A tiny Baltimore tech company is suing Facebook, alleging that Facebook infringed on a key patent it holds. The case could cut to the heart of the online social networking giant's business.
WhoGlue Inc., a Canton company with fewer than five employees, filed the lawsuit Monday in the U.S. District Court for Delaware, where Facebook is incorporated.
WhoGlue makes and sells software for associations and nonprofits to help them manage their memberships via the Internet. The company holds a patent for what is described in the filing as a system for "facilitating communications between user members of an online network."
WhoGlue applied for the patent in 2001 - three years before Facebook, which has more than 300 million users across the world, was founded - and received it July 17, 2007.
"We didn't call it social networking because that term hadn't been invented," said Jason D. Hardebeck, founder and chief executive of WhoGlue.
In a one-sentence e-mail statement to The Baltimore Sun, Facebook spokeswoman Elizabeth Linder indicated that the company would defend itself.
"We see no merit to this suit, and we will fight it vigorously," Linder said.
It's unclear whether the patent infringement case that WhoGlue is trying to make against Facebook can be applied to a host of similar social networking sites that use similar technologies for helping their users manage online interactions.
In an interview, Hardebeck declined to comment on the substance of the lawsuit, but he acknowledged that his company could face some public criticism for trying to defend the patent in court. The patent covers the process for the way members of an online community manage their public and private interactions on a Web site.
The patent is a key part of WhoGlue's business, and the lawsuit is meant to protect his company's livelihood, Hardebeck said. WhoGlue is seeking unspecified monetary damages and a permanent injunction against Facebook from infringing on its patent, according to the lawsuit.
"We didn't patent something that we thought would be an opportunity to license" to other companies, he said. "We patented it because it was core to our business."
The company, which has its offices in the 2400 block of Foster Ave. in Southeast Baltimore, was founded in 2000 by Hardebeck, who has a background in nuclear engineering. The 44-year-old from Towson is a graduate of the U.S. Naval Academy and holds an MBA from the Johns Hopkins University.
"This has always been our business," Hardebeck said. "Only recently did the big networks come to the conclusion that not everyone wants to share everything with everyone."
Facebook, a major social networking Web site based in Palo Alto, Calif., was founded in 2004 by several Harvard students. The site quickly grew from the college scene to the general public and now has more than 300 million active users. It has applied for several patents but does not currently hold any.
Its rampant popularity has made it somewhat of a target for lawsuits, including a highly publicized battle between Facebook's founders and other Harvard students who claim their idea for a social networking site was stolen.
WhoGlue, which counts U.S. Lacrosse, a national sports association based in Baltimore, as its biggest customer, has retained Ray Niro, a renowned patent lawyer out of Chicago.
Patent fights can end up costing $1 million or more for each side. "Patent litigation is expensive because it's complicated," said Max Oppenheimer, a law professor at the University of Baltimore who specializes in patents. Such cases typically require the use of highly trained - and expensive - engineering experts and litigators, he said.
For a company to survive, it usually needs either deep pockets or a law firm willing to take up the fight on a contingency-fee basis, Oppenheimer said.
"It's not a question of whether the patent is valid or not," Oppenheimer said. "It is: Can you stay in the game long enough to get the court to rule on it?"
Since WhoGlue holds the patent and has filed an infringement claim, the defendant - Facebook - now must show that the U.S. Patent and Trademark Office erred in issuing the patent, Oppenheimer explained.
"When a patent is issued, it has a presumption of validity," Oppenheimer said. "So the burden is on the defendant to show the agency made a mistake. ... The system is tilted in favor of the patent owner. [The courts] start with the presumption that the government did its job properly."
According to WhoGlue's patent, the company designed an information management system for "facilitating communications between user members of an online network," where users can customize their relationships with other members.
