Patent troll NTP wins war against Apple, Google, Microsoft, Samsung, and other major tech companies

Who has three letters in its name and just brought down the hammer on pretty much every company in the mobile device industry? No, it isn’t Apple. Or Google. Or Microsoft. Or Samsung. Or [insert name here]. That would be NTP my friends.

NTP Inc. is a patent “holding” company that has been suing major tech companies for the past decade. It first tasted victory in 2006 against RIM, the makers of BlackBerry, after RIM agreed to cut NTP a check of US$612.5 million to settle the dispute between the two. Emboldened by the victory, in 2007 NTP sued the four major cell phone service providers in the USA (AT&T, Verizon Wireless, T-Mobile USA, and Sprint Nextel). Then it followed up in 2010 to sue major smartphone companies of Apple, Google, HTC, LG, Microsoft, and Motorola. Somewhere along the line Samsung, Palm, and Yahoo also came in NTP’s crosshairs.

Going up against the giants of the tech world, some may call NTP crazy. However, NTP isn’t crazy; NTP is clever. You see NTP holds roughly two dozen patents it has been granted since NTP was founded in 1992. Out of these twenty five or so patents, NTP has eight patents that relate to wireless e-mail technology. It is these eight patents that have given NTP the power to sue everyone who is anyone in the mobile device industry.

How exactly did NTP attain these patents? NTP’s founder, Thomas Campana, Jr., is credited with inventing the technologies in question since 1990. Yes, that is right. Thomas Campana was playing with e-mail as early as two decades ago. It is said Campana was granted over 50 patents during his lifetime.

In any case, Nokia, RIM, and two other companies had already been licensing NTP patents. Now you can add Apple, Google, Microsoft, Samsung, AT&T, Verizon Wireless, T-Mobile USA, Sprint Nextel, HTC, LG, Motorola, Palm/HP, and Yahoo to the list: NTP and Silicon’s thirteen reached a settlement agreement yesterday. The details of the agreement have not been released to the public but NTP and its lawyer have released statements saying the settlement allows the companies in question to use technologies covered by all of NTP’s patents (not just the wireless e-mail ones) in exchange for a “financial return” to NTP (i.e. they are paying NTP an undisclosed amount). The following are quotes from NTP and its settlement counsel Ron Epstein, respectively:

“The signed agreement provides broad coverage under NTP’s patent portfolio to all of the companies. All pending litigation between NTP and these companies will be dismissed.”

[The companies involved] “were able to provide a financial return to patent owners that they’re happy with and provide substantial discounts to each of the participating parties.”

My guess is the thirteen paid NTP a sum somewhere in the billions. Not bad for a company that doesn’t actively develop technology.

Interestingly enough, Epstein acknowledges NTP has a reputation of being a “patent troll” but also says NTP wasn’t originally intended to operate this way. According to Epstein, NTP was founded with the intention of building technology and NTP did indeed attempt at building a few products in the 90s; for example, Campana and his colleagues tested e-mail on AT&T’s network in 1991. However, NTP was way before its time and products never really took off because the technology required to sustain the products hadn’t advanced yet. Then in 2004 Thomas Campana, the founder of NTP, passed away and so did NTP’s urge for innovation. NTP might have been the Apple or Microsoft of the 90s had its technology taken off.

I wonder why Apple or Google didn’t attempt to purchase NTP’s patents. Clearly NTP’s patents would have caused a headache for iOS or Android had the other gained rights to them. Or maybe they did try and NTP refused to sell. Who knows.

[via ArsTechnica | Image credit: Engadget]

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12 comments

  1. Mike

    Can anyone imagine trying to develop a new consumer electronics product nowadays? With the Apples, IBMs, Microsofts, Intels, Samsungs, etc.’s of the world pastenting so many things under the sun, a new entrant seemingly would be bound to infringe some patent somewhere. And this is good for innovation (a principal purpose behind the patent system)?

  2. clockmendergb

    hatman:
    Yes I have
    Its a pet hate of mine .
    It was the music that really got me started but I see so many similarities in the way patents are abused
    I cannot help but comment when the subject comes up.

