BREAKING NEWS: Facebook’s Mobile Woes Just Got Bigger
Leader Technologies is awarded the patent on social networking apps* after a 10-year USPTO evaluation
* Yes, ALL social media apps, incl. mobile apps
No one can accuse the Patent Office of moving too quickly on this patent. Leader Technologies received notification today from the U.S. Patent Office that they will be awarded a new U.S. Patent No. 8,195,714 titled CONTEXT INSTANTIATED APPLICATION PROTOCOL on June 5, 2012 (click here). This patent is the sister patent application to U.S. Patent No. 7,139,761 that Facebook was judged guilty of infringing on 11 of 11 counts.
Social Networking Market Shake-up Imminent?
This is the patent on SOCIAL NETWORKING APPS. Yes, you read me right, this very well could be the definitive patent on ALL social networking apps. Impossible you say? Preposterous you say? I thought so too when I first learned about Leader Technologies six months ago, but after a thorough investigation and consultation with numerous experts, I have concluded that it is ALL TRUE.
Patent No. 8,195,714 was filed on December 11, 2002, the same day as Leader’s now famous ’761 patent. This means that the technical ability for an app to manage, transfer, collect and tag data has been “patent pending” for nearly 10 years. It also means that ANY APP may now be subject to pay licensing fees to Leader Technologies.
Not only does Leader have a patent on the engine of social networking (U.S. Patent No. 7,139,761), they now have a patent on apps (U.S. Pat. No. 8,195,714). Kaboom!
What does this mean for the social networking world? They’d better start beating a path to Leader Technologies’s door to license the invention, instead of just running willy-nilly through the marketplace hacking everything. The message for app developers is before you spend tens of millions developing your app ideas, it would be wise to work out a license deal with Leader first. This is the way our American system of innovation is supposed to work and reward inventors, folks.
What does this mean for Facebook? Pure trouble. Since the launch of their IPO one week ago, Facebook has been slammed with lawsuits for failing to address their mobile marketing strategy. Now it appears they may be required to pay Leader licensing fees to operate mobile-y at all. Since this patent for social apps would appear to be central to a mobile strategy, I asked Leader CEO Michael McKibben if Facebook’s attorney Fenwick & West (Leader’s former attorney) knew about this patent while it was pending. McKibben said, “Fenwick not only knew about this patent, they had a copy of the provisional patent source code.”
The message for the marketplace is this: (1) Facebook didn’t have a mobile strategy, (2) Facebook’s attorney Fenwick & West knew about Leader’s app technology even before Facebook existed, and (3) Facebook chose not to disclose any of this knowledge in their S-1.
The Patent on Apps – A Decade In The Making
McKibben also told me that "This patent has been incubating for a decade.” I asked him why it took so long (after all Mark Zuckerberg was in high school back then). He said “I don’t know, but perhaps the timing is fortuitous because it serves to further illustrate the illegitimacy of our chief infringer’s claims.”
By “chief infringer” McKibben is of course referring to Facebook with whom Leader is currently locked in a patent infringement appeal at the Federal Circuit (not disclosed in the S-1). McKibben confirmed that Leader’s lead Silicon Valley-based attorneys Paul Andre and Lisa Koblialka with Kramer Levin (formerly with King & Spalding) will be filing a petition on that appeal shortly. McKibben said of this new patent, “We have been waiting for this patent for a very long time. We filed it way before the term ‘social networking app’ even existed.” He continued, “It is gratifying to be acknowledged for the originality of our invention of apps.”
McKibben added an intriguing twist which I will explore more in future posts. He said the term “social” is “too limiting” to the full scope of Leader’s invention. “We envisioned a much broader tool than the narrow scope that social apps are currently exploiting,” he said. “The market has not yet begun to experience the full benefits of our app invention, especially as it relates to the subjects of privacy, security and freedom from intrusion.” McKibben called these features “fundamental human rights.” This is certainly a refreshing message after being barraged all week with the message that privacy is dead.
I asked McKibben what prospective infringers should do in the face of this new patent. He said with a slight smile, “We’re in the phone book and we won’t bite.”
Stay tuned. Meep, meep.
