When Patents Attack: Could Facebook Be Next?

Paul Maritz has witnessed a number of patent skirmishes. The chief executive officer of VMware spent 14 years at Microsoft, much of it during the 1990s when the company was quickly extending its dominance and threatening older technology powerhouses. He remembers visiting Hewlett-Packard, Digital Equipment Corp., and other behemoths to essentially pay obeisance, ponying up for licensing deals that gave Microsoft access to key intellectual property—and kept the Redmond (Wash.) company from prolonged legal battles. “We had to do that,” says Maritz. “We were the new kids on the block.”

He sees a similar dynamic playing out in the tech industry today. So far, Silicon Valley’s rising stars—companies such as Facebook, Twitter, Zynga, LinkedIn, and other social media darlings—have mostly avoided becoming casualties in the ongoing patent wars, which have centered on the world of mobile devices. Yet as Maritz puts it, “When the continents shift and new players come into a space, it results in an unstable situation.” According to legal experts and technology executives, plenty more patent confrontations loom. Older technology companies such as Oracle, IBM, and Microsoft maintain rich patent portfolios covering essential technologies used by the Web set, especially database and file-management applications. “The new-generation companies like Google, Facebook, and LinkedIn will eventually run afoul of the established companies,” says Timothy D. Casey, a former patent lawyer at Apple and co-founder of the SilverSky Group, an intellectual property and business strategy consultancy. “It’s a familiar pattern in the technology industry.”