Uniloc Suffers Setback in East Texas Patent Fight

Uniloc Suffers Setback in East Texas Patent Fight

Accused patent troll Uniloc USA Inc. has asserted its patents against dozens of companies, ranging from the gigantic (Microsoft Corp.) to the obscure. Now a small software company and its New England lawyers are claiming an outsized victory against Uniloc in the Eastern District of Texas—and saying the win will help other Uniloc targets as well.

In late February, Uniloc asked U.S. District Judge Leonard Davis in Tyler to dismiss its patent infringement suit against SlickEdit Inc., a North Carolina–based company that provides source code and text editing software for developers. According to SlickEdit counsel Timothy Shannon of the New England law firm Verrill Dana, Uniloc beat a hasty retreat after a magistrate judge gutted its patent claims during a Feb. 13 Markman hearing.

“Uniloc wildly mischaracterized the patent language and tried to turn a little patent into a broad one,” Shannon said. “The court didn’t buy it.”

Uniloc had alleged that its patent covered technology that enables companies to let employees borrow or “check out” software that’s licensed for multiple users. It filed identical lawsuits against a dozen different defendants in October 2012. Nine of the defendants settled last March, but SlickEdit, Altium Inc. and Altair Engineering Inc. continued to fight. The cases were consolidated for discovery.

The court’s experience in patent litigation worked in the defendants’ favor, according to Altium attorneys David Dunham and Cabrach Connor of the Texas-based firm Taylor Dunham & Rodriguez, who secured a settlement with Uniloc just prior to the Markman hearing. Magistrate Judge Nicole Mitchell appointed a technical adviser and delved deeply into the merits of the case, he said. “This is something the Eastern District is consistently ready and able to do, and that makes a big difference in patent litigation,” Dunham said.

SlickEdit counsel Shannon said that after the hearing, Uniloc contacted him saying it was ready to dismiss its case against SlickEdit. Twenty minutes later, Shannon said, he had a draft dismissal in his inbox. “They didn’t want any follow-up briefings that might have further limited their patent,” said Shannon. “They didn’t want to do any further damage to their national campaign.”

Shannon said his client paid Uniloc nothing. The suit was officially dismissed on Feb. 24.

According to Shannon, the claim construction Uniloc sought would have enabled the company to assert the patent against a huge swath of American businesses. Uniloc has already asserted various patents against tech companies ranging from Microsoft, Sony America and McAfee Inc. to Minecraft maker Mojang and the cloud computing company Rackspace Hosting Inc. (As we’ve reported, last year Rackspace won a key victory against Uniloc in a case dealing with patent eligibility.)

The Markman ruling in the case involving SlickEdit narrows the scope of Uniloc’s patent claim and is likely to influence the remaining cases in which Uniloc has asserted the patent, Dunham and Connor said. The judge issued his decision from the bench, and a formal ruling has not yet been issued. A transcript of the hearing was not immediately available, and Uniloc’s lead attorney, Steven Williams of McDole & Williams, could not be reached for comment.

The case against Altair is still pending, as are about 10 other cases that Uniloc filed in November asserting the same patent. Attorneys for the defendants in those cases did not return calls seeking comment.

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