The Financial Accounting Standards Board has been sued for patent misappropriation and restraint of trade by a Silicon Valley technology company that has developed an alternative to fair value accounting.

Silicon Economics Inc. filed suit Wednesday evening against FASB, accusing the U.S. accounting standard-setter of acting like a monopoly by claiming rights to the San Jose-based company’s patented EarningsPower Accounting method and technology.

Silicon Economics responded in 2006 to a FASB invitation for public comment on one of its proposed standards. The company e-mailed its comments, including an explanation of its patented accounting method, which involves an equation derived from the present value equation of finance and credit/debit posting procedures to calculate instantaneous end-of-period asset and liability incomes and windfalls.

The following year, SEI president Joel Jameson was surfing FASB’s Web site when he noticed the terms and conditions, which said that FASB claimed rights to any and all intellectual property sent to the board via e-mail. Jameson contacted FASB to confirm that FASB was not claiming any ownership interest in his company’s “invention,” but FASB sent no reply.

Last fall, his attorneys contacted FASB, and FASB allegedly claimed that it had a royalty-free interest in the SEI invention and patent, “and categorically refused to release any such interest,” according to the complaint.

“They claim they own it, either because Silicon Economics disclosed it to them or that they have a royalty-free license to use EarningsPower Accounting and the underlying patent,” said Perry J. Narancic of Narancic & Katzman PC, in Menlo Park, Calif., the counsel for SEI. “The Web site terms and conditions state that anything someone sends via e-mail to FASB is basically owned by FASB. There’s a problem with that argument. As a Web site, the terms were never disclosed in the initial comment that Silicon Economics had responded to, and there was no disclosure of those terms or conditions in any dealing between FASB and Silicon Economics. Legally speaking, that cannot constitute a contract. You can’t agree to a contract you’ve never seen or heard of.”

FASB spokesperson Christine Klimek declined to comment when informed of the lawsuit. “It’s a legal matter, and our policy is not to comment on it,” she said.

SEI accuses FASB of acting like a monopoly. “Because FASB is a monopolist in the market for establishing financial accounting standards, their reliance on these terms constitutes a monopolistic position and restraint of trade,” said Narancic. “Relying on these terms, they’re effectively taking out a competitor, doing so unlawfully and based on unconscionable contract terms.”

The complaint acknowledges that FASB has been working with the International Accounting Standards Board on converging accounting standards and forming a global standard-setter, and that there are other groups involved in setting standards.

“The power and influence of these other market participants is very limited because FASB is the largest U.S. financial accounting standards-setting organization and because, almost, only its pronouncements are enforced by the SEC,” said the complaint.