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Rackspace, Red Hat Win Decisive Patent Victory

Red Hat, Inc. (NYSE: RHT) and Rackspace Hosting, Inc. (NYSE: RAX) announced today that they have won a federal court decision granting early dismissal of all claims in a lawsuit brought by the patent assertion entity Uniloc USA, Inc.

Plaintiff Uniloc USA, Inc. is a frequent litigator, having brought patent lawsuits against many high-tech companies including Adobe, Microsoft, Sony and Symantec. Rackspace provides its customers with managed servers running the Linux operating system. Red Hat, which supplies Linux to Rackspace, provided Rackspace’s defense as part of Red Hat’s commitment to standing behind customers through Red Hat’s Open Source Assurance program.

Uniloc USA, Inc. filed the complaint against Rackspace in June 2012 in federal court in the Eastern District of Texas. The complaint alleged that the processing of floating point numbers by the Linux operating system violated U.S. Patent 5,892,697. Rackspace and Red Hat immediately moved to dismiss the case prior to filing an answer. In dismissing the case, Chief Judge Leonard Davis found that Uniloc’s claim was unpatentable under Supreme Court case law that prohibits the patenting of mathematical algorithms. This is the first reported instance in which the Eastern District of Texas has granted an early motion to dismiss finding a patent invalid because it claimed unpatentable subject matter. In the ruling released today, Judge Davis wrote that the asserted claim “is a mathematical formula that is unpatentable under Section 101.”

“The early dismissal of this case delivers a clear message that patent assertion entities can’t expect quick settlements on weak claims, a tactic many patent assertion entities use to monetize questionable patents,” said Alan Schoenbaum, Rackspace General Counsel. “We salute Red Hat for its outstanding defense and for standing firm with its customers in defeating this patent troll. We hope that many more of these spurious software patent lawsuits will be dismissed on similar grounds."

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