| Fig. 1 – Big trouble ahead for the Facebook IPO? Donna Kline reports for Pittsburgh Business Report and is a former reporter for Bloomberg. |
Someone answer a question for me: Why hasn’t the mainstream media picked up on the Leader v. Facebook patent infringement case?
When I was first notified of the pending Federal trial, I was shocked to find that this had not already been discussed ad nauseum.
We are not talking about a small-time case here. If Leader Technologies were to prevail on appeal, Facebook could be subject to hundreds of millions, if not billions of dollars in damages. If a judge saw fit, FB could also be forced to cease operations (that’s what an injunction is.)
With Facebook’s February filing of intent to issue common shares, shouldn’t that be considered ‘material’ enough to be mentioned in their S-1 document? Don’t potential investors have a right to know how damages resulting from this trial could impact FBs bottom line? And possibly cause them to shut down?
What about the conflict of interest between FBs IPO attorneys (Fenwick & West LLP) and the case of Leader v. Facebook? These are the same attorneys that represented Leader Technologies in 2002, the pivotal period under question regarding the validation of the disputed patent. Is that OK? I don’t think so. You?
I am currently uncovering other ‘smelly’ items that aren’t disclosed by FB. (Stay tuned!)
Why am I the ‘only one’ doing this?
I hear that a CBS News San Francisco affiliate (KPIX) will be reporting the story this week. One delay they are having is that this reporter has not been able to get any comment from Facebook. (Which is the same problem I had.)
Too big to return phone calls?
What? Is Facebook ‘Too Big’ to return a phone call? Do they have too much money behind them to worry about us sniveling reporters? Maybe they think we will be too afraid to report without comment, so if they ignore us, we will go away? Does that seem right to you?
Have we not learned after Enron, Madoff, Worldcom, Allan Stanford & AIG?
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This is a classic David v. Goliath story if you ask me. One worth pursuing. Haven’t we learned our lesson with the likes of Enron, Madoff, WorldCom or Stanford? These were all major conglomerates who ended up losing hundreds of millions to billions of investor money. These are also entities that were audited regularly by the SEC. The SEC is supposed to catch these crooks before there is too much damage. They did catch Allen Stanford (I suppose), but Madoff turned himself in and it took employees of Enron and WorldCom to bring attention to the their cases. It took a $182.5 billion American taxpayer bailout of AIG to save it from catostrophic subprime mortgage losses—the largest bailout in American history. And even then, investors lost mucho dinero.
Presidential candidates ‘Like’ infringed technology
So what is it? Are too many people reliant on FB for communication and income? I know that President Obama is utilizing FB for his 2012 campaign run. Heck, so is Mitt Romney. (FYI Obama has over 25 million ‘likes’ and Romney has just under 1.5 million. Perhaps a new indicator in the works? I bet the media grabs ahold of that one. LOL)
Could it be that FB is so engrained into our society that reporters are fearful of taking on the story?
145,000 man-hours to invent; less than two weeks to copy?
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| Fig. 2 – Leader Technologies says their (now) patented technology took 145,000 man-hours and $10 million to make a working platform comprised of 600,000 lines of computer code by the end of 2002. By contrast, Mark Zuckerberg testified in ConnectU (the Winklevoss Twins) that he created the first working version of Facebook in “one to two weeks” while studying for finals in January 2004 (Facebook launched Feb. 4, 2004). Experienced programmers say Zuckerberg might have written 7,000 lines of good code in two weeks (and they say that estimate is being generous and does not give much time to study for finals). And oh by the way, Leader inventor Michael McKibben emailed a white paper on this technology to his son at Harvard who just happened to be in the adjacent dorm to Zuckerberg. Zuckerberg admits hacking these dorms and stealing student’s personal information. The first version of Facebook bears an uncanny resemblance to this white paper. |
Are people having a hard time believing that Zuckerberg actually copied a patent to create the FB platform? Are they more inclined to believe that he wrote the code for FB in “one to two weeks”? When the platform in question took Leader Technologies 145,000 man hours and $10 million to create? Seriously?
America Invests Act: Real or Ruse?
When Barack Obama signed the patent reform law back in September of 2011, which is intended to change the laws from ‘first-to-invent’ to ‘first-to-file’. The head of the USPTO, David Kappos released a statement saying that the the bill gives the USTPO “the tools it needs to deliver cutting-edge technology to the marketplace sooner.” “But Silicon Valley entrepreneurs are skeptical that the bill will ease the nation’s patent litigation process and hurt the small start-up.”
Is this bill just a way to railroad inventors that don’t have they’re hand in someone’s proverbial political pocket?
