Federal Court Shuts Down Pay As You Go Wireless

self assembled struc writes "BCGI has been found guilty of infringing on pay-as-you-go wireless patents owned by Freedom Wireless. This means that cellular providers who use BCGI pay-as-you-go billing systems must immediately stop selling new service. For the next 90 days, as they wind down their service, they will have to pay Freedom Wireless 2.5 cents per airtime minute used PER CUSTOMER. This heralds a farewell to Cingular's Go Phone and Sprint-Nextel's Boost services, both powered by BCGI."

Comments

Re:America

[Koil]

What did they patent? The intellectual property of the "pay-as-you-go" business model?? I certainly hope not...

I have to agree with the parent that it is so disheartening to constantly see these types of lawsuits that do absolutely nothing but fatten the pockets of the companies already in place and empty the pockets of the consumer.

Shooting the competition in the back of the head

[Gojira Shipi-Taro]

It's also a potential way to get oneself shot in the back of the head...

Just saying. I don't use those services myself, but people with nothing to lose (who might need that kind of service) are a group I personally try not to piss off.

Revenge is a dish I don't want any fucking part of. Particularly when someone's safety might be at stake.

why pay?

[Anonymous Coward]

I am running an open access point and everyone around can use and make his VoIP calls over it for free. Why would I want to try charging anyone? In fact, I am already helping create wireless neighborhood mesh networks for make free distributed Internet a reality.

Background on Litigants, from Wall Street Journal

[Landaras]

I remember reading about this case a few weeks ago in the Wall Street Journal. The article was entitled "Patent litigants pose growing threat to business."

The first paragraph brought to light one of Freedom Wireless' founder's criminal past (it involved stolen cars) as well as the fact that the founders had previously gone after GTE for similar issues (alleging stolen trade secret). GTE ended up getting paid $90,000 in legal fees, a statement that GTE had never stolen a trade secret, and a promise never to sue GTE again.

Fast forward a few years. Freedom Wireless currently does nothing but patent ligitation. These men are patent trolls.

The Wall Street Journal charges for their archives, but the full text of the same article is available here.

- Neil Wehneman

Re:Lets yell

[Lemmy Caution]

See, one of the problems of the political culture in this country is this: the people who are suspicious of corporate power are too trusting of government power to allocate resources for social change; the people who are suspicious of government power have a hard-on for the public sector (without realizing that wealth will always - always - muster power to protect itself) and, often, for the military. (The biggest weak-point in libertarian thinking is class-blindness - they think they are serving hard-working middle- and-upper-middle-class americans without understanding that this is exactly the class the created the Leviathan of state to begin with, and in whose interests it ultimately works.) This means that the political will to muster things like a reform of patent law will never occur unless it happens in a way that is in the interests of power.

Which may be happening here: the Cingulars and Nextels may start getting annoyed enough by the absurdities of patent law and the effect on their bottom line that they start to lobby for a change. Unfortunately, the change is not likely to make things any easier for the bulk of us.

Explains the expensive broadband.

[saj_s]

This article might help make some sense of why broadband in the US is so expensive as discussed in an earlier Slashdot article today.

Re:It's as crazy as it sounds

[sstidman]

Ummm, aren't those patents effectively the same, differing mainly in the correction of grammatical errors and some rewording? If so, then did the USPTO effectively issue the same patent to the same company twice? Can they do that? Wouldn't the first patent exist as prior art for the second patent?

Judging by the looks of the two patents, I'd guess the first patent was written by someone not very skilled at writing patents (or writing in English, for that matter) and the second was written by an actual patent attorney. If you read the first paragraph of the first patent carefully, it arguably means that the patent covers only calls that aren't completed:

A cellular telecommunications system having a security feature which allows only pre-authorized users no complete cellular telephone calls.

I'm guessing that nasty typo needed to be corrected so they had to submit a new patent.

Firefly mobile?!

