That’s the proposition Webvention LLC—which acquired U.S. Patent No. 5,251,294 from patent-hoarding giant Intellectual Ventures last year—has been making to scores of companies in a bid to license its little piece of IV, according to a pair of declaratory judgment lawsuits filed recently in federal district court in Delaware.
The ’294 patent claims to cover basic Web site presentation technologies, such as “previews” that pop up when a mouse rolls over certain site features. (For an example of what supposedly constitutes infringement of this patent, roll your mouse over the “suppliers” tab in the upper-right corner of the homepage of auto-parts maker Tenneco Automotive Operating Company, Inc., one of the two companies to sue Webvention in Delaware. Go ahead, infringe that patent!)
In bringing the suits, Tenneco [ PDF] and Novartis Corporation [ PDF] are moving to have Webvention’s patent declared invalid and not infringed. By doing so in Delaware, the companies appear to be trying to maneuver their disputes with Webvention out of its preferred venue, the Eastern District of Texas.
In July, Webvention LLC—a Texas=based shell company controlled by a Delaware-based holding company, Webvention Holdings LLC—used the ’294 patent to file a multi-defendant suit against 19 companies, including Tenneco, in East Texas. (Among the other companies named: Abercrombie & Fitch, ConocoPhillips, Dell, HTC America, United Parcel Services, and Visa.) [ PDF]
What makes the suits by Tenneco and Novartis particularly intriguing is that they offer the opportunity to read Webvention’s demand letters, which are attached as exhibits in both instances.
The letter sent to Tenneco [ PDF, see page 2], dated April 8, and signed by C. Graham Gerst of Chicago-based Global IP Law Group, notifies the auto parts maker that “[f]or a limited time…Webvention has adopted a policy of a single, one-time, fully-paid licensing fee” for the rights “to use Webvention’s technology”—in other words, the price Tenneco must pay to continue operating its own website.
Webvention’s terms, as spelled out by Gerst: If Tenneco pays within 60 days of receiving the letter, the price of the license is $80,000. After that, the price goes to $160,000. And after 90 days, the price increases again, to $300,000. That appears to be the final price point.
In the letter, Gerst writes that “more than 40 companies”—including such well-known names as Ann Taylor Store, Hewlett-Packard, Kimberly-Clark, Panasonic, and Symantec—have “chosen to take a license.” Tenneco chose not to, was sued, and, on September 28, filed its suit against Webvention in Delaware.
The Novartis suit, filed on September 17, also includes a copy of the Webvention demand letter received by the Swiss drugmaker [ PDF, see page 2]. It offers the same limited-time-only license for $80,000. The Novartis letter, dated August 4, and written by Webvention CEO Todd Schmidt, boasts that 86 companies have licensed the Webvention patent—a substantially larger number than the “more than 40″ cited by Gerst four months earlier and an indication that dozens of companies took Webvention up on the $80,000 proposition at the heart of its sweeping licensing campaign. The Novartis letter cites many of the same companies as the Tenneco letter, but also adds some new names, including American Express, Google, and Nokia.
Schmidt did not return an e-mail requesting comment.
It’s unclear whether any of the licensing revenue Webvention is generating will go to Intellectual Ventures. The Seattle-area company began selling off some of its tens of thousands of patents last year, and under the terms of some of those deals gets a cut of whatever revenue the patents bring in. The measures that Webvention’s owners have taken to shield their identities—setting up shell companies in both Delaware and East Texas—suggest that IV may well have a piece of the action. It’s also worth noting that some of the companies that Webvention claims have taken licenses—including Google and Nokia— are known to have licensing deals with or be “investors” in Intellectual Ventures, meaning they may have licenses to many patents that held by IV now or in the past.
In its East Texas lawsuit against Tenneco and the 18 other defendants, Webvention is represented by Bo Davis of The Davis Firm in Longview, Texas, and by the Albritton Law Firm, also of Longview. Novartis is represented in its suit by Alan Fisch and Coke Stewart of Kaye Scholer. Fisch declined to comment on the litigation. Tenneco is represented by Robert Lenihan and Brent Seitz of Troy, Mi.-based Harness Dickey & Pierce. Potter Anderson & Corroon is acting as local counsel to both of Tenneco and Novartis.