Protecting the American inventor or the big infringer?
If the current administration is truly a representative for the middle class and working Americans, seems as though they would be very interested in making sure that the relatively small company called Leader Technologies, who has succeeded in proving that FB is infringing on their patent, is treated fairly in a Federal Court.
What do you think? Is the name Facebook such a mainstay in our society that it could influence a Federal Court decision? Do you think that it affects a reporters desire to dig into a story that may be a negative for FB? Does it scare the SEC away from an investigation? Seriously. Does it?
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CREDITS: Fenwick & West LLP Logo. Link source: http://www.fenwick.com. D. Baldinger Cartoon. Link source: http://www.dbaldinger.com/opinion_cartoons/first_page/images/2_enron_bw.jpg. Like hand. Link source: http://www.thefanpageessentials.com/likeit/images/Like-Button-psd61067.png. A Bright Idea light bulb. Link source: http://www.whrabel.com/cavortinc/images/bright_idea.gif.
{ 19 } Comments
If this case has the merit as you suggest why wouldn’t 20/20 or Dateline run all over the story?
Donna has it read right ;yes the federal courts will fall in line as directed by the political powers to be. Sad isn’t IT!
Maybe because of this? http://mobile.bloomberg.com/news/2010-07-28/facebook-wins-infringement-trial-as-jury-finds-leader-patent-is-invalid.html. Am I missing something? Did the patent somehow become valid in the meantime?
Amen Donna! We’ve been wondering all along why no one is willing to run with this story (nationally). Thank God there are people in your profession, like yourself, who actually do their job- report news as it is, not as you would have us believe!!!
I am hearing only the sound of crickets from my New York and Washington media colleagues to your posts. Usually they at least reply to me! Big infringers should not be allowed to steal just because our politicians “Like” the stolen technology (great point).
Thank you for your comment! Finally some opposing feedback! I encourage you to read through the entire article you linked above and look for these details: Leader did prevail on 11 of 11 claims of patent infringement. This means that Facebook did copy Leader’s idea, and were not able to disprove that fact. The ‘on sale bar claim.’ if true, does invalidate a patent for that trial. So, even if someone copied it verbatim, they would not be subject to damages. What the reporters on this story did not mention is the spin process used by Facebook to confuse the jury. FB did not offer any evidence to support their claim, but provided heavily redacted (portions deleted) commentary re: 2009 products and presented it as an answer regarding 2002 use of the product. This is what Leader is appealing in court on March 5th. I have gone over the briefs filed with the Federal Court with a patent litigator, and he tells me that without ‘clear and convincing evidence’ there is no way the jury’s decision will be upheld in court. Thanks again for your comment. Please post more!
Who even watches 20/20 or dateline???
Experience shows us that if things “don’t add up,” there’s probably another agenda happening.
The national media should be all over this story. They certainly were gushy about the Facebook IPO filing.
Maybe the national media are waiting for the appeal hearing on March 5th to focus on this story.
Remember that Watergate started as just a little break-in story and blossomed into a national disaster leading directly to the White House and President Nixon. They tried to contain and stonewall the investigation. But truth finally prevailed thanks to the tenaciousness of Woodward and Bernstein.
This situation leads not just to the leaders of the U.S., but has serious international implications. There are other major efforts that have succeeded in undermining cyber security, too. Those could be another part of your investigation.
Keep up the great work, Donna! You’re on the right path.
In reference to AOK, comment to #3 on this page. That Bloomburg link is a biased news report, in that it inaccurately portrays the outcome of the original Leader v Facebook trial. Facebook did NOT WIN the trial as your link indicates! In the split verdict, Facebook was found GUILTY of 11 OUT OF 11 COUNTS of infringing upon Leader’s patent. The only thing that Facebook won in that trial was a “supposed on sale bar”. This technicality will be overturned, in the district court trial, as a MATTER OF LAW. In regards to the patent in question, Leader was reaffirmed by the US Patent Office last year. I would suggest to read and reread this entire blog (follow links) before commenting.
Condescension does you no favors? Steve, nor does assuming I didn’t read. Why will the patent be found valid on appeal when it wasn’t at the initial trial? That is all I’m asking.
Interesting turnabout. Early in Leader v. Facebook the blogosphere was condescending (saying Leader’s patent was nothing special; nothing innovative, and that McKibben was a “patent troll”… e.g., Venturebeat). Now Facebook-lovers have turned to defending the “on sale bar” verdict — this new view is the polar opposite. It takes the position that Leader’s patent is valid and innovative, but that Leader tried to sell it too early. Read the trial transcript which is online. Facebook attorneys did everything except swing from the chandeliers to confuse the jury on this issue. Somebody in Delaware came forward and revealed that Facebook practiced these parlor tricks with a 70 person focus group months before trial. Oh what webs we weave . . . The cat’s out of the bag. Go Leader!
