The Irvine-based Northern American computer unit of Japan’s Toshiba Corp. has prevailed in an area few have dared to tread: taking on patent holder Acacia Research Corp. of Newport Beach.
Toshiba America Information Systems Inc. recently won a federal patent infringement lawsuit brought by Acacia’s Computer Docking Station Corp. subsidiary.
The decision was upheld on appeal last month.
The loss is rare for Acacia, which acquires patents and then seeks to get royalties for their use from technology and other companies.
Acacia’s 40 workers mostly are patent experts, lawyers and engineers. Critics call the company a “patent troll” that uses the courts as a way to induce settlements. Most companies end up settling rather than go through the hassle of fighting Acacia in court.
Recent settlements include those with Time Warner Inc.’s AOL, Matsushita Electric Industrial Co.’s Panasonic and Siemens AG.
Toshiba, which sells laptop computers, digital cameras and other electronics, opted to fight the Acacia lawsuit in a bid to deter future frivolous litigation, according to Vito Canuso, a litigation partner who represented Toshiba from Irvine-based Knobbe Martens Olson & Bear LLP.
Canuso worked with Toshiba along with Knobbe Martens partners Ted Cannon and Joseph Re.
“Sometimes the settlement value is so small and it becomes an easier alternative,” Canuso said. “But in this case it was silly not to fight back. Toshiba decided to dig its heels in because it didn’t want to fund future lawsuits.”
Canuso, who is set to leave Knobbe this month to become a lawyer for Irvine heart valve replacement maker CoreValve Inc., said he hopes Toshiba’s actions send a message.
“Often the battle is worth fighting,” he said.
Robert Stewart, Acacia spokesman and vice president, said his company was disappointed with the outcome of its legal battle.
“We’re disappointed but we respect the appeals court’s decision,” Stewart said. “We continue to grow and there’s a huge unmet need for small companies to link up with Acacia to monitor their intellectual property.”
The company has expanded its business in recent years to offer legal services to other patent holders. In addition to seeking royalties for its own patents, Acacia works as a patent law firm for smaller companies, bringing suits against alleged offenders of their patents. It splits sales and licensing fees with the original developers of the patents it holds.
Acacia sued Toshiba and a number of other laptop makers in early 2006 for allegedly infringing on a patent for a “portable microprocessing system.”
Dell Inc. and Gateway Inc., an Irvine computer maker that’s now part of Taiwan’s Acer Inc., also sought to fight rather than settle with Acacia.
A federal court in Wisconsin also sided in favor of Dell and Gateway.
Computer Docking’s patent covered computers without built-in display screens and keyboards. Since the laptops made by Toshiba, Dell and Gateway had built-in screens and keyboards, the court ruled their products didn’t violate Computer Docking’s patent.
As with Toshiba, Dell and Gateway, Acacia loses a battle here and there.
In November, Acacia lost a case against Microsoft Corp. after a Texas jury decided that an Acacia patent that speeds up computers wasn’t infringed on and is invalid.
