Patent office to review VoIP patent

The Electronic Frontier Foundation says C2's wide-ranging patent is invalid

The U.S. Patent and Trademark Office has agreed to review a controversial patent issued in 2001 that is claimed to cover much of the technology underlying VoIP.

The patent, held by a small company called C2 Communications Technologies, is one of 10 that the Electronic Frontier Foundation (EFF) has been trying to strike down for several years through its Patent Busting Project. On Friday, the patent office granted the EFF's request for a re-examination, the EFF said. The digital civil-liberties organization argued that another applicant had submitted basically some of the same technology to the patent office before C2 did.

Patent No. 6,243,373, "Method and apparatus for implementing a computer network/Internet telephone system," is credited to David L. Turock as inventor and is owned by C2, previously called Acceris Communications Technologies. The patent was applied for in 1995. The company, incorporated in Florida, owns about half a dozen patents and doesn't make any products, according to Stephen Weintraub, executive vice president, secretary and chief financial officer at C2. It is a subsidiary of Counsel Corp., an investment company based in Toronto.

In 2006, C2 sued all the major U.S. carriers, including AT&T, Verizon and Qwest, alleging they were infringing the patent. All the carriers settled out of court with one-time payments, according to Weintraub. C2 believes many more companies are violating the patent, as well as another VoIP-related patent owned by C2. Its patents cover most of the technology used in VoIP, though not all VoIP products may infringe them, he said.

With its Patent Busting Project, EFF is targeting patents that it claims are invalid and hurt ordinary people by threatening innovation. In this case, the patent affects a technology that has made voice calls more affordable and that depends partly on independent inventors for new advances, said EFF Legal Director Cindy Cohn.

"VoIP is one of these kinds of technologies that really frees people," Cohn said. EFF is worried that fear of lawsuits by C2 could inhibit developers from making new VoIP products available. Meanwhile, its patent is one that never should have been granted, Cohn said.

In its request, the EFF cited a patent application by Bharat Doshi and other researchers from Lucent Technologies, "ATM network architecture employing an out-of-band signaling network," which was filed in 1994. They were granted Patent No. 5,568,475 in 1996. That application covers many of the same developments in the C2 patent but was never cited by the applicant or the patent office examiner when C2's application was being reviewed, EFF said.

EFF believes part of the problem is that the U.S. Patent and Trademark Office is overburdened by applications covering increasingly complex inventions.

"I don't think that they have the time or the resources that they need to be able to give ... the right kind of thorough evaluation to every patent request," Cohn said. "We're just not living in Benjamin Franklin's time any more."

Lawsuits over this patent couldn't sink the VoIP industry, because it's so well-established, IDC analyst Will Stofega said. But that kind of litigation can slow down advancements while companies fight in court rather than the marketplace, he said. Stofega cited the long battle between Research In Motion and NTP, a case that threatened a shutdown of BlackBerry service several times before it was settled out of court in 2006.

C2's Weintraub downplayed the EFF's effort to have its patent invalidated.

"We don't expect that they'll be successful," he said. Since C2's predecessor applied for the patent in 1996, the company and the patent office both have examined its validity and not found any problems, and the service providers that C2 sued couldn't find a way to strike it down, either, he said.

EFF dismissed Weintraub's assertion.

"It's either a good patent or a bad patent," Cohn said. "It doesn't get better because you managed to squeeze money out of a bunch of people."

The questions surrounding C2's patent probably won't be resolved any time soon. The Patent and Trademark Office is likely to take action on the patent within eight to 12 months, probably rejecting some of its claims, said Nikhil Iyengar, an attorney at Fenwick & West who is representing EFF. After that the patent owner may respond by amending or canceling some of its claims, and working through that process could take another year or two, he said. If C2 files a formal appeal, it may take an additional year or two to resolve the action.

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