Patent Suit Targets Apple, Google and Napster

An online movie distributor on Friday filed suit against Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG) and Napster for alleged patent infringement. The plaintiff, Intertainer, claims the companies are treading on its intellectual property by infringing on a patented method for distributing digital entertainment over the Internet.

The trio of technology titans are tapping the technology without permission, according to Intertainer's complaint filed with a federal court in Marshall, Texas. Neither Apple, Google nor Napster could immediately be reached for comment on the lawsuit.

Willful and Deliberate?

Specifically, Intertainer's patent, which according to court papers was issued in August 2005, covers a "digital entertainment service platform." The patent supposedly covers commercial distribution of both audio and video over the Internet.

Intertainer calls the alleged infringement "willful and deliberate." If the movie distributor proves its case, the judge would have the leeway to as much as triple any damages awarded.

Whereas the big name brands being targeted are noteworthy, the big online brands that are not being targeted are also noteworthy, according to Richard Doherty, an analyst at Envisioneering Group, referring to Amazon (Nasdaq: AMZN), Real Networks and Sony Connect.

"Other companies are delivering media online. Why aren't they named in the suit?" Doherty asked. "Real Networks was delivering media before Interntainer was incorporated. There seem to be some real inconsistencies here as far as using a patent for what it's designed to do, which is to grant a benefit and franchise to others through licensing."

Way Back in 1996

Intertainer, launched in 1996 by television and film producer Jonathan Taplin and two other Hollywood entertainment executives, folded about five years ago despite investments from Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC), Sony, NBC and Comcast (Nasdaq: CMCSK) and 155 subscribers.

However, Taplin, who is now an adjunct professor at the Annenberg School for Communication at the University of Southern California, still wants his pay day. Taplin could not immediately be reached for comment, but the Intertainer suit claims it has suffered irreparable harm and has asked the court for cash compensation and an order to prevent the companies from using its technology.

The courts do not look highly on people using the legal system to collect supposed damages on patents that were issued long ago.

Patent Trolls?

"Is this a true lawsuit filed by people trying to find justified compensation, or is this one of those nuisance lawsuits filed by someone who hopes to get a quick settlement to go away? This narrow scope of targets doesn't make sense," Doherty argued.

Nuisance lawsuits are often filed by what are known as patent trolls. Patent trolls are individuals or companies with a patent portfolio containing important software patents that they never intended to commercialize. When they are unable to obtain a licensing agreement with another company, they threaten or initiate patent infringement litigation.