  3. Coyote

    As with most the patent cases they could be resolved by seeing if physical media or proprietary code were stolen. If only a concept was stolen then it’s just asinine to think no 2 people could have the same ideas.

  4. clockmendergb

    @jayesstee:

    Thanks for the response
    as I am not an expert I have ideas that might not be possible in the real world but I only consider those that seem to carry some common sense.

    That,s why I say there needs to be a reasonable time limit on patents held by anything other than an individual.
    Yes in your example selling the widget to a Corporation is of course OK.
    Its just, once its in the Hands of the Corporation there needs to be limitations of time so that this important widget can do as it was intended .
    With technology it all happens so quickly these days that holding a patent on something that is a catch all can and is a detriment to innovation and as I said costs us all in the end because of the enormous costs of litigation

  5. hatman

    @jayesstee: @jayesstee: @jayesstee:

    Apple, Google, Microsoft etc… are criminals. They have stolen. Extortion is a criminal act. NTP has not done that. They have gone after thieves and won but likely lost billions of dollars. Criminals like Apple, Google, Microsoft etc… look at this current agreement as a small fine. Just the cost of doing their corrupt business. They have made much more money from their theft!

  6. hatman

    They owned the patents. Others stole the patents. Licensing would be a very tiny part of the whole cost of the product. These thieves(Apple, Google, Microsoft etc…) go after kids downloading music and programs off the internet.

  7. jayesstee

    @clockmendergb:
    I agree with you to a certain extent. Using purchased patents to extort money from manufacturers without any intention to develop the patent themselves seems immoral.

    However if you devised some process or widget that potentially could change the face of computing and needed mega-bucks to develop it, your only choice might be to sell the patent to a large corporation with the deep pockets needed to fund it. You should be able to specify how the patent is used as part of the deal. However, their lawyers will be ‘bigger’ than yours. If you didn’t get screwed financially, you almost certainly would contractually.

    The bean counters and ‘suits’ always win. What is being reported here is ‘tribal war’ between them. Fine except we the paying punters are always the losers.

  8. Terry Nachtmerrie

    NTP has eight patents that relate to wireless e-mail technology

    A perfect example of why the current patentsystem is failing in these days. Wireless email… Because, SMTP, POP, IMAP are different when you use them on a mobile device.

  9. clockmendergb

    Now I know My ideas do not go down well in the States but I believe absolutely that patents should only belong to those that first acquired them.
    Same with copyright.
    Yes the inventor and the writer deserve some financial gain from their work.
    But it is immoral to be able to profit from an idea just because you have the money to buy it

    In this case the guy who actually applied and got the patents seems to have died.
    that being the case so should the patent.

    There might be a case where a patent could be inherited by an individual but not by a business
    There might be a case for a company to research and come up with an idea but in this case I believe the patent should be limited in time
    10 years seems fair.

    It should also be a lot harder to get a patent that covers a minor but/or significant change to an already existing product and the way it works
    .
    These are the ones that are forever in court and costing everybody money.
    I am open to anothers opinion on this subject of course

  10. hatman

    Ashraf said “I wonder why Apple or Google didn’t attempt to purchase NTP’s patents.”
    hatman says; Because these are 2 criminal organizations. Thieving is 1st nature for them!

    20 Jun 2012 Apple Inc was fined $2.25 million by Australian court for misleading advertising.

    Google faces $22.5 fine for snooping on iPhone and iPad users .10 Jul 2012 *Google used a special computer code(cookies) to trick Apple’s Safari browser in order to monitor users that had blocked such tracking.

    Google fined $25,000 by the (FCC) for impeding investigation of their Street View cars, which collected payload data including emails and passwords from unencrypted Wi-Fi networks.

  11. Mike

    The article title should be changed, as NTP clearly is not a “troll.” And, in fact, the “major players” often do the same thing (while decrying the so-called trolls): if they have a patent and someone is infringing on it, they seek a license or sue, even if themselves not using the patented technology. That’s part of the patent system: no need to actually use one’s own patented technology–the patent is enough.