Patent Holding Co. Sues More Than 100 Defendants, Pays the Tab - Federal Circuit
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Patent Holding Co. Sues More Than 100 Defendants, Pays the Tab

You could tell that this lawsuit was absurd from the caption alone. The list of defendants stretched over seven pages. The list of council, in much smaller type, filled four more pages. The list of defendants’ firms included a Who’s Who of BigLaw, including MoFo, Latham & Watkins, and Kirkland & Ellis. The defendants included domestic carriers and handset manufacturers (Sprint, T-Mobile, AT&T, and Motorola), software providers (Microsoft and Yahoo!) and foreign carriers (Vodaphone and T-Mobile).

The plaintiff was a wee little patent holding company, creatively named Technology Patents, LLC of Maryland.

What was the battle over? Text-message and page delivery systems. To simplify the system as much as possible, the sender uses email or a website to send a page to the recipient. Instead of broadcasting the message to every provider in the world, the recipient has either a predetermined list of countries that he will visit, or manually sets the country ahead of time.

In other words, instead of firing an array of text message bullets across the entire world, which is expensive and redundant, the recipient holds up a target and says, "shoot here."

Why not just utilize roaming? After all, a person's phone should be able to roam onto foreign networks automatically if the frequencies match up. According to the patent, the proposed system is cheaper.

So what did the cell phone carriers, manufacturers, and software makers do to infringe on the patent? They had their phones automatically select a carrier for the recipient, or in some cases, the recipient can manually choose a network (such as Vodaphone). The user (or the user's phone) is still holding up a target, though it is a cell carrier instead of a country name. It's not exactly roaming, but it's certainly close.

The District Court sided with the defendants on all claims. The domestic carriers did not infringe because the court found that the users not select a country (they select a carrier), that the system resembled roaming, and that there was no "predetermined list of countries" feature. The Court of Appeals for the Federal Circuit agreed.

For foreign carriers, the issue was a matter of jurisdiction. Companies like Vodaphone and T-Mobile Deutschland do not have sufficient contacts in the U.S., nor do long-arm statutes apply. The CAFC agreed, and also stated that even if jurisdiction applied, the foreign carriers' alleged infringement fails for similar reasons to the domestic defendants.

The software providers were not so lucky. The lower court dismissed the claims because the alleged infringement required multiple actors and the plaintiff failed to prove control over the end users. In other words, the software was a tool. The CAFC disagreed with the "multiple user" rationale and remanded the claims.

The truly bad news for Technology Patents is that they will now have to cover the costs of the domestic defendants and foreign defendants. The software companies will cover their own fees. Considering the list of lawyers and firms hired, that should mean a hefty tab.

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