AOK!!! I’m not trying to be condescending; I’m just pointing out the flaws of the link that you provided to get your point across. Whether you (read) the whole blog or not was presumptious on my part (my bad). The fact that, in the trial, the jury ruled on invalidation is irrelevant. Leader, following that ruling, spent time and money getting the patent revalidated from the US Patent Office. The patent in question now resides with Leader Technologies, Lewis Center, Ohio. (not Facebook, Palo Alto, California). I have but one question for you: Having been found guilty of 11 counts of literal patent infringement, does it not beg to question the entire validity of Facebook itself?
[Donna Kline: The "revalidation" to which Steve refers was actually initiated by Facebook as a further challenge to the validity of Leader's patent. Insiders tell me that this "Patent Reexamination" took over a year and was quite expensive in time, money and attention. According to the Patent Office, Leader successfully defended all of its 35 claims in U.S. Patent No. 7,139,761. A Patent Reexam is essentially a separate lawsuit. The records show Facebook used many of the same allegations of "prior art" that they used at trial and which were the subject of much expert testimony on both sides. For us laymen . . . Facebook lost their second bite of the "prior art" accusation apple. This loss further strengthens Leader's claims to having invented the engine running Facebook as we know it.]
This whole case, as far as I’m concerned, is shameful at best. It brings into question the integrity, frankly, of the entire Federal Judiciary. The Hon.Leonard Stark of Delaware, newly appointed to the bench, should have never allowed this split verdict to stand. There were so many inaccuracies and flaws in Facebook’s arguments, and given the way they conducted courtroom theatrics, the jury ruled out of confusion; and in doing so even ruled against the judge’s own instructions. Is this not a case of dereliction of duty by the judge? There is absolutely no evidence of any on sale bar that could warrant the jury’s ruling for Facebook in this matter.Facebook had absolutely no evidence;that’s why they resorted to their dark arts(tricks).
The only thing that invalidated the patent was the so called “on sale bar” ruling by the jury.This is a technicality that will be overturned by the appeals court, because there was no factual evidence to substantiate the ruling; the jury ruled out of confusion due to courtroom theatrics and misdirection of evidence by Facebook’s lawyers. And, with regards to this patent in question, Leader has since applied and has been reaffirmed their patent by the US Patent Office. With that being said, this same patent, legally belonging to Leader Technologies, is the SAME patent that Facebook was found guilty of infringing 11 of 11 counts.
I received this Email for comment:
Click here to see that picture again. Enjoy!
Here are links to the Russian investment articles that I also posted in the Backgrounder:
* “Facebook’s friend in Russia.” Fortune, Jessi Hempel, Oct. 4, 2010. Accessed Feb. 10, 2012 <http://tech.fortune.cnn.com/2010/10/04/facebooks-friend-in-russia/>.
* “Sorry, Americans: Goldman kicks U.S. clients out of Facebook deal.” CNN Money, Laurie Segall, Jan. 17, 2011. Accessed Feb. 2, 2012 <http://money.cnn.com/2011/01/17/technology/goldman_facebook/index.htm?iid=EAL>.
* “Facebook investor DST comes with ties to Alisher Usmanov and the Kremlin – Three Goldman Sachs bankers, Alexander Tamas, Verdi Israelian and John Lindfors joined DST over the past three years.” The Guardian (UK), Simon Goodley, Jan. 4, 2011. Accessed Feb. 11, 2012 <http://www.guardian.co.uk/technology/2011/jan/04/facebook-dst-goldman-sachs>.
* Christi Scott Bartman. LAWFARE: USE OF THE DEFINITION OF AGGRESSIVE WAR BY THE SOVIET AND RUSSIAN GOVERNMENTS. Dissertation, 2009. Bowling Green State University. p. iii. Last accessed May 3, 2011 < http://etd.ohiolink.edu/send-pdf.cgi/Bartman%20Christi%20Scott.pdf?bgsu1241726718>.
