What may prove to be a critically important legal decision has just been made in Texas, effectively dismantling some patents owned by a company called Eolas. This firm is a non-producing entity built around the IP of Michael Doyle, and it’s been labeled a patent troll, thanks to its attempts to gain money from standard web technologies.
What kind of patents does Eolas own? “Interactive” features of the web, which is a broad term that can cover all kinds of web interactions, including playing a video online or allowing shoppers to look at their potential purchases.
Eolas is said to have reached deals with Apple, Google, Yahoo, Amazon, Adobe, eBay, and many other big names in modern web technology over the years. The actual amount extracted in licensing fees and court settlements is not known, but by the time the patents were challenged in court in 2012, the figure sought by Eolas is assumed to have been up to $1 billion. A jury found in favor of the case defendants (Yahoo, Amazon, and others) and Eolas appealed the decision at length, but three judges have now affirmed the jury’s decision. This may be the end of the Eolas patents.
Patent trolling, which acts as a de facto tax on many modern innovations, is increasingly perceived as a threat to the U.S. economy, and in recent years entrepreneurs have pressured Congress to act on the matter. Recently the president outlined his plan to reform some aspects of the patent system to stamp out trolling and prevent the filing of spurious or abusive patents that could lead to trolling.