Twitter Holds Ground In Patent Suit — And Wins

You’ve heard this one before: a lawyer obtains a spurious patent and demands a major company to pay him handsomely for infringing it. This time, though, things did not go as planned for the lawyer, who said he owned a “method and system for creating an interactive virtual community of famous people” (or what some might call meeting other people on the internet).

On Monday, a jury ruled that Twitter did not infringe a patent held by VS Technologies, a shell company created by the lawyer as a litigation vehicle. And in a rare triumph of common sense for the patent system, the jury also reportedly found that the patent was invalid because it did not describe a new invention. The outcome backed Twitter’s argument that assembling a community on the Internet is not a new idea and that the “invention” had already been disclosed by companies like Who’s Who and GeoCities.

The verdict is a big win for the micro-blogging service, which had to litigate the case in Virginia, far from its home turf in San Francisco. Patent plaintiffs often sue Silicon Valley companies in distant venues like East Texas where juries may be unfamiliar with technology and may harbor prejudice against firms accused of stealing someone’s property.

In the last decade, shell companies like VS Technologies operated by lawyers have filed hundreds of cases against tech giants like Google (NSDQ: GOOG) and Facebook and won verdicts in the tens or hundreds of millions. Often the firms will settle rather than incur the $5 million it can cost to take a patent case to trial. In this case, Twitter stood its ground, joining Yahoo! (NSDQ: YHOO) and Microsoft (NSDQ: MSFT) among firms who have fought and won recent “patent troll” cases.

“While we would prefer to compete on the Internet rather than the courtroom, we will continue to vigorously defend groundless patent lawsuits filed against us,” a Twitter spokesperson told Bloomberg News.

The patent in question was issued in 2002 and describes the process of meeting like-minded people on the internet. For the lawsuit, Twitter produced numerous examples of websites that offered a similar feature.

The VS Technologies patent is an example of a “business method patent,” a controversial type of “invention” that began to flood the US. Patent Office after a Supreme Court ruling expanded the type of subject matter that was eligible to be patented. One notorious example is a “method for swinging on a swing.” In recent years, the legal system has began to moved to check the influence of these patents. The Supreme Court in 2007 lowered the bar for rejecting a patent as obvious and last year questioned the scope of business method patents. That case, known as Bilski, has come to be seen as inconclusive and the Court will revisit the issue again this December in a medical case called Prometheus.