Telstra chased for patent infringement

Summary:Telstra is being chased by a patent-holding company for the infringement of two patents related to mobile commerce technology.

Mobile commerce patent-holding company Upaid Systems has brought action against Telstra in the Australian Federal Court over alleged patent infringement.

The two patents allegedly being infringed relate to Telstra's m-commerce systems for prepaid services and for customers who are travelling overseas and using the BigPond hub to make purchases through Telstra and third parties.

Upaid develops mobile commerce technology in-house, but does not conceive products based on its own patents; rather, it attempts to license out its inventions to companies. Failing this, it enforces its rights through legal action, arguably making it a patent-assertion entity — what is known colloquially as a "patent troll" .

In the US last year, 56 percent of all patent lawsuits were made by patent trolls.

According to Upaid CEO Simon Joyce, Upaid made overtures toward Telstra to form a licensing agreement over the use of the technology in question. When no agreement was reached, the company decided to initiate legal proceedings.

"We have attempted to resolve the matter through commercial negotiation. We regret that we have had to resort to litigation to enforce our rights," Joyce said.

Upaid is seeking an injunction to prevent Telstra from continuing to use the m-commerce technology at issue, as well as material damages for prior infringements.

Joyce pointed out that Upaid has a history of winning its patent litigations against companies in both the US and the UK.

"In the UK, the attacking party lost on first instance and appeal; its application for further appeal to the House of Lords was denied. In the US ... the opposing party settled and admitted to the media that they compensated Upaid with $70 million," the CEO said.

A spokesperson for Telstra told ZDNet, "Telstra respects valid intellectual property rights; indeed, we are a significant rights holder ourselves.

"We are disappointed Upaid Systems has refused our offer of good faith discussions on this matter and instead has chosen to litigate in the first instance.

"We can't comment on matters before the court other than to say we will exercise all our legal rights in this case."

Upaid holds patents in over 30 countries, including the US, Australia, China, Hong Kong, India, Japan, Russia, Singapore, and South Africa.

The patent holder has also begun proceedings against NTT DoCoMo in Japan.

Topics: Legal, Patents, Telcos, Telstra

About

Corinne is sub-editor across all CBS Interactive sites, and joined the company after completing her degrees in Communications and Law, and undertaking a string of internships in law and journalism. Corinne is also a journalist for ZDNet.

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