Now back to my coverage of the Facebook stock debacle . . .
Fig. 1 – The Muppet’s Beaker has become the unofficial mascot of this blog. Pictured here is Beaker’s unenlightened twin brother Baker. Unlike Beaker, Baker follows the crowd. Business Insider carried this photo of Baker after he realized he had been Breyered by the Facebook cabal.
Beaker, the thinking twin brother of Baker, and unofficial mascot of Donna Kline Now!
If you did not think the revelations of insider impropriety pouring out of Facebook are not enough, here’s more.
Did you know that Facebook doesn’t even own the underlying technology platform that they rely on for their revenue? Where was that disclosed in the S-1? It wasn’t.
Did you know that the technology used by Facebook was stolen from inventor Michael McKibben and his company Leader Technologies. That’s right, on July 27, 2010 Facebook was found guilty on 11 of 11 counts of patent infringement U.S. Patent No. 7,139,761 owned by Leader Technologies. In other words, the software engine running Facebook is Leader’s property. Where was that disclosed in the S-1 you ask? It wasn’t.
Did you know that the Leader v. Facebook patent infringement case is currently on appeal in the second highest court in the land, and it is the only lawsuit against Facebook to get to trial in its history, much less to be escalated to the appeals level? Where was that disclosed in the S-1? It wasn’t.
Did you know that before Facebook’s lead attorney Fenwick & West was Facebook’s attorney, they were Leader Technologies’ attorney and had intimate attorney-client knowlege about Leader’s business and inventions? Where was that conflict of interest disclosed in the S-1? It wasn’t.
Did you know that Fenwick & West has filed over 700 patents for Facebook since 2008. In all those filings Fenwick did not disclose Leader’s technology as potential prior art to the US Patent Office, which might be fraud. Where was that risk disclosed in the S-1? It wasn’t.
Didn’t think so. Meep, meep.
These revelations beg the question, is anything in Facebook not riddled with insider deception?
* * *
Four days after the launch of Facebook’s IPO, their unscrupulous insider activities are FINALLY being reported in the major media. It’s too bad that it took millions of dollars of “muppet money” to finally bring the issue to light that I have been writing about for months.
Here is a sample of the coverage the insider activities are finally getting in addition to what I have written:
- Laura Mandaro. “Facebook’s Zuckerberg, Thiel sell shares.” The Wall Street Journal, Market Watch. May 22, 2012. Accessed May 24, 2012.
- Damien Hoffman. “Silicon Valley Must DISRUPT Wall St. for the Sake Our Country.” Wall St. Cheat Sheet, May 23, 2012. Accessed May 24, 2012.
- Tiffany Kaiser. “FINRA, SEC to Investigate First-Day Facebook Stock Problems.” DailyTECH. May 23, 2012. Accessed May 24, 2012.
- Jonathan Stempel and Dan Levine. “Facebook, banks sued over pre-IPO analyst calls.” Reuters, May 23, 2012. Accessed May 24, 2012.
- Michael Shulman. “10 Reasons To Short Facebook.” Seeking Alpha, May 24, 2012. Accessed May 24, 2012.
- Simon Constable. “Underwriters Make $100 Million on Facebook IPO.” The Wall Street Journal, Market Watch. May 23, 2012. Accessed May 24, 2012.
- Felix Salmon. “Morgan Stanley’s $2.4 billion Facebook short.” Reuters, May 21, 2012. Accessed May 24, 2012.
- Mark Cuban. “Facebook IPO Post Mortem – Killer – but not for the reasons you think!” blog maverick, May 23, 2012. Accessed May 24, 2012.
In addition, here’s my bibliography of posts relating to Leader v. Facebook where I have been warning about this brewing debacle for months. The way I see it, these issues regarding theft of intellectual property and corrupt insider activities are inseparable.
- Donna Kline. “The Facebook Debacle – More Undisclosed Insider Secrets.” Donna Kline Now!, May 24, 2012.
- Donna Kline. “Facebook IPO – Is the bubble over before it started?” Donna Kline Now!, May 18, 2012.
- Donna Kline. “Federal Circuit violates most basic tenents of GROUP ONE vs. HALLMARK CARDS re. validity of “on sale bar” evidence." Donna Kline Now!, May 15, 2012.
