Net2Phone Goes After Skype With New Patent Suit

— June 07, 2006

Internet telephony company Net2Phone has sued VoIP (Voice over Internet Protocol) vendor Skype in the U.S. District Court in New Jersey, alleging patent infringement of what appears to be almost its entire operating system.

There is also a reference in the suit to John Doe defendants, which is unusual in a patent infringement case, according to Howard Susser, a partner with Burns & Levinson.

It is unclear exactly who else would be a target, he told TechNewsWorld. It could be other tech companies that do business with Skype or an unrelated third party. It is conceivable, although not likely, that it could even be users of Skype's services.

"The complaint allegation is fairly empty," he said. "I am not sure what message they are sending and to whom -- but they are sending a message that they plan to go after others as well."

A subsidiary of eBay, Skype presents a rich target on its own. Over the last few years, firms such as eBay, Research in Motion (RIM), Amazon.com and Apple have been sued and sued again by smaller companies alleging patent infringement.

It is easy to paint such firms--often referred to as "patent trolls"--as more interested in the defendants' deep pockets than in resolving an intellectual property violation. While there is no doubt some truth to that--in some cases, at least--in many others the villains are not so clear cut.

Net2Phone maintains many patents related to the one it claims Skype infringes, Susser noted. It filed for that patent in 1995 and was granted it in 2000--longer than the typical two to three year patent process.

The fact that Net2Phone has had this patent for six years suggests to Susser that there were likely negotiations between the two parties prior to this suit.

"Net2Phone had to have been aware of the infringement for years," he said. "It makes one assume that there has been quite a bit of back and forth leading to this suit, although that is not referenced in the filing."

Indeed, there is little doubt that this suit will follow what has become a well-trodden path for tech intellectual property lawsuits. Skype is likely to respond soon, probably with its own countersuit.

Net2Phone is likely to seek an injunction before trial, which Skype is sure to contest. Meanwhile, it will probably be developing a workaround for the patent, just in case. Because Skype is European based, Net2Phone has an additional card to play with the international courts.

"It's just another case in what has become a series of cases in the Internet age," Susser said.

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