| Red Hat dragged into patent scuffle |
Jul. 07, 2006
Red Hat Inc., the leading Linux distribution company, is facing a patent infringement from FireStar Software Inc., an object-transaction and business process integration company.
FireStar is asserting in its suit that JBoss's Hibernate 3.0 infringes its 2000 U.S. Patent No. 6,101,502. This patent details a method of interfacing an object oriented software application with a relational database. Hibernate is a Java-based object/relational persistence and query service and is part of the JEMS (JBoss Enterprise Middleware System).
The Massachusetts-based FireStar filed its suit in the Eastern District of Texas Federal Court. This Court is noted for its pro-patent holder track record. FireStar is asking the court (PDF download) to order Red Hat to cease infringing its patent, destroy all materials that use the patent, and, since Red Hat / JBoss has willfully violated its patent, pay triple the losses FireStar has incurred due to the alleged infringement, plus its legal costs.
The choice of venue and the lawsuit's timing are no coincidence, according to Martin Zoltick, an attorney at the Washington, DC-based Rothwell, Figg, Ernst & Manbeck P.C, an intellectual property boutique law firm.
"The timing of the lawsuit just after the acquisition by Red Hat of JBoss, and the venue in which the lawsuit was filed are significant. FireStar has positioned itself as the plaintiff-patentee in what is currently the most favorable jurisdiction in the country for patent holders (i.e., the Eastern District of Texas), and now has a much deeper pocket defendant-accused infringer as its target (i.e., Red Hat)."
Red Hat, which has a history of opposing software patents, said, in a statement, that the company "is very aware of the situation and we are working through the proper legal channels to resolve it."
Some lawyers have observed that if Red Hat has indeed violated this patent, it's only one of many companies that have done so. So, why target Red Hat?
Thomas Carey, chairman of the business practice group at Boston-based law firm Bromberg & Sunstein LLP, laid out decision factors for the patent suit and showed how Red Hat came up.
"A patent plaintiff considers a number of factors in selecting a defendant. Among the factors are: 1. How clear is the evidence of infringement (i.e., how strong is the case)? 2. Does this particular defendant have potential counterclaims against us (including patent infringement counterclaims)? 3. Is this defendant likely to put up a scorched earth defense, or is it inclined to settle? This may be affected by the financial resources available to the defendant. Oracle may be less bothered than Red Hat by a $5MM legal bill. 4. If we win, does this defendant have the money to pay us?"
"In a sense, questions 3 and 4 lead the plaintiff to a Goldilocks solution. The plaintiff wants the defendant to be not too big and not too small, just right. Red Hat is just right."
Florian Mueller, founder of NoSoftwarePatents.com, which fights patent law, wrote in his blog that, "It seems to me that the FireStar patent is quite broad, and if it is upheld, it will affect other companies as well. ... In this specific case, however, the fact that an open source program is at the center of a patent infringement suit appears to be a coincidence."
Zoltick expects Red Hat to fight the suit on the grounds that the patent is invalid. "The Complaint does not identify any 'evidence' alleged to support FireStar's infringement claim and, therefore, the strength or weakness of that claim cannot be judged at this early stage. With that said, however, I would expect Red Hat to deny infringement and to assert affirmative defenses and counterclaims seeking a determination that FireStar's patent, which was issued in 2000, is invalid."
Red Hat could do this because while "Under U.S. Patent Law, an issued U.S. patent is presumed to be valid. However, patent validity can be challenged and, in this case, significant prior art from Borland and Oracle has been identified that may bolster Red Hat's invalidity defense," Zoltick added.
Carey, however, thinks that Red Hat might just put up the white flag and elect not to fight this patent battle.
"The merger agreement with JBoss called for an escrow of $43-million to protect Red Hat against breach of the representations and warranties in the merger agreement, including the representation that its products do not infringe third party patents. Ordinarily the JBoss shareholders, who are the ones who are really at financial risk, would get to control the litigation. But the merger agreement says that where an injunction is possible, Red Hat controls the litigation," explained Carey.
He continued, "FireStar has asked for an injunction. Thus, Red Hat has $43-million of play money to make this problem go away. While things are never that easy, this situation makes Red Hat potentially a very pliant defendant. And since Red Hat has never fully partaken of the anti-patent Kool-Aid, they might just settle the lawsuit and take a license from FireStar, but not without looking diligently at the prior art, which many true believers in the open source community will proffer in great quantities."
Even if Red Hat settles, that may not be the end of FireStar's patent lawsuits.
"The proprietary software community ... will be checking its software for evidence of infringement of the FireStar patent. If they find infringement, they may next look for prior art that would invalidate the patent. The proprietary software companies will not act in a unified fashion because the situation is too complex. Instead, each will look after its own hide," observed Carey.
Looking ahead, Zoltick thinks we're only going to see more of these patent lawsuits.
"Given the increasing rate at which software patents are issuing and the ultra-competitive landscape in the software industry today, we are going to see a trend of more and more of these kinds of lawsuits," said Zoltick. "Open source providers are fair game as software patent infringement targets and I expect that companies looking to gain a competitive advantage by way of an injunction or a revenue stream from damages or licensing will leverage their patent portfolios to do so."
This, in turn, will give the Free Software Foundation's push for an anti-patent clause in the upcoming GPL 3 open-source license a boost, according to Zoltick.
"The Free Software Foundation attempts to justify the patent retaliation clause of GPL v3 by referring to an 'explosion' in the issuance and use of software patents and the FSF's overarching goal of making sure that users really get the 'four freedoms.' I would expect that the FSF and other supporters of GPL v3, as well as the anti-software patent promoters, will use this lawsuit as a vehicle to illustrate why the patent retaliation provision of GPL v3 is important and necessary," Zoltick said.
-- Steven J. Vaughan-Nichols
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