Patent wars: RealNetworks wins; Global Crossing pays up

Friskit fails in its patent infringement lawsuit, Real says. Meanwhile, Global Crossing reaches a licensing deal with prolific patent enforcer Ronald Katz.

This was originally posted at ZDNet's Between the Lines.

RealNetworks defeated a patent infringement suit that was trying to come back from the dead. Meanwhile, Global Crossing licensed a portfolio of call center patents from Ronald A. Katz Technology Licensing, an outfit that collects dough from a who's who of corporate America.

First, RealNetworks said Tuesday that it defeated an attempt by Friskit to revive a patent infringement suit that sought damages of $70 million. In a statement, RealNetworks outlined:

Patents image

The Federal Circuit in Washington D.C. upheld a 2007 ruling in which Judge William W. Schwarzer of the Northern District of California invalidated all asserted claims. RealNetworks was one of the first patent defendants to rely upon the Supreme Court's decision in KSR Int'l Co. v. Teleflex Inc. Judge Schwarzer agreed that Friskit's "inventions" were nothing more than obvious combinations of elements found in the prior art, including RealNetworks' own products.

In April 2006, Real won a similar suit.

On the other side of the patent ledger, Global Crossing said in a statement that it "will purchase a nonexclusive license under a comprehensive portfolio of patents that Katz owns relating to interactive voice applications."

Terms weren't disclosed, but at least Global Crossing isn't alone. Ronald A. Katz Technology Licensing has collected dough from 275 companies including American Express, AT&T, Avon, Bank of America, Costco, CVS CareMark, First Data, HP, IBM, Microsoft, Morgan Stanley, T Rowe Price, Wal-Mart, and Whirlpool, to name a few.

Katz's background is interesting. He's a prolific patent enforcer--some would say troll .

The Katz dossier on Wikipedia has a bevy of notable nuggets including:

• A run-in with the U.S. Patent and Trademark Office;
• Claims that run 100s of pages;
• Requests to reexamine Katz's patents abound.

Wikipedia notes:

In 1961, Ronald Katz co-founded Telecredit, Inc. This was the first company to "enable merchants to verify consumer checks over the phone using an automated system without the assistance of a live operator". In 1998, Mr. Katz formed a partnership with American Express Company to provide call processing services. That partnership later became First Data Corporation.

Ronald Katz has since founded Ronald A. Katz Technology Licensing, L.P. (RAKTL). RAKTL's primary purpose is to license the Katz patent portfolio to companies using automated call centers. Over 150 companies have taken a license to the patents. RAKTL has thus earned approximately a billion dollars in license fees. Katz has been characterized as a patent troll largely due to the aggressive legal tactics used by RAKTL, such as suing infringers who refuse to take a license.

And why wouldn't you sue everyone? After all, everyone is paying up. A quick search shows a never-ending stream of press releases announcing that some outfit has licensed a Katz patent. Perhaps these patents are iron-clad. Or it could be that it's simply cheaper to license than fight. In either way Katz has a helluva business.

About the author

    Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.

     

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