Microsoft hit with second Skype patent suit

News 2 May, 2013

CopyTele alleges VoIP service encryption systems infringe its IP.

Microsoft has been hit with a second patent infringement lawsuit in the space of a fortnight, once again focusing on its Skype voice over IP (VoIP) offering.

The suit, which has been lodged in the Eastern District of New York district court, comes from professional patent monetisation and patent assertion outfit CopyTele Inc (CTI), although the plaintiff is its wholly owned subsidiary, Secure Web Conference Corporation.

It is questionable whether software patents act as a reward for innovation in or whether they actually inhibit invention

In a statement announcing the suit, CTI’s president and CEO Robert Berman, said: “With coverage on web conferencing technology across an industry that generates over $4 billion in annual revenue, these encryption patents are a prime example of the enormous, untapped potential at CTI.

“The new management team was attracted to CTI because of the tremendous value of its patents that were masked by its previous business model. We expect to launch additional assertion programs with significant revenue opportunities as we continue to mine CTI’s patents, and acquire additional patent portfolios from third parties.”

It is statements such as this that have, according to Forbes, led some to label CTI a patent troll – a company that engages solely in filing patent suits against large companies  with no other source of income.

This is largely in line with CTI’s own description of activities, as stated on its website.

Berman told Forbes his company invented the technology used by Skype decades ago, adding CTI had been “in the tech development business for 30 years ... [and] only recently moved to patent monetisation as a business model.”

This is the second time Microsoft has been hit with a patent infringement suit in as many weeks. On 23 April VirnetX Holding filed a case alleging the Skype software infringed six of its patents.

VirnetX won a $200 million settlement from the Redmond giant in 2010 over patents relating to private networks.

Commenting on the CTI case, Frank Jennings, tech lawyer and partner at DMH Stallard, said: “Patent infringement claims are big business in the US tech sector and there have been many criticisms of so-called patent trolls.

“There is nothing wrong in principle with buying up patents and then seeking to enforce them. After all, the patent was genuinely granted even if the inventor has then sold it. The real difficulty is twofold.

"First, it appears the process of determining whether a software patent should actually be granted is not as robust as it could be, certainly in the USA. Also, it is questionable whether software patents act as a reward for innovation in or whether they actually inhibit invention."

In April, Google hit out at the practice of patent trolling, jointly submitting comments to the US Federal Trade Commission and Department of Justice with BlackBerry, EarthLink and Red Hat on what the organisations claim is the growing harm patent assertion entities are doing to business in the US.

A Microsoft representative told IT Pro the company was not commenting on the case at this time.