I would first and foremost like to point out that a person duly sworn to protect and defend the U.S. Constitution cannot openly and publically circumvent it. As far as separation of powers is concerned the President may only appoint federal judges to the bench, not direct the judges’ courtroom proceedings. Whether President Obama, as you cite, chooses to openly take sides in this matter, is irrelevant. Also, let’s remember that the federal judiciary is under the guise of Congress (Article 2, U.S. Constitution). That means that there are many in Washington, i.e. Republican House members, who would not stand for those shenanigans by our illustrious President. I’m sure that any involvement by Obama would call for “heads to roll” (Articles of Impeachment?). Obama may have 25 million likes on Facebook; who cares? And as far as the media is concerned, yes, there are many who are willing but apprehensive to step out at this point in time. Let’s not kid ourselves here; Facebook is a very large and important entity on the Internet, and many (media included) are very entrenched in its usage. With that being said, who would want to bite the hand that’s feeding them?
Wow no borders, no patent protection, sanctuary cities,guns for the drug cartels, …………what a country. And to think Obama and his cronies are for the 99% versus the 1%. HA HA Ms. Kline , heroes are ordinary people that brave to do extraordinary things. You are a hero !!
Donna – email me back if you can. The investigative journalism you did here, along with the succinct and well-written writeup deserves major kudos.
I’ll definitely be watching your blog for updates.
Thanks for advocating for us and Leader. Hope to hear back from you so we can talk a little more. I’ll tell you what I was working on when I stumbled upon your piece over at liberty.
Super work. Thanks again.
Responses to the 18 comments:
1. S Craddock: 20/20, Dateline, Fox, Bloomberg, MSNBC, all the outlets are on Facebook. The common denominator is obvious and it isn’t a political party.
2. M Strall: The case appears too strong to lose; even if this has to stretch out to the supreme court. This isn’t a patent troll case, nor is it a weak argument; I doubt Yahoo’s is either.
3. Aok: You are missing something; much more than even Donna has brought to your attention. Keep noticing.
4. S Williams: Agree but try not to see it from a political angle; this legal situation is only part of the FB problem. This case has the potential to bring out the serious problem of the social bubble and the harm it does to small businesses who think they must be on every social platform in order to be successful. We are literally taking every person and business’s time away from innovation and thinking.
5. Linda W: See note to S Williams re politicizing it. It’s not the way to do this because it’s not the real problem. Look at the common denominator inside the social bubble.
6. Notice Donna did not politicize this. Follow her lead.
7. B Campbell: Exactly, they can’t because they are tweeting and status updating and circling and linking on the bubble of the big four.
8. Al: The reason the media isn’t on it has nothing to do with government politics; it has everything to do with social media politics. We are in a bubble and then on the small islands too of which there are thousands. You can go to sites and put in some handle and ask it to register you on 360 different platforms; one of them does 500 for you all at once! But be sure to go back month after month because they change (old out of business new just got funding). After all, you can’t win in business unless you are farming everyone elses’s platforms!
9. Steve again: Agree; now when you go out and write about this case/situation/whatever, don’t be tempted to make it about political parties; it’s about social bubble politics only. Stay focused, your ideas are good when they aren’t covered in Party.
10. Aok again: Keep it shorter, such as this: Steve, help me understand why/how the patent will be found valid on appeal? How we word things shapes the answer.
11. K Craine: Effective approach, thank you.
12. Steve again: Get rid of the YOUs to express your meaning.
13. W Smith: Nice! Stay that way though; don’t be tempted to make it a Party. You didn’t quite yet but I can see it’s possible later. Burn the invitations.
14. Steve again: Nice summary. Sounds so much better without the YOUs.
15. Re the letter Donna received: Don’t use pigs as the scapegoat of language. We are brutalizing them daily and then we use language to imply they are bad (except when it smells good in the oven; then she is love at first bite). You are right about the likes ecosystem – it is more powerful than any governmental politics. Don’t bring Left Right into this though. Remember, when you refer to the pig you are referring to a very intelligent animal (much more so than our beloved best friends) and you are referring to something that needs a voice because she’s in trouble. I doubt that’s what you meant though when you say her name. Language matters; it matters to win a case, it matters to get readers on your site, it matters when we speak to pets our better halves and our children, it matters when we speak about our lives. Language tells us who we are. We bring out the best in ourselves when we focus on the power it.
16. Steve again: with such good points it is a shame they fall flat with governmental politics. Leave Obama out of this and focus on the issue at hand – the social bubble and the concentrated power of false likes, plusses, pins, #s of connections (the ones in your brain are the most important), checkins, updates, the color of your favorite plates, ad nauseum. Businesses go out of business because they are building their lives on other people’s property and stifling their own innovation.
17. Tex: Not worth a reply
18. Donna, I might have mistyped my ‘email’ the first time. We (as in anyone) are all hackable, shoot me a note and I will give you my #. I have a few things to tell you. Thanks for sticking to the facts. This isn’t a vendetta against FB or any Party, your work speaks for itself.
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