The United States Federal District Court for the District of Massachusetts has granted an injunction against Boston Communication Group, Inc. (BCGI) and Cingular Wireless, forbidding them from continuing to sell prepaid wireless services of the type that were found to be covered by Freedom Wireless' patents. The order follows the jury's unanimous verdict on May 20, 2005 that 32 claims of two of Freedom's six U.S. patents on prepaid wireless were valid and infringed by defendants BCGI, Cingular Wireless (a joint venture between Southwestern Bell (SBC) and Bell South (BLS)), CMT Partners, AT&T Wireless and Western Wireless (recently merged into Alltel Communications, Inc. (AT)), as well as the Court's September 1, 2005 ruling that the two Freedom patents at issue in the case were fully enforceable.
"The injunction prohibits any of the defendants from making, using, or selling prepaid wireless services based on the systems found to infringe, either by themselves or jointly with any other companies," said Bill Price, lead trial lawyer for the plaintiff and chair of Quinn Emanuel Urquhart Oliver & Hedges LLP's trial practice. It thus prohibits BCGI and its current carrier customers, including Alltel and Cincinnati Bell, Inc. (CBB), which were named in a recent patent infringement lawsuit by Freedom Wireless, from selling prepaid wireless services using the infringing BCGI systems.
While the defendants are prohibited from adding new customers to the infringing systems from today forward, they can continue to serve current customers for 90 days, but they must pay Freedom a 2.5-cent per minute royalty for any use during that grace period.
Although the jury awarded Freedom Wireless $128 million as compensation for defendants' sale of over 5 billion minutes resulting in $1.5 billion in revenue, the amount of damages continues to rise. On October 12, the Court awarded Freedom Wireless an additional $19.7 million in prejudgment interest to reflect the loss of interest on the royalties that should have been paid over the past seven years of infringement. The Court also granted Freedom Wireless' motion for an accounting in order to assess additional damages for the period between December 2004 and the judgment. During that time period, defendants BCGI and Cingular Wireless have jointly sold an estimated 585 million minutes, which could result in an additional $14.6 million in damages.
Also last week, the Court denied Freedom's motion for attorneys fees and enhanced damages, but clarified that "the evidence fully supports the jury's finding that the defendant Boston Communications Group, Inc., willfully infringed plaintiff's patents" that the "the jury verdict constitutes a fair, reasonable and just compensation for such willful infringement."
On September 28, 2005, Cingular Wireless posted bonds totaling $140.6 million as security for its intended appeal. Cingular Wireless and BCGI will be required to supplement that bond now that the damages have risen to nearly $150 million excluding additional amounts that may be awarded to account for post-judgment interest and royalties for the period covered by the accounting.
Although Freedom has entered into license agreements with Convergys Corporation (CVG) and Telcordia Technologies, Inc. since the jury's verdict, neither Cingular nor BCGI has a license to practice Freedom's patented system.
I cant wait to see whats going to happen after the 90 period. Considering we probably have millions of people on this service, I wonder how many people are gonna wake up one morning to find that their cell phone isnt working anymore...
2. Posted by PunkRock
Sat Oct 22, 2005 6:35 pm
Wow... that's huge. I wonder what they infringed upon?
3. Posted by TheTroll
Mon Oct 24, 2005 11:39 am
I bet its something like the actual computer software that Cingular/ATT uses to run their Prepaid systems.
4. Posted by Majesticking
Mon Oct 24, 2005 2:27 pm
Holy crap...My friend just went form Blue Go service to Orange Go service. He's going to be pissed.
LOL-The judge must have Cingular service.
5. Posted by BigRUSS
Mon Oct 24, 2005 2:38 pm
this is BS you cant patent a utility , thats like saying cox can sell cable because time warner was the first cable company that noone else can sell cable, by saying noother carrier can sell prepaid thats call a monopoly and thats illeagal
6. Posted by Majesticking
Mon Oct 24, 2005 3:09 pm
Cingular says it's only for TDMA customers. Most GoPhone customers are GSM so if won't affect them.
7. Posted by TheTroll
Mon Oct 24, 2005 4:25 pm
Cingular says it's only for TDMA customers. Most GoPhone customers are GSM so if won't affect them.
That dosent make any sense, the GoPhone service was the name for the AT&T GSM prepaid service, the TDMA prepaid service was called "Free 2 Go".
8. Posted by Majesticking
Mon Oct 24, 2005 5:12 pm
Well I read that from a news site. They could have been wrong. I don't know. From what I understand, there are still some TDMA customers using Pay as you go service on their phone.
9. Posted by TheTroll
Mon Oct 24, 2005 5:33 pm
There is still a TDMA prepaid service but i'm pretty sure it's still called Free 2 Go, I work in TDMA care.... I'd like to hear more details on this. The news release was a little confusing/lacking in informaiton.
10. Posted by BigRUSS
Mon Oct 24, 2005 10:14 pm
so troll are you one of theose people who call CC at like 1030 at night wanting us to refill your min because your loosing business????? and then get all mad when we tell you prepaid is closed ???? lol
11. Posted by TheTroll
Tue Oct 25, 2005 9:48 am
I dont ever have any reasons to call CC.. I'm one of those guys who gets a call from some crackhead who calls "at like 1030 at night wanting us to refill your min because your loosing business????? and then get all mad when we tell you prepaid is closed ???? lol"
12. Posted by signalsniper
Wed Oct 26, 2005 12:49 am
JESUS - There is more to this story than is being let out to the public, I assure you! This is funny, because sure enough, Cingular's legal teams will ultimately conquer and squash these peasants and their Patents - hah - you don't think these law suits will come back and bite the asses of the companies seeking reimbursement for infringements?
Technology is a two way street - "the knife-to the butter-to the bread". The big boys' technology will continue to improve - the customer base will continue to grow - legal departments will acquire the best counsel and have plenty of time & resources to protect their own, and soon, little guy is shunned on the playground because he didn't know how to play nicely - little guy is sent packing - he's left out in the cold and his friends have all decided to go play with the most popular kids -
Little guy's monies are grossed in the red and he can't start over 'cause he's got a bad reputation! Heh!
13. Posted by colione112
Sun Oct 30, 2005 1:31 am
This only affects TDMA customers. While it's a small percentage, it equals alot of people because of cingular's size. The next 90 days, you'll see a million advertisements for the go phone(which is gsm only now). I've already started to see commercials everywhere for it, and it hasn't hurt business in my store. I guess people don't read the news or whatever. We've been instructed to push hard to get people to switch to gsm.
It'll all backlash worse against cingular when people come in to add minutes and we're not allowed. More churn.. just what we need.
14. Posted by TheTroll
Mon Oct 31, 2005 10:47 am
The TDMA prepaid service was called Free 2 Go, not GoPhone.....
Post a comment and discuss this story with other readers.
