A London intellectual-property licensing company claims it has a set of patents covering a software-downloading technique that's in widespread use for automating application deliveries and updates. The company, BTG, said it is actively negotiating with a number of software vendors about licensing programs to remedy what it sees as infringement.
At issue are six patents granted by the US Patent Office, according to BTG spokesman Andy Burrows. The recipient was an inventor BTG works with who does business via New York-based Teleshuttle, Burrows said. He described the patents as covering "downloading software updates manually or on a pre-determined schedule, as is used for anti-virus updates and product patches."
BTG began working with Teleshuttle in 1998, two years before Teleshuttle was granted the first of the patents now at issue. Burrows said BTG began negotiating several months ago with vendors whose products it believes violate the patents. He declined to name any of those companies or products, or to comment on how much BTG believes the technologies are worth. "We have an internal estimate but we don't publish it," he said. "We definitely believe there are products out there using the technology."
The vendors BTG is targeting have been open to negotiations, but if discussions fail, legal action is a possibility, Burrows said.
Patent lawsuits have proliferated in the past few years, despite the time and expense involved in trying the cases. For victors, the payoffs can be huge. Last year, a federal judge ordered eBay to pay $29.5 million to Thomas Woolston for infringing, with its "Buy it Now" feature, on a patent he held for fix-priced sales online. Symantec paid $62.5 million to small software company Hilgraeve for infringing its virus scanning patent in August last year. And Intel agreed payment of $225 million to Intergraph for infringing patents on parallel-computing technology. Meanwhile, Microsoft is
Most patent cases are settled before reaching trial, according to attorney John Ferrell, who chairs the intellectual property practice group of law firm Carr & Ferrell. Single-patent cases that make it to trial are won about half the time. "It's almost a coin flip," he said. When multiple patents are involved, as with BTG's claim, the odds for the plaintiff go up, since a defendant only has to violate one patent to end up owing damages.
While Burrows declined to identify any of the companies BTG has approached, the Daily Telegraph, which first reported the story, named Microsoft as one vendor in BTG's crosshairs.
That wouldn't be a surprise, Ferrell said. While no small company wants to take on the tech industry Goliath in a courtroom, one tactic for enforcing patents is to target a big vendor in hopes of winning a settlement. Even a small licensing deal can be a win for the patent holder, who can then use the marquee name to pressure other vendors to take on similar licences.
BTG had revenue of £52.9 million for the year ended 31 March 2004, almost entirely from licence agreements and settlements. Its portfolio includes the technology for magnetic resonance imaging and the hovercraft.