Legal Issues

by Mike Masnick

Flat Rate Pricing For Wireless Service? Patented!

from the oh,-come-on dept

Seems like today's been quite the day for patent related stories. Just as we were discussing the question of obviousness when it comes to patents, comes the news of mobile operator Leap Wireless' patent lawsuit against Metro PCS. Apparently, Leap was able to get a business method patent on offering flat-rate pricing for a mobile phone service. Note that this patent was filed in 2001, when flat-rate pricing was very much the standard for internet access. It seems positively obvious that someone would eventually offer flat-rate service for mobile phones as well. In fact, there were flat-rate, no roaming charge mobile plans well before 2001. I remember AT&T Wireless (the old one) offering such a plan around 1998. Reading the patent, though, Leap makes it sound like some amazing new invention that has wonderfully mysterious properties to increase capacity while lowering peak capacity. So, can someone explain how this idea could possibly be called "new and non-obvious"? Then, can you explain how it helps the market in the slightest to have Leap try to block the competition from offering a flat-rate pricing plan as well?

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    jefferson, Aug 24th, 2006 @ 3:44am


    I would like to get a patent on flat rate land line phone service.. oh that already exists.. hmmm glat rate cable TV crap missed that one too. Wait I know flat rate gas consumption.. no, I would lose my shirt on that one.. come on people, lets "us" come up with a few. We can do it, we are all smart people.

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

  2. identicon
    Scott, Aug 24th, 2006 @ 3:45am


    Just another company trying to stop competition using our patent office, reminds me of another big company that does the same type of thing.

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

  3. identicon
    Moz, Aug 24th, 2006 @ 3:56am

    Flat rate urban living surface

    How about a flat rate surface on which to provide living accomodations.

    A flat rate per square milli-radian of Terran surface.

    Oh, wait, that would only work given a non-Mercator(sp) projection based system of land denomination.

    How about just a flat earth instead?

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

  4. identicon
    Andre Serralheiro, Aug 24th, 2006 @ 3:59am

    Ridiculous. If 50% of wireless users know what flat-rate means (percentage??), it should just be dropped. Things like this are a real threat to human intelligence...

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

  5. identicon
    Sanguine Dream, Aug 24th, 2006 @ 5:21am

    Re: Patent's

    i was gonna add a joke about your comment but then I realized, "Which big company is he/she talking about?" So I will go along with that as my joke about your comment.

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

  6. identicon
    Bryan, Aug 24th, 2006 @ 5:47am

    I would like to patent...

    I'm going to go file a patent for COMMON SENSE!!! O wait, I better not, because I'll never get to make any money off of it...

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

  7. identicon
    Sanguine Dream, Aug 24th, 2006 @ 6:40am

    I will patent...

    lawsuits. That way everytime someone files a lawsuit I'll automatically get paid. I didn't think it would work at first because of the non-obvious clause but appearantly that's not an issue anymore.

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

  8. identicon
    Mike Brown, Aug 24th, 2006 @ 7:08am

    Read the claims...

    If the patent number 6813497 reported in the article is correct (and it does match the company and issue date), I can't see that it claims anything near as broad as "flat-rate mobile phone service". The first claim reads:

    1. A wireless communications system, adapted to capacity rather than geographic coverage of the wireless communications system, comprising: an average level of Erlangs per subscriber in a range of greater than about 0.03 to less than about 0.05 in an in-building region; and a building penetration margin adapted to secure greater in-building penetration uniquely in the in-building region over penetration secured in a transportation region.

    I'm not sure I know (or want to know) what all that gobbledgook means, but it sure doesn't mean "flat rate cell service".

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

  9. identicon
    Yo ho ho..., Aug 24th, 2006 @ 7:44am

    Re: Read the claims...

    Disguising the obviousness of delivering a wireless serivce based upon capacity rather than geobraphy with "gobbedlygook" doesn't make the patent any less ridiculous.

    I think fault here lies not with Leap or Metro, but that dumb-ass clerk in the patent office who couldn't understand the gobbedlygook as he ok'ed the patent in the first place.

    Oh, well... just another example of lawyers taking advantage of our legal systems (and dumb-asses)

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

  10. identicon
    Anonymous Coward, Aug 24th, 2006 @ 9:03am

    patent review

    The present invention may feature flat rate billing of users. This is in contrast to prior known wireless services, in which services are delivered on a per call or per minute usage charge basis. This change in pricing model affects usage and capacity of the network in certain ways. In a preferred embodiment, the system and network of the present invention employs flat rate billing, achieves high capacity utilization of network components, and achieves lower peak capacity. These features enable the network and system of the present invention to handle a higher overall volume of calls with less costly central network components and more streamlined operations than conventional cellular systems.

    [--I stand in awe of this clever reasoning--]

    ...As service is flat rate and pre-paid, there are no charges based upon the number of calls, length of calls, and features accessed. Itemized billing statements may be eliminated and replaced by simple flat rate bills. Accounts receivable and collection activities are eliminated, further simplifying back office operations.

    [--profoundly innovative! tell me more--]

    ...Further, the present invention substantially reduces activation-related costs. The phones of the present invention are sold preactivated. Each phone already has loaded into it a unique cellular number upon leaving the factory. This reduces the effort required to activate. Rather than supplying skilled customer service personnel to assist in activation, activation may be conducted by the customer upon leaving the store.....

    [--well, maybe thats clever. thanks for thinking it up, guys!--]

    None of these improvements were obvious at the time the invention was made. In contrast, the incumbent business model has been and remains based upon minutes of usage, the time of day, and features accessed.

    [--i beg to differ. just because nobody was doing this doesnt mean nobody had thought of it. maybe their cost/benefit analysis didnt come up favorably--]

    ..By combining these features in various combinations, to expand capacity utilization and reduce systems, capital, and operating costs, the advantages of the present invention are fully achieved.

    [--the bottom line: flat rate billing is an ingenious invention that can contribute to more effective use of your company's resources and infrastructure. we gave our engineers a couple of months off after they came up with this one--]

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

  11. identicon
    Anonymous Coward, Aug 24th, 2006 @ 9:26am

    And even if the claim is principally more about pushing wireless service more finely tuned to the needs of metropolitan area networks, as it sounds like to me, the fact remains that it has obviously bogus claims about the nonobvious advantages of flat rate billing. I can only assume that to a radio engineer the technical claims are obvious as well.

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

  12. identicon
    anonymous coward, Aug 24th, 2006 @ 11:09am

    i get a flat rate on banging your wife!

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

  13. identicon
    Anonymous Coward, Aug 24th, 2006 @ 1:33pm


    Yeah she does it for you pro bono, as an act of mercy

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

  14. identicon
    G. A., Mar 3rd, 2008 @ 9:51am

    Leap patenting the flat rate on phone service

    It is obvious that Leap is trying to be as dishonest as it can be. On the other hand why blame Leap if the people/organization overseeing the patent can certify such stupidity?

    G. A.

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

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