[Krozy]

I wonder what impact this will have on parents who bought their kids firefly mobile phones. On a related note, I wonder how we can find out what exact brands and subbrands and such are actually affected.

Re:Might be a good thing...

[PAPPP]

I'm certainly not saying they're doing this for the greater good, but look at Sony v. Universal (aka the betamax decision ), Sony was fighting for profits, but ended up establishing the substantial non-infringing use argument, inadvertently doing something for the greater good as a result of their "profit protecting". Also notable, the betamax format failed anyway, and the decision is now reviled by their entertainment divisions, the good part outlasted the greed.

Re:It's as crazy as it sounds

[Waffle Iron]

I read over the first patent. The description section compares it with prior art landline prepaid plans and then points out that the key improvement here is that the user doesn't have to type in the calling card number. They make the vast intellectual leap of realizing that a cellphone has a UID that can be used instead of a calling card number.

The most general and interesting claim, #10, states:

10. A method for pre-paid cellular telephone service, said method comprising the steps of:

forwarding to a pre-paid switching system a dialed number identification system code (DNIS) and an automated number identification code (ANI) representing a call from a cellular telephone;

at the pre-paid switching system, verifying a positive balance in an account identified by the ANI;

forwarding the call to an LEC; and

decrementing the balance in the account at regular intervals during the call until the call is terminated or until the balance is no longer positive, whichever occurs first.

This claim describes the exact sequence of events of a landline calling card, except that the old "user types in calling card number" is replaced by " and an automated number identification code (ANI) representing a call from a cellular telephone". Now, if asked to design a prepaid wireless phone service, would it be obvious to even a less-than-average person that it would be better use the ID number already in the phone rather than an arbitrary one on a separate card? Yes, of course it is. However, the cabal of judges, lawyers and bureaucrats that make up the IP establishment have their own version of English, where the word "obvious" has no real meaning.

In the mean time, for the next 15 years, people are probably going to have to come up with stupid work-arounds that evade other parts of that claim. The first one that comes to my mind is zero out the account when the call starts, set a timer to end the call, and refund money into the account if the timer hasn't expired when the call hangs up.

That may not fly because it's too "functionally equivalent" to the claim, but with software programmable phones and cryptographic protocols it's probably possible to avoid sending a fixed phone ID number or keeping a centralized account balance altogether. At the end of the day, it's doubtful people will be paying royalties on this patent for very long, but there will just be a bunch of pointless make-work kludging people will have to do to sidestep this patent. So much for advancements to useful arts and sciences.

Re:America

[Anonymous Coward]

You anti-patent geeks are silly and apparently arent business people. Try taking the risk of developing something on your own time and dime without a software company paying overhead and salary and then realize why it is so important to have your innovation protected- so that you can have any sort of chance to then face the daunting task of creating a viable business plan, raising money, entering the market, finding channel partners, etc., etc., etc.
Patents can and do work for the little guy. No little guy can get financing without some kernal of sustainable competitive advantage at the onset. A patent offers such advantage. And no- every business can not be grown organically beginning with meager financing from one's piggy bank.

Addressing obviousness:

Everything seems obvious in hindsight. Some applications that seem to be genuinely absurd do slip through the cracks. The system is imperect. Better to let some bad patents slip through the cracks than to disallow investment in innovation by blocking hundreds or thousands of reasonably good patents due to some psuedo-objective, tighter unobviousness standard.

I challenge you all to come up with an "obvious" yet obviously useful, economically relevant invention and then actually patent it and take part in the system. You can recoup the costs of the patent through licensing if you wish and then let everyone in the whole world use your obvious system/method/whatever for free, forever, if that's what you want.

something obvious

[John Sokol]

I haven't seen the patent first hand, but often something obvious now, wasn't at that time. If it were then why wasn't someone else doing it already.

    I can list many examples of this. The mouse, keyboard, screens, printers, windowing environment, The Internet, an Operating system and even a CPU and the IC chips, were at the time major conceptual steps forward.

