BT defeated in hyperlink case

Arguments shot down in court

BT has lost its controversial bid to sue Prodigy Communications over a patent that it claimed covered the use of hyperlinks. US District Judge Colleen McMahon awarded Prodigy its motion for summary judgement to have the case dismissed, saying that no jury could find that Prodigy infringes on BT's patent.

The ruling frees all ISPs from the threat of having to pay a licence fee to BT for hosting pages that use hyperlinks - the building blocks of the web. If BT had won and licence fees had been imposed, the charges would have almost certainly been passed on to ISPs' customers.

BT had contacted Prodigy and 16 other ISPs, including America Online, in June 2000, asking them to buy a hyperlink licence. When they refused, the telco pursued Prodigy as a test case.

The ruling will be an embarrassing blow for BT, which had doggedly pursued the case. Shortly before the case went to trial in February, BT chairman Sir Christopher Bland dismissed suggestions that BT would be wise to ditch the lawsuit.

"The case will go ahead," said Bland at the time. "The idea that we should abandon this suit in order to provide ISPs with a feel-good factor is, frankly, bizarre," Bland insisted. "Everyone sues all the time in the States, anyway," the BT chairman added.

BT appeared to be losing the case almost from the start. In March, Judge McMahon ruled - in what is known as a Markman ruling - that many of BT's claims were invalid. The Markman ruling constitutes the first phase of patent trials and is concerned primarily with putting the words of the patent claim into plain English.

A BT spokesman said the company is disappointed with the result. "We are going to spend a bit of time looking over all 27 pages of the ruling," he said.

Matt Loney writes for ZDNet.co.uk.