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The baffling claim against Facebook

Sep 17, 2012

FORTUNE -- Eolas Technologies and the University of California filed a lawsuit this week against Facebook (fb), Wal-Mart (wmt), and Disney (dis), apparently based in part on a patent that a court had previously ruled Eolas could no longer use to claim infringement.

Eolas spent most of the 2000s suing Microsoft (msft) in an ultimately successful patent complaint. (Microsoft settled in 2007.) Then it sued a multitude of companies including Google (goog), Yahoo (yhoo), Amazon (amzn), J.C. Penney (jcp), Perot Systems, Blockbuster, eBay (ebay), Citigroup (c) and several others. Most settled, but Google, Yahoo, Amazon and J.C. Penney stayed firm and ultimately beat back the lawsuit.

The term "patent troll" might sound derogatory, but Eolas pretty much fits the commonly understood definition. It developed some technologies for interactive Web processes back in the early 90s and since then has spent most of its time and money filing patent lawsuits based on those technologies. The idea is to file lawsuits and hope companies will either agree to license the technologies or pay a settlement. Because of the time and money involved in defending lawsuits, many companies simply cave, whether or not they feel the claims have merit.

MORE: An audience with the King of the Patent Trolls

The new lawsuit claims that the three companies are infringing on four patents on technologies enabling interactivity and embedding of media. Eolas was founded to protect patents on technologies Doyle and others had developed at the University of California, San Francisco. The university issued a statement that it "should be paid a fair value when a third party exploits [a] university asset for profit." A Facebook spokesman told Reuters the lawsuit is without merit and the company "will right it vigorously." Eolas has not yet replied to a request for comment by Fortune.com.

A Texas jury in February declared two of the four patents invalid in February. That led TechDirt's Michael Masnick to proclaim: "The Web is saved." Not quite yet, apparently. It's unclear why Eolas and the University are nevertheless filing a lawsuit based in part on patents that have been ruled invalid.

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