Ruling May Affect US Prepaid Wireless
A patent dispute between two companies has the potential to disrupt prepaid wireless service for millions of users in the U.S. The dispute is between Freedom Wireless and Boston Communications Group (BCGI), and revolves around technologies used to manage prepaid customers.
An injunction was placed against Boston Communications earlier this week, which gives the company 90 days to stop using the technology or begin paying royalties to Freedom Wireless. A court had also ordered Boston Communications previously to pay $147.7 million in damage and lost royalties.
"Our fight is far from over," E.Y. Snowden, President and CEO of BCGI said. "We will bring our appeal to the U.S. Court of Appeals for the Federal Circuit, which has nationwide jurisdiction over patent issues and is especially skilled at reviewing complex patent cases, where we hope to prevail."
If the company loses, some 3.1 million prepay customers could be affected, including 400,000 from Cingular Wireless. BCGI said it does not provide details of its customers, however it has dealt with Alltel and Nextel in the past.
Cingular, a co-defendant in the case, said that it intends to fight the ruling in court and would ask for a stay in the injunction to allow the company to file an appeal. BCGI will also ask the court for a stay as well.
Verizon Wireless was a co-defendant but had individually settled with Freedom Wireless before the original trial.
In September, analyst firm Yankee Group sharply criticized Freedom Wireless and the ruling that awarded damages to the company, saying it was "a four-employee company with no business operations, services, software or products for sale."
"The US prepaid wireless market landscape has been severely altered from this recent decision," said Keith Mallinson, Yankee Group executive vice president. "The example set by this broad interpretation on Freedom Wireless' patents will not only harm prepaid billing vendors and wireless providers but it will also languish consumer adoption."
Furthermore, the firm asked the court to look further into the "small part" Freedom Wireless' patents play in the process, and urged the affected parties to fight the case vigorously.