Tuesday, July 05, 2005

Mediation in suit of Freedom Wireless vs. BCGI

On June 13, 2005, the presiding judge in the case in D. Mass. between Freedom Wireless and BCGI suspended the non-jury trial on inequitable conduct and ordered mediation between BCGI and the other co-defendants in the lawsuit and Freedom Wireless, Inc. In the event that the mediation is unsuccessful and the parties are unable to reach a settlement, the non-jury trial is currently scheduled to resume on July 14, 2005 and could last approximately one to two weeks after it commences.

Some patents assigned to Freedom Wireless:

Claim 1:
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).

5,854,975 filed November 15, 1995, issued December 29, 1998
Claim 1:
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.

6,236,851 is is a continuation of U.S. patent application Ser. No. 08/559,283, filed on Nov. 15, 1995, now U.S. Pat. No. 5,854,975 which is a continuation-in-part of U.S. Ser. No. 08/364,479 filed Dec. 23, 1994 U.S. Pat. No. 5,722,067. [firm: Fish & Richardson P.C. ]

Claim 1:
A method of increasing a level of credit in a user account in a preauthorized telecommunications service, the method comprising:

receiving information from a wireless communications device, the information comprising an identifier, and user-input, obtained from a vended medium, that represents a specific, predetermined level of credit;

routing the received information to a wireless service provider based on the identifier; and

modifying an account at the wireless service provider based on the user-input, wherein modification of the account comprises increasing a level of credit available for wireless telecommunications service by the predetermined level of credit.

from the Boston Globe:

Boston Communications Group Inc. [BCGI], a Bedford, MA wireless technology company, is fighting for its life. In May, a federal jury slapped BCGI with a $128 million judgment for infringing on a patent owned by a tiny Phoenix company that covers prepaid cellular calling plans. If upheld, the judgment, which is three times BCGI's market value, would almost certainly drive the 400-person company into bankruptcy.

BCGI is waging a long-shot battle to overturn the judgment, arguing it's a victim of an absurdly broad patent that never should have been issued.

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.

BCGI gets sympathy from some top patent lawyers.

''Some of these claims are very, very broad," said Sarah Chapin Columbia, of Choate Hall & Stewart in Boston, which has no involvement in the BCGI case. Columbia, who reviewed the case at the request of the Globe, said the Freedom Wireless patent ''is a very good example of a very broad business-method-type patent of the type that would be very difficult to invalidate."

Joseph G. Hadzima Jr., a senior lecturer at the Massachusetts Institute of Technology who specializes in intellectual property issues, said: ''You're going to see more of these cases, and they are going to get worse. You've got more and more of what we call 'patent trolls' that go and acquire IP just for the purpose of suing people."

One reason intellectual property specialists are so leery of business-method patents: It is almost impossibly difficult to document the so-called prior art, or what already existed when an inventor came up with a purportedly new idea. Finding evidence that a thing never existed -- such as a chemical compound -- is, as a rule, considerably easier than proving no one ever had a method of doing something.

US Representative Howard Berman, a California Democrat who has for years tried to change the patent process, refuses to take a yes-or-no position on business-method patents. But Berman has said ''we must pay attention to those who raise concerns about whether business method patents are being issued for obvious inventions, or for inventions determined to be novel, based on inadequate information about prior inventions."

BCGI and Freedom lawyers are preparing to meet this week in hopes of negotiating an alternative to the $128 million judgment, but have reported no progress in preliminary two-party talks. BCGI is set to return to US District Judge Edward Harrington's courtroom next week to argue that the Freedom Wireless patent should be invalidated, because its owners knew about but failed to give the Patent Office evidence that others had thought of the idea.

Freedom denies the allegation, calling it a standard sore-loser legal gambit.

Before BCGI rolled out its technology in 1996, prepaid wireless calling plans either required people to dial an 800-style number and then enter the number they wanted to reach, or buy a special phone that had the equivalent of a timer built in to shut off service when they used up their minutes.

Freedom's lawyer, William C. Price of Los Angeles, said the trial proved that Freedom had a patentable idea that BCGI violated.

''The best minds in the industry hadn't figured out how to do it" before Freedom's two inventors filed their patent, Price said.

''Once you see what somebody invented," Price added, ''it's easy to say it looked obvious in hindsight."


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