT) co-founder Paul Allen is not messing around. He has filed a lawsuit against Google, Facebook, Apple, eBay, Yahoo!, AOL, Netflix, Office Depot, OfficeMax, Staples, and YouTube over patents. Paul Allen claims he owns the rights to pop-up stock quotes on websites, related news articles on websites, and videos on the sides of your screen.

Paul Allen filed this lawsuit in a Seattle federal court. “This lawsuit against some of America’s most innovative companies reflects an unfortunate trend of people trying to compete in the courtroom instead of the marketplace,” stated a Google spokesperson as quoted in the WSJ.

Critics of Mr. Allen’s actions have called this method of collecting royalties “patent trolling.” Patent trolling is an aggressive method of collecting from alleged infringers without any intention to market or produce technology using the patent themselves.

The patents were developed at Palo Alto firm Interval Research Corporation. Paul Allen financed this incubator with $100 million of his own money. But Interval shut down about 10 years ago. Paul Allen’s spokesman David Postman said that this lawsuit has nothing to do with the Microsoft co-founders health or personal finances.

eBay and Facebook have both already responded by saying that they plan to fight the lawsuit vigorously. Other companies are still preparing an official response. The lawsuit was filed by Paul Allen’s Interval Licensing LLC. Interestingly, Interval Research Corporation has been credited by Google in 1998 as an outside collaborator. Interval also helped fund research for Google co-founders Sergey Brin and Larry Page. This research led to the creation of Google itself.

[WSJ]