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 BTG sees as an infringement of its patents.
At issue are six patents granted by the U.S. 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 predetermined schedule, as is used for antivirus 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 US$29.5 million to Thomas Woolston for infringing, with its "Buy it Now" feature, on a patent he held for fix-priced sales online. Meanwhile, Microsoft is appealing a jury verdict awarding $521 million to a technology company for infringements in Internet Explorer.
"There's a lot of negative news around patents, and it's true that there's a lot of frivolous patent assertions," Burrows acknowledged. "But we've got a 50-year history in the business, and we deal only with things that are serious. We're not frivolous in any sense."
Most patent cases are settled before reaching trial, according to attorney John Ferrell, who chairs the intellectual property practice group of 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 Telegraph newspaper in the UK, 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 licenses.
BTG had revenue of £52.9 million (US$96.7 million) for the year ended March 31, 2004, almost entirely from license agreements and settlements. Its portfolio includes the technology for magnetic resonance imaging and the hovercraft.