RATES TECHNOLOGY INC. WANTS TO BE YOUR GATEWAY TO COST-ROUTING VOIP: Big news has surfaced that Google was sued in October by Rates Technology Inc. (RTI), holder of US Patents 5,425,085 and 5,519,769. The applications for these patent were respectively filed in the USPTO in March and And April of 1994. In the complaint filed against Google (view copy of complaint here, courtesy of searchenginewatch.com), RTI alleges that the recently-launched Google Talk VoIP infringes both of these patents.
After skimming through the patents, it is apparent that VoIP was not the main focus of the patents - however this is not preventing RTI from interpreting the claimed features as being applicable to VoIP. While VoIP hasn't really "emerged" until the last 5 years or so, it can be argued that the technology is merely a commercial realization of the experimental Network Voice Protocol invented for the ARPANET in 1973.
The patents cover "least cost routing" of telephone calls, and also claim a specific device for implementing the routing. The '085 patent claims the following:
1. A device for routing telephone calls along a least cost route originating from a first telephone to a second telephone having an associated telephone number via a network having a plurality of alternate communication switch paths corresponding to different carriers which can be chosen to route the call and normallyproviding a current to said first telephone when said first telephone is in use, comprising:
a housing forming an enclosure and comprising first jack means for connection to said first telephone and second jack means for connection to said network
switch means operatively connected to said first jack means for disconnecting said first telephone from said network,
means operatively connected to said switch means for generating a current through said switch means to the first telephone, corresponding to a current provided by said network,
database means for storing billing rate parameters for determining a least cost communication path for call corresponding to said telephone number,
means operatively connected to said switch means for detecting and storing said telephone number originating from the first telephone means for addresssing said database means for identifying a plurality of communication switch paths to to said second telephone and the cost rate of each path,
means for comparing the cost rate of each path so as to determine a least cost route, and
means operatively connected to said switch means and said second jack means for generating a number sequence corresponding to a desired carrier so that said call is routed through said second jack means to the selected communication path and carrier to establish a switched connection between said first telephone and said second telephone phone.
And the '769 claims the following:
1. A method for updating a database that stores billing rate parameters for a call rating device used for cost determinations for a calling station, comprising the steps of
connecting at a predetermined time and date via a data transfer line the call rating device to a rate provider having billing rate parameters for a plurality of calling stations,
transmitting over the data transfer line indicia identifying the call rating device and the date and time of the last update of the billing rate parameters,
verifying if billing rate parameters should be updated, and
transmitting from the rate provider to the call rating device the updated billing rate parameters when the rate provider determines that an update is required.
The USPTO transaction history for each of these patents may be viewed here and here. As you can see, RTI is likely trying to apply the claimed features to the voice router/phone adapter found in most VoIP configurations.
Some problems that pop out after reviewing the claims is that the '085 patent is replete with means-plus-function claims (i.e. database means, switch means, etc.). Under normal circumstances, such claims are interpreted more narrowly than normal patent claims. Furthermore, if RTI wants to apply the doctrine of equivalents to these claims, the legal analysis is an absolute nightmare (for patent practitioners, this is the "equivalent of an equivalent" situation that has sometimes vexed the Federal Circuit). Then again, this could work to the advantage of RTI, since Google will have to spend considerable time establishing non-infringement and invalidity positions.
A second problem I see in the '769 patent is that each of the independent claims require a rate provider to provide billing parameters - as far as I know, no such steps are performed by Google.
Rich Tehrani has an excellent expose' on RTI, and provides some very interesting information on the litigation habits of the company on his VoIP Blog:
- Overall, RTI claims to have agreements in place with 700-800 companies and have litigated 25 times in 15 years.
- RTI has agreements in place with 76 large companies such as Huawei Technologies, Lucent, and Cisco at this time. The company claims that larger companies "understand how intellectual property rights work in the US while the smaller ones usually don't."
- RTI claims that the '085 and '769 patents generally apply to hybrid cellphones, gateways, IP Phones, IP PBX's, edge routers, core routers, PC computers, ITSPs, and VoIP products, services and technologies, among several other telecommunications products, services and technologies.
- Mitel Networks was sued for $945 Million; Alcatel was sued for $1.155 Billion; and their default is pending in USDC EDNY. Hello Direct, GN Netcom and GN had been sued by RTI for patent infringement, and they recently settled with RTI; the terms are being kept confidential.
- RTI's licencing strategy doesn't extract royalties for the lifetime sales of a product, and only asks for a one-time fee.