The New York Times Co. is leading the defense of a diverse group of companies that use technology they assumed was free: sending text messages with Web links to mobile phones, reports the Associated Press.
But there’s a patent for that.
Text messages with web links was patented by inventor Richard J. Helferich, who filed an outline of how such a system would work with the U.S. Patent and Trademark Office in September 1997. He was granted several patents on the method, giving him the right to sue companies that use it without permission.
Helferich Patent Licensing offers the chance to settle by paying a one-time fee of $750,000. Many companies pay, rather than getting bogged down in a court fight that could cost millions. Roughly 100 companies have settled with HPL already, it says, including Apple Inc., The Walt Disney Co. and McDonald’s Corp.
PatentFreedom estimates the typical cost of a patent defense is $1 million to $5 million. Taking the low estimate, multiplied by the number of defendants, it sees such suits as a drag on the economy of more than $5 billion a year.
Opponents point out that HPL doesn’t make products or provide services. They say it simply uses patents to seek licensing fees from others who actually do business. Critics label such companies “patent trolls”.
Patent trolling is legal. The patent office doesn’t require inventors to put their ideas into action.
“In some ways, it’s a tax for being on the Internet,” says The Times’ general counsel, Kenneth Richieri. “Millions and millions of dollars collectively is going out of the pockets of people who earned it to people who, in my opinion, didn’t do anything.”
If the Times loses, it’s likely it will have to pay more than the $750,000 that HPL initially sought to continue using the technology. The Times has used it to alert readers by mobile phone of breaking news or severe weather.
Short Message Service (SMS) is a text messaging service component of phone, web, or mobile communication systems, using standardized communications protocols that allow the exchange of short text messages between fixed line or mobile phone devices. SMS text messaging is the most widely used data application in the world, according to Wikipedia, with over 3.7 billion active users, or 74% of all mobile phone subscribers.