Beneficial Innovations Inc., the Nevada-based patent licensing company run by inventor and retired lawyer Sheldon Goldberg, shifted strategies this week. With a trial date nearing, Goldberg and his contingency fee lawyers at Dovel & Luner dropped a patent case against Amazon.com Inc. without recovering a cent. But they immediately picked a new fight, suing Microsoft Corp. on the same day in the same court over some of the same patents on online advertising technology.
Beneficial’s case against Amazon was scheduled for trial on Aug. 11. In a short order issued on Monday, U.S. District Judge Rodney Gilstrap in Marshall, Texas refused to reconsider a magistrate judge’s ruling that limited Beneficial’s potential recovery. The next day, Beneficial voluntarily dismissed with prejudice its long-running claims that Amazon infringed two of its patents. Sources with knowledge of the case say there was no monetary settlement.
Amazon is represented by former Kaye Scholer partner Alan Fisch of the IP boutique Fisch Sigler. That firm as been racking up defense wins in the Eastern District of Texas (see here, here and here.) Fisch declined to comment.
Jeff Eichmann of Dovel & Luner told us an interview that the case ended in a “ceasefire,” as opposed to an outright victory for Amazon. He said Amazon”s potential damages were relatively small even before the magistrate judge’s claim construction ruling, so the client made a decision to focus resources elsewhere. Beneficial still has other patents related to online advertising and online gaming that it can assert against Amazon, and, Eichmann said, the new case against Microsoft is “much bigger.” That case, filed in Marshall on Tuesday, alleges infringement of similar patents by the news website msn.com and the search engine Bing.
“Any time a defendant makes a payment of any size, they typically want rights to all your patents,” Eichmann wrote in an e-mail. “We determined we were better of taking no payment to resolve the small case heading to trial than taking a modest payment (a discount on the damages claim) and giving up rights on all the other patents.”
Amazon was the last holdout in a multi-defendant case Beneficial filed in 2011. The original defendants included magazine and newspaper publishers like Village Voice Media and ALM Media that allegedly infringed through their use of Google Inc.’s DoubleClick technology. (ALM owns The American Lawyer.) Google then sued Beneficial for breach of contract, alleging that it reneged on a prior agreement between the companies that protected Google customers from infringement claims. A federal jury in Marshall returned a verdict for Google earlier this year and awarded $1 in nominal damages, as Joe Mullin reported for Ars Technica.
Goldberg, a retired lawyer in Nevada, is the inventor of all of Beneficial’s patents. Eichmann said that his client was an online advertising visionary and that his company has secured sizable settlements with two dozen companies.
A Dovel & Luner team including Eichmann and Greg Dovel won an $85 million verdict against Google earlier this year for the non-practicing entity SimpleAir Inc., as we reported here. The firm only handles cases on a contingency fee basis.