public display of dis-affection: Avistar patents & Microsoft

In my experience, most of the substance of patent litigation, and the typical outcome, negotiated settlement, is hidden from the public: attorney-client discussions are privileged, experts are cautioned to be wary of items subject to discovery, settlement negotiations and details are privileged and usually subject to confidentiality agreements.

So the relatively public goings on between Avistar and Microsoft are more than curious. Comments on re-exam minutiae in Avistar’s February 25th press release, Microsoft Challenges Avistar Patents, seemed unnecessary within the usual rationale for such a release, investor relations. The March 26 release, Avistar Announces Cost Restructuring in Response to Patent Challenge by Microsoft was also successful in gaining trade press attention. This week’s Wainhouse Research Bulletin commented, “Avistar … published a rather odd press release (in our humble opinion) that the company was reducing its US and European workforce by 25% as a cost cutting measure prompted by Microsoft’s recent challenge to all 29 of Avistar’s US patents.” Also on Thursday, Redmond Channel Partner published Avistar’s Tale: Microsoft Shows Its Dark Side.

Is the venue the court of public opinion? If so, there may be Avistar detractors raising their voices. There are some in the videoconferencing a.k.a. “telepresence” industry rooting for Microsoft. They question the validity of U.S. patent 6,212,547, “UTP based video and data conferencing”, with an October 1, 1993 priority date, in light of a plethora of earlier systems including CU-SeeMe, the MBone, Intel’s prototypes, and the prior art cited by Microsoft’s re-exam request, the 1980’s Bell Labs “Rapport Multimedia Conferencing System”. They question the validity of 5,867,654, “Two monitor videoconferencing hardware”, in light of 1989 multiple monitor products from VTEL, and other historical practice, especially after last year’s KSR ruling.

An attorney representing Avistar visited me in 2004. He did not appreciate my opinion that the patents in question should not have been granted. I cringed later that year when Polycom paid Avistar $27.5M in a licensing agreement. A Polycom executive was apologetic when I questioned the amount. A Polycom competitor bemoaned Polycom’s unwillingness to stand up to Avistar. Last year RADVISION agreed to pay Avistar $4M, and Tandberg agreed to pay an undisclosed amount, probably about the same as the Polycom amount. So I do not see these re-exam requests as “Microsoft showing its dark side”.

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