Shell company sues Facebook, Amazon over targeted banner ads

A Memphis-based shell firm say it owns the rights to a common form of internet advertising, and has filed patent infringement suits against several major companies.

“B.E. Technologies LLC” claims that Amazon’s (s amzn) Kindle devices violate its technology for serving ads “in a personalized manner.” It has filed similar lawsuits against Facebook (s fb) and LinkedIn (s lnkd).

The patents in question date from 2000 and 2001 and describe the process of selecting interent ads based on what applications the viewer has been using on his or her computer. Here’s part of the abstract from US Patent 6,628,314 which B.E. Technologies claims Facebook is infringing:

A method and apparatus for providing an automatically upgradeable software application that includes targeted advertising based upon demographics and user interaction with the computer. The software application is a graphical user interface that includes a display region used for banner advertising that is downloaded from time to time over a network such as the Internet.  [..] when the user runs the program (such as a spreadsheet program), an advertisement will displayed that is relevant to the program (such as an advertisement for a stock brokerage).

The lawsuits raise the familiar question of whether the patent owner is an inventor who has been wronged by the giant companies or if this is just another instance of “patent trolling.” Under the trolling model, shell firms that don’t make anything acquire patents in order to demand money from companies that do. The prizes they collect then provide a war-chest to launch further lawsuits.

In this case, B.E. Technologies does not appear to conduct any other business besides litigation. Its patents also date from a period when the U.S. Patent Office issued a flood of notoriously flimsy patents. While many inventions appear obvious in hindsight, the idea described in BE Tcchnologies’ patent of serving internet ads based on user behavior may well have existed before the year 2000.

Facebook and Amazon are familiar with patent troll suits which can cost millions of dollars to defend. The troll suits, however, are also increasingly being aimed at start-up companies who have less cash to divert from developers to lawyers.

Here’s a copy of B.E. Technologies complaint against Facebook which requests damages and an order that the social network be barred from using the technology in question:

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