Straight Path IP Group, Inc. has filed a patent infringement lawsuit against Apple. The patent infringement lawsuit concerns Apple's FaceTime video conferencing software. Three of the four patents in the lawsuit were originally owned by NetSpeak, the company behind the 90's "WebPhone" product.
Straight Path is a majority owned subsidiary of Straight Path Communications, Inc. ("SPCI"). SPCI is a holding company for two companies, Straight Path and Straight Path Spectrum, Inc. ("Straight Path Spectrum"). Straight Path Spectrum holds, leases and markets fixed wireless spectrum in the 39 GHz and 29 GHz spectrums that are used for telecommunications. In particular, Straight Path Spectrum's spectrum is primarily used to provide backhaul services for existing wireless Internet service providers and for cellular mobile backhaul.
Three of Four Patents Originally from NetSpeak
Under the "Factual Background" of the formal complaint before the court, Straight Path writes that "The Patents-in-Suit were previously owned by NetSpeak Corporation ("NetSpeak"). NetSpeak used the technology claimed in the Patents-in-Suit in one of its products, WebPhone. WebPhone earned numerous awards from publications in the fields of computer and communications technology. In 1996, WebPhone was selected by PC Magazine as the "Editors Choice" of Internet telephone software. Computer Telephony Magazine also designated WebPhone an "Editor's Choice" product in 1996. In 1998, Internet Telephony magazine named WebPhone one of its "Product[s] of the Year.
WebPhone was also the subject of contemporaneous published articles that praised the product. The authors of these articles described WebPhone and its underlying technology as being new and original, and commented on the potentially far-reaching implications of WebPhone for communications and computer technology. For example, in August of 1996, Computer Telephony Magazine published an article in which it concluded that NetSpeak's new Business WebPhone System had the potential to be "absolutely revolutionary." The Computer Telephony Magazine article observes that the method devised by the inventors for establishing point-to-point connections between WebPhone client processes was a "new method" that distinguished WebPhone from other competing products available at the time. A separate review by Consummate Winsock Apps in 1996 observed that "WebPhone may well be on its way towards becoming the killer app that puts to shame similar offerings" from NetSpeak's competitors.
Straight Path is the lawful owner-by-assignment of all right, title and interest in and to the Patents-in-Suit."
In 1996 C/NET reported on the WebPhone in a report titled "NetSpeak WebPhone to dial anywhere."
In that report C/NET noted that "NetSpeak is hoping to overcome a critical weakness in the capabilities of Internet phone systems by letting corporate intranet users dial regular telephones online.
Current Internet phones can dial long distance for the cost of a local call, but they can be used only to talk to other Internet phones using the same software. Netspeak says the combination of its WebPhone PBX system and Call Center software--due to ship in August--will overcome that obstacle and let users connected to the system over an intranet to call any phone anywhere."
Straight Path Alleges that Apple's FaceTime Infringes their Patents in Suit
The heart of Straight Path's case centers on Apple's FaceTime software offered on Macs and Apple's iDevices.
For example, Straight Path noted in count 4 of their complaint before the Court that Apple "has been and now is directly infringing one or more claims of the '208 Patent … by, among other things, making, using, selling, offering to sell and/or importing into the United States for subsequent sale or use of devices that include telephony processes with dynamically assigned network protocol addresses that include a method of selectively alerting a user of an incoming communication, including (a) receiving a call packet containing an information profile identifying a telephony process that is the source of a communications; (b) responding to the incoming communication in accordance with the identity of the source; and (c) wherein a central server stores the address used to establish a connection between telephony processes. For example, and without limitation, Defendant directly infringes the '208 Patent by making, using, selling, offering to sell and/or importing into the United States IP telecommunications such as Defendant's FaceTime software.
The other patents listed in the lawsuit include 6,108,704, 6,131,121 and 6,701,365.
The patent infringement case presented in today's report was filed in the California Northern District Court, San Francisco office. The Presiding Judge in this case is noted as being Judge Maria-Elena James.
You could find more about the Straight Path IP Group here. Although Straight Patent described themselves one way in the lawsuit, if should be noted that one of the companies within this group, "Straight Path Communications Inc., describes themselves as an "intangible asset monetization company." That's one of the most creative descriptions I've ever heard for a patent troll company.
Like all patent trolls, they didn't invent the technology that they're suing Apple over. They acquired the patents for the sole purpose of suing companies with deep pockets such as Apple.
Of course all patent trolls view themselves as defenders of intellectual property. Yet they purchase the patents to not just defend them out of the goodness of their hearts, but rather to defend their profit generating ability.
A Note about Patent Trolls and Action Being Taken
A 2011 study showed that Patent Trolls cost tech companies $29 Billion and a 2012 study made the case that patent trolling was out of control. In the first half 2013, Apple remained the #1 Target of Patent Trolls. In the second half of 2013 Apple remained in the top three.
On December 5, 2013, The US House of Representatives overwhelmingly passed the "Innovation Act" bill on Thursday aimed at discouraging frivolous lawsuits by patent holders. The move was backed by companies like Apple, IBM, Cisco and Google. House Judiciary Committee Chairman Bob Goodlatte (R., Va.) sponsored the bill, which won strong bipartisan support in passing by a 325-91 vote. Goodlatte said his bill "takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our nation."
In Addition to the new act, the FTC is currently examining the practices of patent trolls or Patent Assertion Entities (PAEs) which are firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency's key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.
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