Free for a Fee

PA Advisors, LLC is an arm of Erich Spangenberg‘s patent-holding empire. Its job is to assert U.S. Patent No. 6,199,067, which claims the use of user profiles in Internet search; it was used to sue Google, Yahoo, Facebook, and several other smaller players in November 2007. [full PA Advisors docket]

On Friday, Law360 reported that the suit was dismissed against Facebook; and remarkably, a Facebook spokesman said that no payment at all was made to Spangenberg. That’s pretty unusual in a case brought by a patent-holding company.

If a case isn’t going well, it’s still typical for a plaintiff to get at least a small payment. That payment might not even cover the plaintiff’s legal costs, so it’s effectively a defense win; but it allows the plaintiff to save face. But not here: “After meeting with Facebook and learning more about our technology, we
appreciate that PA Advisors decided to dismiss their claims without any
payment or other agreement,” said the Facebook spokesman.

So they “learned more about the technology” and decided to drop the suit. Nice of them, hey? Vintage Spangenberg right there, only asserting patents against the hundreds of companies that are spot-on infringers. I called Facebook’s defense lawyer, Orrick partner Neel Chatterjee, who declined to comment. PACER indicates that Facebook initially hired Fenwick & West, but Orrick took the case over in April.

The ‘067 patent is a child of the dot-com era, invented by Brooklyn-based inventor Ilya Geller in 1999. Geller was president and CEO of the now-defunct LexiClone. The company has a note on its site indicating it sold the patent to PA Advisors. (The note is dated May 2008, but the patent was sold before the suit was filed in November.) The phone number on LexiClone’s site is outdated.

The PA Advisors suit continues ahead against defendants Yahoo, Google, ContextWeb, and Specific Media. Spangenberg’s team consists of several of his usual lawyers like Andrew Spangler and David Pridham, plus the Fort Worth-based firm Friedman, Suder & Cooke, and the interesting addition of Joseph Diamante, a partner in Jenner & Block’s New York office. PTT defamation litigant Eric Albritton was on Spangenberg’s team but dropped off the case in late February. (Interesting timing—just a week or two before before filing suit against Rick Frenkel.)

Facebook has only been subject to two patent lawsuits in its brief
corporate history; in addition to the PA Advisors suit, there was one
brought in Pennsylvania by Cross Atlantic Capital Partners; it was filed in July 2007 and settled within six weeks.

Some good news: I noticed this weekend that Spangenberg has returned to naming his companies after gods and stars. Texas Secretary of State documents indicate that in January, Spangenberg has consolidated several entities, including PA Advisors, under the name Granicus IP. The following companies were all merged into Granicus IP:

• Travel IP Technologies, LLC (no litigation history)
• CT IP Holdings, LLC (no litigation history)
• MT IP Holdings, LLC (no litigation history)
• ST Sales Technologies, LLC (this company was responsible for one of the “let’s do this again” lawsuits against car companies that got Spangenberg in trouble in Wisconsin.)
• PA Advisors Holdings, LLC (this was separate from PA Advisors, LLC; so PA Advisors still exists, but PA Advisors Holdings merged into Granicus.)

Granicus is a river god of Mysia (now Turkey), son of Oceanus and Thetys.

Image: Alexander’s Charge at Granicus, via Wikimedia

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