Priceline Founder Sues Facebook for Patent Infringement

The parent company of Priceline.com, Walker Digital, claims that Facebook is infringing a patent having to do with anonymous communications, stored-value cards, or both.

Facebook has yet another patent infringement lawsuit on its hands, and this time the co-founder of Priceline.com, Jay Walker is claiming dibs.

His company, Walker Digital LLC, claims that its employees invented a system that some describe as governing anonymous communications. The actual patent looks like Facebook Credits gift cards.

According to Bloomberg Businessweek, Walker Digital invoked its ownership of patent number 5,884,271 within the lawsuit filed in U.S. District Court in Wilmington Delaware. While the media outlet suggested the contested invention concerns anonymous communications, the text sounds more like Facebook Credits on gift cards:

A universal electronic transaction card (“UET card”) is capable of serving as a number of different credit cards, bank cards, identification cards, employee cards, medical and health care management cards and the like. The UET card includes storage elements, an input interface, a processor, a display, and a communications interface. In a preferred embodiment, the UET card stores transactional information to eliminate paper receipts and includes security features to prevent unauthorized use. The UET card may also be used to replace conventional currency and traveler’s checks, and may be configured to store and display promotional information, such as advertising and incentives. The invention also includes systems for using UET cards, for example, health care management systems, communication interface units, and methods for using the same, including methods of issuing an account authorization to a UET card, a method of transferring transactional and account information between a UET card and a personal computer or a mainframe computer, a method of using the UET card as a remote terminal for a mainframe computer, and a method of conducting an electronic transaction.

In addition to parenting Priceline.com, Walker Digital has more than 200 patents that it licenses to other companies, including intellectual property related to payment cards, video games, wagering and Internet pricing. So one could see why the company would have an interest in Facebook Credits.

Walker Digital’s founder Jay Walker once had a net worth exceeding $4 billlion, largely attributable to Priceline.com stock, but lost most of that value during the dot-com crash that first hit about a decade ago. His company has since then diversified beyond Internet ventures, but his lawsuit against Facebook suggests he may want more of a piece of online social gaming and commerce.

But Facebook has more financial might than Walker Digital, so the better funded legal team would have the best odds of winning. Readers, what do you make of this lawsuit and its timing? Can a settlement with Walker Digital turn into an amiable business partnership?