Internet companies are hit with patent suits regularly-often in inconvenient venues-and they’d all be a lot happier if those lawsuits were all heard in the relatively tech-friendly courthouses of Northern California. But that’s not going to happen anytime soon. Twitter made a novel argument as to why the most recent patent lawsuit against it should be moved from Virginia to San Francisco-but the judge isn’t having it.
Twitter’s argument was that because the plaintiff in the case, Dinesh Agarwal, was a Twitter user himself, he had agreed to Twitter’s terms of service-which include a clause that says all lawsuits must be brought against it in San Francisco.
On Tuesday, U.S. District Judge Henry Morgan ruled against Twitter, finding that his own court in Alexandria (Va.) is the more appropriate place to hear the lawsuit. First, he found that Twitter’s contract regarding where lawsuits must be heard didn’t necessarily apply to patent suits. Another concern: allowing a transfer for Twitter would encourage every social networking company defending a patent suit to start disputes over which, if any, of the plaintiff’s employees were registered on the network. That situation “would potentially foster satellite litigation in every patent case involving a social networking market participant.” (Hat tip to the Docket Navigator blog.)
You’ve got to give Twitter credit for making a bold hail-mary pass on this one, although it didn’t quite make the touchdown. If the judge had accepted its argument, an uber-popular site like Twitter or Facebook would be in a great position to move a large proportion of its patent disputes to “home court.”
Agarwal is suing in the district he has lived in for more than 25 years, and he’s not seeking out a location foreign to both parties (like East Texas), so Twitter was facing a high bar to move this case.
This little locational clash has revealed one interesting thing: Agarwal’s twitter account! He has precisely zero tweets but his profile does tell us that in addition to being a patent lawyer, Agarwal is an aspiring screenwriter. In a declaration, Agarwal says he signed up for Twitter in January 2010 mainly for the purpose of determining whether the service infringes his patent. Later that year, he founded VS Technologies, a shell company to hold this patent and pursue the lawsuit against Twitter.
Agarwal’s patent, on a “method and system for creating an interactive virtual community of famous people,” is one that created a lot of eye-rolling on patent-skeptical tech blogs. To boot, Agarwal is a patent lawyer, and handled the paperwork for this patent application himself. He’s a patent-industry insider using patents to demand royalty payments from the tech industry-an increasingly common situation.
In its short life as a company, federal court records show that Twitter has been sued for patent infringement four times. In addition to this lawsuit brought by VS Technologies, Twitter is facing an ongoing patent lawsuit filed by Cooper Notification in 2009. Twitter settled a patent lawsuit brought by TechRadium in 2009. A fourth lawsuit, filed in 2010 by a lawyer-controlled patent-holding company called Stragent LLC, dropped its claim against Twitter without explanation.
» VS Technologies v. Twitter Complaint [PDF]
» Twitter’s Motion Requesting Transfer [PDF]
» Order Denying Transfer [PDF]