After the lawsuits against Google's Print and library program, Google Inc. seems to be in another legal web. This time an American company Rates Technology Inc. alleges that Google Talk's billing of calls made over the Internet is illegal and a patent infringement.
Google Talk is an application that marries Voice over Internet Protocol with IM. The Hauppauge-based Rates Technology in its October suit filed in a federal court in New York questions Google's rights in billing people for a technology that it does not own. The case last heard on 6th December by U.S. District Judge E. Thomas Boyle has few if any details made available from the official channels.
However, Google has issued a statement on Wednesday that read: "We believe the lawsuit is without merit and we will defend against it vigorously". The case was first reported in the Internet site of Search Engine Watch. But as in most patent-related suits, Rates Technology is a relatively unknown company hauling to court a more known Google Inc. With the case being against a registered patent, the motivation may really be the possibility of collecting huge royalties.
According to the lawsuit, Rates Technology holds a 1995 and 2001 patent for reducing the cost of long distance telephonic charges via the Internet, which Google Talk believably infringes. The complainant is seeking besides a jury trial, the enforcement of its patent rights, the claim of damages arising from its legal expenses and losses (of profits and royalties) and a preliminary. It also appears that Rates Technology was also involved in a similar legal spat with Nortel and Sharp Electronics in the past, all involving the patents held by it.
A blog also reported that the CEO Jerry Weinberger and Rates Technology had between 700 and 800 such patent agreements with a history of 25 lawsuits in 15 years. But though Rates Technology patents and litigation seem motivated by potential gains, it is hugely likely that Google would rather settle and get on with business with Gtalk.
In a past interview Weinberger is reported to have claimed that companies would need to shell out at least a million dollars in legal fees to defend their cases. According to him that would make smaller companies to have a greater propensity to resist. With the potential to halt Google's high-profile effort to enter the voice communications business. Google too has the option of using its deal with AOL to sidestep the litigation, by using the ability for GTalk users to talk to AOL's TotalTalk users or alternatively licensing the latter's VoIP technology.
The unwelcome lawsuit at a time when Google hopes to focus on getting its new business off the ground, is however likely to take away crucial management time. After all only in August did GTalk make its debut with the tagline: "They say talk is cheap. Google thinks it should be free".
With a future that treads in the path of telecom, cable and satellite broadcast companies, Google hopes to harness the USP of "triple play" to its advantage. Given that this case is likely to drag (the next hearing scheduled for February 3), it may either take the easy way out to settle or alternatively follow the way Nortel Networks fought RTI's patent case to prove a point.
