Court dismisses Microsoft co-founder Paul Allen’s patent infringement claims as Yahoo lays off hundreds of workers

Microsoft co-founder Paul Allen, who in August launched a range of legal attacks against some of the tech industry’s biggest players including eBay, Facebook and Apple, has had his case dismissed from court.

Allen argued that certain patents relating to eCommerce and searching technologies belonged to his company, Interval Research Corp, and that these companies owed him and his company royalties for using them.

US District Judge Marsha Pechman said in her dismissal that Allen’s suit was too vague, and did not give enough details that would amount to infringement allegations. She added that Allen did not specify which of the competitors’ products infringed on those patents, and that this vagueness would leave the defendants “to guess which devices infringe”.

She also said the claims were “too generic”, and were “little more than labels and conclusions”, and that there needed to be “greater factual detail as to the conduct or devices”.

Allen, who is one of the world’s richest people with a fortune of $US13.5 billion according to Forbes, plans to keep pursuing the case. Pechman gave him until December 28 to return to court and make another claim that specifies each alleged patent infringement with more detail.

“The case continues to move forward,” Interval spokesperson David Postman told the ABC in the United States.

The case is typical of the current environment in Silicon Valley, where various tech companies are suing each other for alleged patent infringements. Many, including Microsoft, Apple and Google, say other companies are using patents without permission, but these cases are becoming more common as the software in dispute becomes much more commonplace.

In this particular suit, Google, YouTube, Apple, Facebook, Yahoo, AOL, eBay, Netflix and OfficeMax are all accused of using four specific patents relating to eCommerce and searching technology. One patent covers technology that provides recommendations for users based on their purchase history.

Allen founded Microsoft with Bill Gates in 1975, but left after being diagnosed with cancer. He was successfully put into remission, but founded Interval in 1992 in order to develop new technologies, filing for hundreds of patents.

So far, none of the companies have made an extensive reply to the dismissal. Earlier this year, Google said in a statement that the lawsuit reflects “an unfortunate trend of people trying to compete in the courtroom instead of the marketplace”.

Meanwhile, Yahoo has laid off hundreds of workers in a move that slashes its entire workforce by 4%, with the company hoping to consolidate several of its departments in order to cut costs and boost revenue.

According to the Financial Times, Yahoo is now notifying hundreds of employees who will be laid off within the next few days. This comes after a similar purge was made during early 2009, although chief executive Carol Bartz later said that another round of job cuts was not planned at that time.

However, the company has come under financial hardship and advertising revenue has slumped. According to eMarketer, the company only has about 16.2% of the display ad market, compared to 16.5% in 2009.

“Today’s personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace,” Yahoo said in a statement.


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