  I can't tell you how hard it was to explain what the Internet or even a Network was to people in 1983, they just couldn't grasp it.

  With patents if someone has been doing something then a patent gets filed by another person at later date, then the group getting sued must try to show that, if they can the patent holder will have to pay like multiple damages and costs.

  So as a patent holder you never want to go to court with a weak patent.

  But in practice, most people loose their nerve at the first letter from a patent holder, even if its a weak patent that wouldn't hold up.

  As a result many people end up paying royalties or giving up without a fight, when they really would win and have that patent tossed out.

  I have come to realize much of patent law is a poker game.

  For a large company like Microsoft they look at the strength of a patent and the value of the company holding it and decide is it cheaper to pay or infringe. And same in reverse, even if a patent isn't worth the paper it's written on, if the company they sue can't afford to challenge it, then they win.

    AT&T did this to many companies they felt were competition, file dozens of bogus suite against one company, from many little companies they control, and drive the small players out of business while leaving there name out of it.

Re:America

[mattkinabrewmindspri]

Apparently they patented the idea of using a database to keep track of your wireless usage:

Freedom Wireless, a four-person company, has never set up an actual business serving customers; it seeks royalties from companies like BCGI, Verizon Wireless, and Nextel Communications Inc. At the heart of Freedom's 1996 patent is the idea of using a computer to match a cellphone number with a database showing how many paid-up minutes the cellphone owner has, then deciding whether to complete a call.

I guess no one's ever thought up that particular use for a database before...

Eminent Domain?

[serutan]

Local governments can kick people out of their houses for the sake of public works projects, and lately they've been doing it for commercial projects. The federal government can void patents in the name of national security. I'm not in love with either practice, but as long as those are the rules we have to live under why can't the principle of eminent domain be invoked to override a patent claim that denies a valuable service to a significant number of people. Especially if the technology has been in use for a while.

Re:Easy patent reform:

[laughingcoyote]

You do make a good point, but quite realistically, say the rest of my proposed reforms went into place (real, tangible, stuff -only-, and only either totally novel inventions or revolutionary, rather than evolutionary, improvements in existing ones.) Even now, corporations hold the vast majority of patents, Thomas Edison the 15th in his basement lab does not. If that were put into place, sure, a few basement inventors still might come up with a great concept. Easy enough-we change "must produce or you lose it" to "must be producing or making a good-faith effort to begin or prepare for production or you lose it". That way, just -by- offering to license you my patent for manufacture, I'm making a good faith effort, and your refusal doesn't stop that. However, if a company holds the patent, and is simultaneously unwilling to license it at a reasonable rate or produce it themselves, and is just waiting for someone to step on the mine to get a legal settlement, they lose the patent.

In the meantime, someone who holds the "gateway" idea and is refusing to license also faces loss of their patent. So, in the end, the small inventor actually wins out, because no one's any longer -allowed- to hold out like that.

Re:Fairness is a matter of perspective.

[arkanes]

Why is the guy at Intel an asshole if he solves the same problem you did? Personally, I think independent invention should be considered de facto evidence of obviousness, and should invalidate a patent unless the patent holder can demonstrate otherwise, with a fairly signifigent burden. Further, even if they do make that burden, so long as the defendant can prove true independent invention, the holder should be forced to license it at no cost to the independent inventor. And process patents (like this one, and the Eolas patent) that simply describe a problem domain without an implementation of a solution should be tossed without delay.

Re:who uses prepaid?

[timmyf2371]

I use prepaid, mainly because it suits me perfectly.

I use very few minutes - I'm lucky if I'll use 60 minutes over the course of a month. If I want to talk to someone and have a conversation longer than: "I'm running slightly late, will be there in 15," then I'll go on Skype and communicate with them that way.

My cellular handset is mainly for text messaging and emailing on the move - that and using the inbuilt camera to take photos and videos.