Since 2010, PersonalWeb Technologies has filed a total of 79 district court cases against a variety of technology companies in the cloud computing space asserting its patent portfolio. In its most recent round of litigations, all filed in 2018, PersonalWeb alleges infringement by over 50 could-based companies for the use of Ruby on Rails open source software implementing the HTTP web protocol as well as Amazon Simple Storage Service (“S3”). Essentially, these are lawsuits targeting Amazon customers including Airbnb, Square, Reddit, Venmo, and Kickstarter, just to name a few. Specifically, PersonalWeb alleges that the defendants’ websites use a Ruby on Rails architecture to develop and compile webpage files to render a webpage and generate a fingerprint of content of the files when compiled which are uploaded to Amazon S3.
These customer lawsuits are a predictable outcome of a sparring match a few years back between Amazon and PersonalWeb. In 2011, PersonalWeb launched a lawsuit against AWS also alleging infringement by S3 and against Dropbox for using the S3 storage system to store files. Amazon mounted a successful defense which ultimately led PersonalWeb to dismiss the case outright. However, in the Order of Dismissal with Prejudice, Amazon retained the right to challenge validity, infringement and/or enforceability of the patents in suit in any future suit or proceeding. As such, Amazon did not obtain a license for itself or its customers, and seemingly recognized that their fight with PersonalWeb was not over.
In response to PersonalWeb’s flood of customer lawsuits, Amazon filed a declaratory judgment action against PersonalWeb on February 5, 2018. Amazon argues that “[a]ll the lawsuits are meritless because, in 2011, the same defendants [PersonalWeb] filed a suit against Amazon and AWS directly that accused the same technology of infringing the same patents, and those claims were dismissed with prejudice. Consequently, all of PersonalWeb’s subsequent customer suits are barred as a matter of law.” Generally, when a case is dismissed with prejudice, it means that the plaintiff is barred from bringing an action on the same claim. Amazon also asserts two other grounds for relief of its customers: (1) the Kessler doctrine which “bars a patent infringement action against a customer of a seller who has previously prevailed against the patentee because of invalidity or noninfringement of the patent” and that the 2011 dismissal provides Amazon and its clients with a “limited trade license” for use in commerce, and (2) non-infringement.
This declaratory judgement action is likely a result of the recent changes in the AWS Customer Agreement related to IP rights. These changes include offering IP indemnification protection to customers of AWS and removing a controversial IP non-assert clause. Having offered this new protection, it appears that Amazon is now playing cleanup for not securing adequate rights for its customers during the previously litigated case with PersonalWeb.
Now that Amazon has filed its declaratory judgment, it will be interesting to see whether PersonalWeb amends its customer-based complaints in an attempt to remove any encumbrance on the cases from its previous litigation with Amazon. Regardless, the latest salvo by PersonalWeb is another prime example of both customer-targeted patent litigation campaigns, and open source software commonly used in cloud services as the implicated technology.
Author: Heather Hedeen
Contributing Author: Bart Eppenauer