Looks like the battle for e-reader dominance between Amazon and Barnes & Noble could soon expand beyond the recent spate of price drops and into the courtroom as well: the USPTO just granted a 2006 Amazon patent on e-readers with secondary LCD displays (like the original Kindle's scroller-navigation panel), and several of the claims are potentially broad enough to cover the Nook and many other devices with both electronic paper and LCD displays. What's more, Amazon agreed not to file for any corresponding foreign patents during the four-year approval process and thus wasn't required to publish the patent application -- meaning this is likely a complete surprise to the entire industry. Yeah, it's juicy. Here's one of the claims that could cause problems for Barnes & Noble -- in plain English, it potentially covers any device with both an electronic paper display and a second smaller LCD display next to it.

A handheld electronic device comprising: a housing; an electronic paper display disposed in the housing and having a first surface area; and a liquid crystal display (LCD) disposed in the housing proximate the electronic paper display, the LCD having a second surface area that is smaller than the first surface area of the electronic paper display.

That's pretty sweeping -- it doesn't take much to look at the Nook and see that it has both an electronic ink display and a smaller LCD located next to it. Now, we don't know if Amazon has any plans to actually sue anyone over this patent yet, but we're guessing there's a flurry of legal activity happening at all the major e-reader manufacturers right now, and we're definitely curious to see what the fallout looks like -- remember, Barnes & Noble is already involved in a trade secret dispute over the Nook with Spring Design, which claims that B&N saw its Alex reader under NDA and then copied it for the Nook. That case isn't scheduled to wrap up before November, so there's a chance B&N and Spring Design could end up simultaneously fighting each other in one case while taking on Amazon as allies in another, which would be... messy. We'll see what happens -- while we've no doubt Barnes & Noble will put up a serious fight if it comes to that, we're curious to see if the shift away from e-reader development to general-use tablets hastens as the market contracts, margins shrink, and the cost of litigation becomes prohibitive. The ball's very definitely in Amazon's court now -- stay tuned.

[Thanks, Anand]