- Donna Kline. “ Congratulations, Facebook. See you at the Supreme Court?" Donna Kline Now!, May 8, 2012.
- Donna Kline. “Are Facebook insiders mocking the Business Judgment Rule?” Donna Kline Now!, May 3, 2012.
- Donna Kline. “James W. Breyer’s tangled web of insider trading – AKA – “You’ve been Breyer-ed”.” Donna Kline Now!, Apr. 27, 2012.
- Donna Kline. “Wal-Mart – Zynga – Facebook: Oh, the webs we weave.” Donna Kline Now!, Apr. 23, 2012.
- Donna Kline. “Facebook forces reexam order of Leader’s patent through USPTO Director’s office in wake of Instagram controversy.” Donna Kline Now!, Apr. 19, 2012.
- Donna Kline. “Instagram-scam?” Donna Kline Now!, Apr. 14, 2012.
- Donna Kline. “Facebook’s Orwellian (black-is-white) definition of “clear and convincing” evidence.” Donna Kline Now!, Apr. 11, 2012.
- Donna Kline. “Facebook countersues Yahoo with bogus patents? Confirms reckless mindset.” Donna Kline Now!, Apr. 6, 2012.
- Donna Kline. “Facebook “Liked” Leader’s source code … before it didn’t." Donna Kline Now!, Apr. 1, 2012.
- Donna Kline. “Proof Fenwick & West LLP did not disclose Leader as prior art to Facebook." Donna Kline Now!, Mar. 29, 2012.
- Donna Kline. “MF Global + JP Morgan + Goldman Sachs + Harvard Grads + Politics = A big mess.” Donna Kline Now!, Mar. 24, 2012.
- Donna Kline. “What Facebook, Accel Partners, Goldman Sachs and Fenwick & West don’t want us “muppets” to know.” Donna Kline Now!, Mar. 20, 2012.
- Donna Kline. “Make up your mind, Fenwick & West LLP.” Donna Kline Now!, Mar. 19, 2012.
- Donna Kline. “Muppet Mania – Customer disrespect at Goldman.” Donna Kline Now!, Mar. 15, 2012.
- Donna Kline. “Haughtiness in the face of “literal infringement.”” Donna Kline Now!, Mar. 9, 2012.
- Donna Kline. “Facebook ordered pharma users to allow comments, yet will not return phone calls now.” Donna Kline Now!, Mar. 7, 2012.
- Donna Kline. “First thoughts after leaving courthouse March 5, 2012.” Donna Kline Now!, Mar. 5, 2012.
- Donna Kline. “Judges Selected.” Donna Kline Now!, Mar. 5, 2012.
- Donna Kline. “Donna Kline. San Francisco CBS-TV KPIX Coverage.” Donna Kline Now!, Mar. 2, 2012.
- Donna Kline. “NBC-TV4 (Columbus) Interview with Leader founder Michael McKibben.” Donna Kline Now!, Mar. 2, 2012.
- Donna Kline. “How Facebook tricked the jury – YouTube.” Donna Kline Now!, Mar. 1, 2012.
- Donna Kline. “Did Someone Prod the Media?” Donna Kline Now!, Feb. 29, 2012.
- Donna Kline. “Facebook: The New ‘Too Big To Fail?’” Donna Kline Now!, Feb. 27, 2012.
- Donna Kline. “Big trouble ahead for the Facebook IPO? — PBR / YouTube.” Donna Kline Now!, Feb. 17, 2012.
- Donna Kline. “What happens on March 5th, 2012?” Donna Kline Now!, Feb. 17, 2012.
- Donna Kline. “More on FB’s S-1 omissions & other conflicts of interest.” Donna Kline Now!, Feb. 14, 2012.
- Donna Kline. “Big trouble ahead for Facebook IPO? Backgrounder.” Donna Kline Now!, Feb 12, 2012.
- Donna Kline. "My take on the MF Global debacle: It could have been a customer." Donna Kline Now!, Nov. 3, 2011.
Fig. 2 – Is Mark Zuckerberg propped up like a Potemkin Village?