BCI loses motion to reduce damages

US District Judge Edward F. Harrington denied Boston Communications Group's motion to reduce a jury's May 20 damages award, in a case involving patentee Freedom Wireless Inc., a privately held developer of technology used for prepaid wireless billing.

E.Y. Snowden, president and chief executive of Boston Communications: "We do not believe that we infringed Freedom Wireless' patents or that $128 million bears any relationship to a reasonable royalty that BCGI would have paid for a license to the patent rights."

BCGI had asserted a defense of inequitable conduct in that it claimed that Freedom Communications committed fraud by withholding important information during the patent application process.

Freedom Wireless' technology, developed by inventors Douglas Fougnies and Dan Harned, allows customers making prepaid calls to avoid dialing identification codes or calling toll-free numbers.

US 5,854,975 to Fougnies and Harned, issued Dec. 29, 1998, has been cited by 49 US patents. It is based on a continuation-in-part of application Ser. No. 08/364,479 filed on Dec. 23, 1994, now U.S. Pat. No. 5,722,067. [The '067 patent has been cited by 56 US patents.]

The first claim of the '975 recites:

A cellular telecommunications system, comprising, in combination:

(a) a plurality of cellular radiotelephones each having a predetermined subscriber telephone number;

(b) at least one local exchange carrier;

(c) at least one cellular carrier;

(d) at least one cellular switch in communication with at least one local exchange carrier;

(e) at least one host computer in communication with said at least one cellular switch;

(f) processing means resident in the cellular switch for receiving signals from both the at least one local exchange carrier and the cellular carrier and sending signals to both the at least one local exchange carrier and cellular carrier;

(g) processing means resident in the at least one host computer for accepting and evaluating a subscriber database comprising a plurality of records representing subscribers to the cellular telecommunications system and including pre-paid account balance information for each subscriber; and

(h) at least one prepaid calling card having an encrypted number which allows a set value of air time to be added to a prepaid subscriber account balance by entering the encrypted number into the prepaid subscriber's cellular radiotelephone.

The first claim of the '067 recites:

A method of cellular telecommunications, comprising the steps of:

(a) establishing a pre-paid subscriber account balance linked to a pre-determined cellular telephone number assigned to a subscriber;

(b) writing the established pre-paid subscriber account balance to a database;

(c) initiating a cellular telecommunications event, by a subscriber, by the subscriber entering a dialed call destination number and transmitting the dialed call destination number as a dialed number identification system (DNIS) code and transmitting an automated number identification code (ANI) uniquely identified with a subscriber's cellular radiotelephone;

(d) receiving the DNIS and ANI at a cellular switch, the cellular switch recognizing the ANI as belonging to a pre-paid subscriber;

(e) sending an off-hook signal from the cellular switch to a host computer;

(f) the host computer serially sending a first signal to the cellular switch to obtain the DNIS signal therefrom, receiving the first signal, sending a second signal to the cellular switch to obtain the ANI signal therefrom, and receiving the second signal at the host computer;

(g) establishing communication between the host computer and a remote server computer, the remote server computer being in communication with the subscriber database, and validating the ANI received from the cellular switch as belonging to a subscriber;

(h) validating existence of a pre-determined subscriber account balance in the subscriber database based upon the DNIS and the time of day of the telecommunications event;

(i) establishing communications between the host computer and a local exchange carrier to obtain an available telecommunications line and sending the DNIS only if an affirmative validation at step (h) occurs;

(j) checking for an off-hook condition at the DNIS destination and, upon occurrence thereof, decrementing the subscriber account balance at regular intervals during the telecommunications event until an on-hook condition exists as the DNIS destination; and

(k) disconnecting the telecommunications event at the host server upon occurrence of a negative validation at step (h) or an on-hook condition exists at step (j).