Judge Upholds Huge Patent Fee For Prepaid Mobile Services

from the helping-innovation? dept

Back in May, we wrote about a case where a company that held a patent on the concept of "prepaid wireless accounts" had won a lawsuit against some US mobile operators who are offering prepaid accounts. Most of the damage is being placed on one company, Boston Communications Group Inc. (BCGI), who operates prepaid billing systems for Cingular, Verizon and Nextel (now Sprint). BCGI claimed that the $128 million award from the jury was way too high, but the judge has upheld the amount which might drive BCGI out of business. Beyond the fact that the concept of "prepay" vs. "postpay" seems fairly obvious and the fact that there was prior art on prepaid systems at the time, this highlights once again the problem with parts of the patent system today. BCGI is a company that was actually helping operators deliver prepaid accounts -- a true innovation that the market accepted. Yet, now they're being put out of business because some other company "owned," but didn't appear to implement, this somewhat obvious idea. So, the company that actually successfully brought the concept to market gets punished once again.

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  • identicon
    Kevin Mesiab, 1 Sep 2005 @ 9:48pm

    Cease and Desist

    Sorry Techdirt, but I own the patent to the quoted "this" vs. "that" construct. You must immediately remove your quotes or be sued out of your mortgage.

    reply to this | link to this | view in chronology ]

  • identicon
    pokerpundit, 2 Sep 2005 @ 7:56am

    No Subject Given

    Mike,

    Patent owners are not obligated to bring their inventions to market. The fact that others steal their ideas (by searching for issued, but unmarketed patent ideas) and get established in the market, in no way, shape or form, relieves them of their obligations to pay royalties to patent holders.

    Under your system, the only type of people who could get something patented would be people who also have the resources to bring their idea to the market.

    That's an unworkable, and unfair, system.

    You should rethink your vehement opposition to people suing to protect their royalty rights.

    Many judges, who know the law better than you do, and who have heard the facts of the cases that you never hear about in the news reports you rely on, disagree with you on your position.

    Our patent system is based on the premise that the person who gets the patent is the person who FIRST APPLIES for the patent.

    Any company that brings a concept to market has an obligation to conduct a patent search. That's what patent attorney's do and why we have patent attorney's.

    If the company is THEN found to be infringing on someone else's patent, that company isn't relieved of its royalty obligations ... but CAN sue the patent attorney for damages.

    The patent laws allow for the patenting of WAYS to implement ideas; not just the underlying ideas themselves. Always has been this way.

    reply to this | link to this | view in chronology ]

    • identicon
      Patent Law, 2 Sep 2005 @ 8:12am

      Re: No Subject Given

      1. in the U.S., unlike other countries, it is actually the FIRST TO INVENT that receives a patent. If person 1 files a patent application, then person 2 files, if person 2 invented first, person 2 receives the patent.
      2. a company has NO obligation to perform a patent search before marketing a product. it is a good idea, but not an obligation.
      3. the company that hired a patent attorney to perform a patent search can sue the patent attorney, but if the patent attorney was not careless in the search, he/she can not be held liable. shit happens.
      4. stop spreading misinformation

      reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 2 Sep 2005 @ 9:13am

      Re: No Subject Given

      The other poster (Patent Law) has pointed out the mistakes in your post, but also, I should clarify one point that you made. You may be right that patent owners are not currently obligated to bring their inventions to market, but the point I'm making is that this is a bad thing.

      The real innovation, the real driver of the economy, is in successfully bringing a product to market. That's what innovation is about. However, the patent system is encouraging the wrong thing right now. It's encouraging people to invent, not innovate, and then to sit on the patent and wait for someone else to come up with the same idea independently and sue.

      In other words, it's punishing the companies that actually do try to innovate and bring products to market. That's wrong and that's bad for the economy.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Sep 2005 @ 9:44am

        Re: No Subject Given

        Umm, nobody is going to do R&D if there is no reward at the end. I'm not going to develop a new better TV or cell phone or whatever, if my ownership of the idea is worthless because another company "actually successfully brought the concept to market".

        Also, not everyone sits on a patent hoping people will infringe. Many license their inventions.

        reply to this | link to this | view in chronology ]

        • icon
          Mike (profile), 2 Sep 2005 @ 11:49am

          Re: No Subject Given

          The "no one will do R&D" claim is provably false. That wasn't what happened in the Netherlands or Switzerland in the late 19th century when both did away with patents. In fact, it helped increase R&D and innovation.

          Also, the problem is that you view the *patent* as the reward. If you view the market *buying the product* as the reward, then you don't need patents. The rewards belong to the companies that bring the product to market successfully and they come in the form of revenue from customers buying the product.

          reply to this | link to this | view in chronology ]

          • icon
            Aaron de Oliveira (profile), 2 Sep 2005 @ 1:13pm

            Re: No Subject Given

            There will always be R&D. People think. People tinker. I try to improve things all the time. I'm always looking at source code trying to learn something or taking something apart to see how it ticks.

            There will no longer be a monopoly as an incentive for R&D, true. However, R&D is driven by more than just the incentive of a monopoly.

            reply to this | link to this | view in chronology ]


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