December 13, 2010, 4:45 PM

A patent lawsuit backed by billionaire Paul Allen suffers a setback

The court dismissed the case, but Interval Licensing will file again

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A federal court judge has dismissed a lawsuit by Microsoft Corp. co-founder Paul Allen that claimed several big Internet and retail companies infringed on his research and development company’s site search patents.

In August, Interval Licensing LLC, an Internet and information technology research and development firm co-founded by Allen in 1992, filed suit against 11 e-commerce and retail companies, including AOL Inc., Apple Inc., No. 4 in the Internet Retailer Top 500 Guide, eBay Inc., Facebook Inc., Google Inc., Netflix Inc. (No. 14), Office Depot Inc. (No. 5), OfficeMax Inc. (No. 7) and Staples Inc. (No. 2). The suit alleged that the companies violated Interval Licensing’s patents “for a browser for use in navigating a body of information” and three other patents related to “categorizing, comparing and displaying segments of information.”

But late Friday, Judge Marsha J. Pechman for the U.S. District Court for the Western District of Washington ruled that Interval Licensing didn’t provide enough detail to supports its claims for patent violations. “The plaintiff’s complaint lacks adequate factual detail to satisfy the dictates,” Pechman wrote in her ruling. “Threadbare recitals of the elements of a cause of action do not suffice.”

The court filing also notes that Interval Licensing intends to re-file an amended complaint in time to meet a Dec. 28 court deadline. A hearing on a new schedule for an amended complaint is set for later this week.

The e-commerce and online retailing markets continue to be beset with major patent infringement cases. Online consumer electronics retailer Newegg Inc. (No. 12) is appealing its patent infringement lawsuit over shopping cart software and other related e-commerce applications brought three years ago by Soverain Software LLC. Soverain Software also has a similar ongoing suit against several other big web retailers in the U.S. District Court for the Eastern District of Texas.

But in cases such as the one brought by Interval Licensing, judges—and juries—are now looking for more evidence and supporting detail from the companies initiating the patent infringement, says Peter Brann, a partner with Lewiston, ME-based law firm Brann & Isaacson who specializes in intellectual property litigation on behalf of Internet retailers and other direct marketers. “Courts and judges are looking for greater levels of detail from the companies filing the infringement suits to explain the plausibility of how their patents are being violated,” says Brann.

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