NBA the latest to face patent infringement suit over SMS activities

By Chantal Tode

January 27, 2012

NBA's SMS activities the focus of patent infringement lawsuit

It is not just technology companies that are the subject of mobile-related patent infringement lawsuits these days. Increasingly, the mobile marketing activities of media companies, retailers, sports leagues and others are also the focus of such suits.

In the most recent example, Helferich Patent Licensing filed a suit on Jan. 17 alleging that NBA Properties Inc. and the National Basketball Association infringed its patents by sending a series of messages and content to fans via SMS messaging and various social media sites. Helferich, which does not appear to be operating in the mobile space but does hold a number of mobile-related patents dating back as far as 1997, has also sued the New York Times, CBS and others with similar claims.

“Many mobile companies see patent disputes as a critical aspect of winning market share and revenue in the mobile space,” said Jason Koslofsky, an attorney with ArentFox LLP, Washington.

“As everything moves mobile, media companies that are distributing their content through mobile will be a target of patent holders,” he said.

“Unless there is congressional action, patent lawsuits in the mobile space will only accelerate in 2012.”

Marketers in the crosshairs
The New York Times suit was originally filed in 2010 but did not move forward in 2011 as the patents in question were reviewed. Recently, the New York Times suit was consolidated with suits brought by Helferich against CBS, Best Buy and others, with a status update scheduled for the end of this month.

In another example, Maxim Integrated Products Inc. recently sued Starbucks, Expedia, Capital One and Bank of the West, alleging these companies infringed several patents with their mobile payment apps.

The New York Times suit and others against marketers that are not in the technology space but are using mobile to interact with their consumers have not received a lot of media attention.

Instead, much of the focus has been on suits between OEMs and mobile operating system designers as these have the potential to disrupt consumer access to mobile devices.

However, the suits against marketers are significant, especially since they appear to be multiplying and have the potential to slow the adoption of mobile by marketers.

Will marketers pay?
The companies bringing the lawsuits are typically looking to gain a licensing agreement that would require marketers to pay a fee for the right to use the technology in question.

However, retailers and media companies are already facing significant cost pressures these days and may not be able to justify a licensing fee as the cost of doing business in mobile, even as the number of customers using mobile grows significantly.

“The media focus of the mobile patent wars has been largely on the disputes between the marquee companies of handset manufacturers - HTC, Samsung, Apple - and mobile operating system designers - Apple, Microsoft, Google - meaning that many other patent disputes may be overlooked,” Mr. Koslofsky said.

“The [Helferich] case also appears to have been stayed for most of 2011 while the patents at issue were re-examined at the New York Times’ request to determine if they were invalid,” he said.

However, it is because of the significant growth in mobile that companies such as Helferich, Maxim and others are looking to capitalize on the intellectual property they own. 

If the suits are successful, these companies are likely to move onto other companies with similar lawsuits.

“Microsoft brags that it has 70 percent of Android smartphones covered with licenses from its patent portfolio,” Mr. Koslofsky said.

“Apple continues to engage in disputes with Samsung and HTC over mobile patents across the world,” he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New  York

Comments on "NBA the latest to face patent infringement suit over SMS activities"

1. Rich E says:

   January 27, 2012 at 10:01am

   Took a look at the first patent on their website http://www.hpl-llc.com/port.html. This patent 7,280,838 was filed 2005 however there is Prior Art from 2003 published in the 3gpp MM1http://en.wikipedia.org/wiki/MMS_Architecture#MM1.
   
   Specification here. http://www.3gpp2.org/public_html/specs/X.S0016-310_v1.0_022404.pdf
   
   With some effort, I bet a significant portion of their patents could be invalidated with prior art.

2. Phil Ayres says:

   January 27, 2012 at 9:03am

   As we all try to increase innovation and entrepreneurship in this country, it seems that the one thing to hold it back will not be lack of talent or access to capital. It will be fear of being sued for accidentally coming up with an independent idea and having no way of knowing that it is covered by a patent from the late 90's. Is this really what patent protection is in place to achieve?