There is an old saying, “first come, first served.”   In the world of intellectual property law, this happens to be a multi-billion dollar issue. The good news is that eight ordinary citizens in the east Texas town of Tyler today scored one for the home team when it comes to who had first rights on creating the “interactive web.”  

In a case that saw both sides spend a fortune and where a veritable who’s who of the technology field appeared as witnesses, it took the jurors just a few hours to rule that an obscure Chicago biologist named Michael Doyle and his patent holding (troll company) Eolas Technologies were not first as they claimed. This meant that defendants Google, YouTube, Yahoo, Amazon, Adobe, JC Penney, CDW Corp. and Staples (News - Alert) were off the hook on paying Eolas damages that could have totaled more than $600 million. 

It is a decision sure to draw frowns from those who settled with Eolas which included: Apple, Argosy Publishing, Blockbuster, Citigroup, eBay (News - Alert), Frito-Lay, JP Morgan Chase, New Frontier Media, Office Depot, Perot Systems, Playboy Enterprises International, Rent-A-Center, Sun Microsystems (bought by Oracle (News - Alert) while this litigation was underway), and Texas Instruments.

The history of “who came first” claims 

For those keeping score at home, for the record below is a short synopsis of what this was about. 

Doyle and co-inventors David Martin and Cheong Ang, claimed that  their “Visible Embryo Project,”  conceived at University of California San Francisco in 1993 — which they began demonstrating it in November 1993 — was a system that allowed doctors to view and interact via a browser with photographs from the famous Carnegie Collection, an exhaustive treasure trove of pictures on human embryos at various stages of development.

• In 1994, the inventors signed an invention disclosure form with the University that resulted in the issuance of a patent in 1998.
• Eolas was created to collect licensing fees. Doyle owns 40 percent of the company, Martin eight percent; Ang’s holdings have not been revealed, but the University of California has an estimated 25 percent and hence he has not been an innocent bystander much to the anger of the industry.

The defense, for its part, called several industry luminaries including recognized web pioneer Tim Berners-Lee, and Sun Microsystems (News - Alert) (now part of Oracle) engineer Pei-Yuan Wei. During the trial, the latter said he had conceived of making interactive features viewable through a very early version of a web browser as early as 1991. This was the foundation for the claim that Eolas could not have been first.

It is not necessary to go through all of the ups and downs of this case. It is noteworthy that right up until the verdict there was deep concern in the industry that the defense case was a bit weak. The reason was because of their inability to find old code to prove their point and the Judge’s refusal to admit certain evidence. In fact, the lack of strength seems to have been the rationale behind all of the earlier settlements.

 It did come out in testimony, however, that the Eolas invention appeared to be mostly a takeoff on the then-emerging Mosaic browser which became the foundation for Netscape. Ang countered he had done significant modifications worthy of a patent.

Who was first? It came down to 1991 versus 1993 and 1991 prevailed overturning the Patent Office’s decision that Eolas had been infringed by defendants.  

Why this was so important

This case was highly watched and crucial for one simple reason. It came down to a question of whether,r based on U.S. Patent Law, it was going to be possible for Eolas to in effect “own the web.” 

To say this would have a chilling effect would be an understatement. Possibly more to the point, as we all know from the headlines, the number of companies that have been created to do nothing but hoard patents for the sole purpose of what many think is extortion of licensing fees has mushroomed over the years. Many, if not most, of these companies have aggressively pursued their “rights.”  This has clogged courts, stifled innovation and slowed the time to market of new products. Indeed, it was the anger that these companies were contributing nothing in terms of innovation from their patents ownership that finally saw a broad bi-partisan group of legislators after decades of debate finally pass and have the president sign into law patent reform legislation in September 2011.  

It is hard to say whether this case will measure up to the dispute between Alexander Graham Bell and Elisha Gray over who filed first with the U.S. Patent Office on February 14, 1876 for the patent on the telephone. While Bell got the patent, many to this day think Gray deserves the credit. The point is that being first by a few hours turned into something much bigger. 

The good news here is not only that the jury appears to have come up with the right decision based on who came first, it also hopefully stops the now over a decade concern that someone might actually “own” the Internet based on the fact that interactivity is so critical to its structure and value. 

Is this going to stop IP trolls, especially those with what may be critical IP in the wireless industry? It is hard to be that optimistic. In fact, despite today’s news to the contrary that Microsoft (News - Alert) and Google want to place nice with others regarding IP licensing, trolls may be quiet for the moment they and the big guys are going to keep fighting. There is just too much at stake.

The Texas Department of Transportation has a famous slogan, “Don’t Mess with Texas.” It has transcended its original purpose to deter people from littering the state’s highways, and taken on a life of its own in a variety of contexts. That would include this case.