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Facebook Still Risks Having To Reveal Its Entire Source Code To Leader Technologies

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An update to our earlier report about the recent ruling of a Magistrate Judge from Delaware’s District Court, who ordered Facebook to give the decidedly low-profile company Leader Technologies access to its entire source code base based on alleged patent infringement. The case is still ongoing.

Court documents dated September 4 were posted on RealGeek.com this morning and reveal that Facebook’s prompt objections to having to reveal its entire source code the first time has been rejected. The renewed court order again obliges the social networking company to give Leader full access to its source code, but still under very strict conditions (more on that later).

This renewed court order does not mean Leader Technologies, dubbed a ‘patent troll’ by tech blog Venturebeat when it first caught wind of the case back in November 2008, can crack open the champagne just yet. (also see update with Facebook statement below)

Background

The suit revolves around alleged infringement of this patent (PDF), No. 7,139,761, issued by the USPTO on November 21, 2006. The patent generally relates to a method and system for the management and storage of electronic information. Leader Technologies has sought unspecified damages and an injunction against Facebook for willfully and deliberately infringing on the patent, and initially found a sympathetic ear with District of Delaware Magistrate Judge Leonard Stark: Facebook was forced to provide Leader with a hierarchical map of its source code by the end of July, and the entire code by August 21.

Facebook in a statement said it disagrees with the opinion of the judge, is appealing the order, and says it will fight the “merit-less” suite aggressively. Facebook asked for a stay of the order until its appeal could be heard by a higher judge, but the lower court denied that stay saying essentially that Justice must move on.

Update on the case

According to the latest public Court Order document dated 4th September 2009 (embedded below), Facebook objections were denied and the company will still need to produce its entire source code for Leader’s review no later than September 15, 2009. The Court makes it clear that it believes Facebook to fully understand Leader’s infringement theory and finds the company’s contentions that it will be irreparably harmed by giving access to its entire source code non-persuasive.

The judge rejected Facebook’s arguments that it would be irreparably harmed by having to reveal its source code because of the protective measures under which the code would be reviewed—in a secure room with no Internet access at a location of Facebook’s choosing on a secure computer. Leader’s lawyers and experts reviewing the code would be bound by a court-ordered confidentiality agreement and will only be able to take hand-written notes.

You can still expect Facebook to fight this one tooth and nail just for fear of this setting a new precedent every time it gets sued.

The company is currently formulating its response to the posting of the documents and its content; we’ll update once they get back to us.

Update with Facebook’s statement:

“It is extremely common in software intellectual property cases for there to be some form of source code review. In this case, the review is subject to a very restrictive protective order, which limits what they see and what they can do with any information they glean from review. Further, plaintiffs’ do not receive the code but merely get to inspect it.”

http://viewer.docstoc.com/
Facebook Ordered To Give Leader Its Source Code

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