Phil Wolff

Patent suits are a price of Skype's success

June 7, 2006 01:56 PM

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I've been avoiding Net2Phone's patent infringement suit against Skype/eBay because it pisses me off.
  • Deep pockets draw lawsuits like flies to honey. Is it a coincidence they didn't file in the ten quarters before the buyout? 
  • Who benefits from Skype pain? Following the money (Net2Phone's customers), leads to the same telco and cable oligopolists who are trying to steal the public's Internet. Companies spending more on lobbying than research artfully stall for time, throwing regulatory roadblocks and management distractions in Skype's way. What could be a more effective monkeywrench than to drag Skype's management, engineers, technical partners through endless meetings to rehash history? Time better spent on new products, markets, and operations? Why the fear, uncertainty, and doubt raised around the Skype brand by keeping litigation in the public eye. [This is my rampant, unfounded, unwarranted, paranoid, speculative balderdash, of course. Still...]
  • I don't know the latest suit's merits. Net2Phone diligently wrote US patents during boom and bust. The suit asserts n2p's interest in many patents, each infringed by something Skype may or may not be doing. To defend Skype, Skype's counsel can challenge the facts (did Skype infringe) and the validity of each of n2p's patents. It might take a mountain of prior art to clear each of n2p's patents.
  • Is it leverage? Bigger firms often swap patent rights to keep out of court. Smaller ones use the extortionate powers of patent law to get cash, access to technology, entré to markets, or even acquisition. Does Net2Phone want in on eBay's new intangible and edge markets? On future enterprise markets? Probably not; they supply phone and cable companies with VoIP products for resale.

Small fish suing big sharks is expensive, time consuming, distracting and even dangerous. For the fish. So the stakes better be high enough to justify those risks.

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