According to an Associated Press (News - Alert) (AP) report, the New York Times along with many others is being sued in a patent lawsuit for sending text messages with Web links to mobile phones.
In fact, the NYT is leading the defense of a diverse group of companies that assumed that this technology was free.
AP reporter Ryan Nakashima wrote that this technology 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. The AP report indicates that Helferich was granted several patents on the method. “Thus, giving him the right to sue companies that use it without permission,” wrote Nakashima.
The inventor’s company Helferich Patent Licensing (HPL) has filed 23 suits against companies since 2008. The companies charged with infringing HPL intellectual property (IP) range from Best Buy (News - Alert) to the National Basketball Association (NBA).
Additionally, the report indicates that HPL is offering these companies a chance to settle by paying a one-time fee of $750,000. “Many companies would gladly pay, rather than getting bogged down in a court fight that could cost millions,” he added. The report suggests that some 100 companies have already settled with HPL, including Apple. The Walt Disney (News - Alert) Co. and McDonald's.
Commenting on this situation, the Times' General Counsel, Kenneth Richieri, said that he wants to prevent Helferich's patents from becoming a burden on activities that are commonplace in the digital age. "In some ways, it's a tax for being on the Internet," stated 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."
Nakashima wrote that if the newspaper loses, the company will likely pay more than the initial flat fee of $750,000 and that the company was using the technology to alert readers by mobile phone of breaking news or severe weather conditions.
Some are calling it patent trolling, which is legal. According to PatentFreedom, in 2011 entities like HPL sued 5,073 companies in the U.S. for infringing on patents that they either got on their own or acquired. That figure is now twice the number of companies that were sued in 2009.
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Edited by Jamie Epstein