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Federal Court Shuts Down Pay As You Go Wireless 422

Posted by ScuttleMonkey from the pay-as-you-go-out-of-business dept.
self assembled struc writes "BCGI has been found guilty of infringing on pay-as-you-go wireless patents owned by Freedom Wireless. This means that cellular providers who use BCGI pay-as-you-go billing systems must immediately stop selling new service. For the next 90 days, as they wind down their service, they will have to pay Freedom Wireless 2.5 cents per airtime minute used PER CUSTOMER. This heralds a farewell to Cingular's Go Phone and Sprint-Nextel's Boost services, both powered by BCGI."
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Federal Court Shuts Down Pay As You Go Wireless More

Federal Court Shuts Down Pay As You Go Wireless

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  • I'm using Cingular's Go Phone (Score:5, Funny)

    by Anonymous Coward on Tuesday October 18, 2005 @07:29PM (#13822857)
    For wireless dial-up access, and I haven't noticed any

  • America (Score:5, Insightful)

    by Monkelectric ( 546685 ) <slashdot AT monkelectric DOT com> on Tuesday October 18, 2005 @07:31PM (#13822868)
    Where you can patent something obvious, and then prevent someone else from doing that obvious thing.

    Lets hang our heads in shame.

    • Re:America (Score:5, Insightful)

      by Anonymous Coward on Tuesday October 18, 2005 @07:38PM (#13822930)
      *shrug* yeah. I've long since realised the whole concept of freedom in the US is lip service to some ideal everyone would like, and everyone has convinced themselves they have, but has long since left on the wings of excess litigation, patents, government regulations and stupid laws. It wasn't until I left here for three years that I saw the reality is not much difference in many places overseas, but at least they're not running around spouting the "we're free" rhetoric and believing it.

      The patent system is part of that whole demise, where so much is said about it being a good thing to protect innovation, but the reality is the opposite. Guess people are really good at convincing themselves what they say is true, and be damned working towards what's said. Walk the walk, etc.

      • Re:America (Score:2, Interesting)

        by Koil ( 786141 )
        What did they patent? The intellectual property of the "pay-as-you-go" business model?? I certainly hope not...

        I have to agree with the parent that it is so disheartening to constantly see these types of lawsuits that do absolutely nothing but fatten the pockets of the companies already in place and empty the pockets of the consumer.

        • Re:America (Score:5, Interesting)

          by mattkinabrewmindspri ( 538862 ) on Tuesday October 18, 2005 @10:11PM (#13823784)
          Apparently they patented the idea of using a database to keep track of your wireless usage [boston.com]:
          Freedom Wireless, a four-person company, has never set up an actual business serving customers; it seeks royalties from companies like BCGI, Verizon Wireless, and Nextel Communications Inc. At the heart of Freedom's 1996 patent is the idea of using a computer to match a cellphone number with a database showing how many paid-up minutes the cellphone owner has, then deciding whether to complete a call.

          I guess no one's ever thought up that particular use for a database before...

          • Re:America (Score:3, Insightful)

            by Saeed al-Sahaf ( 665390 )
            I guess no one's ever thought up that particular use for a database before...

            Apperently not before Freedom Wireless...

            • Re:America (Score:4, Insightful)

              by Jekler ( 626699 ) on Tuesday October 18, 2005 @11:32PM (#13824104)
              I strongly feel that patents should be tied to one's ability to implement the idea. Any jackass can sit around and think up ideas. I really don't like the "I thought of it first!" patent system in the U.S. If you're going to have a patent system, it should be based on who does it first not who sat on the toilet longer.

              • Re:America (Score:3, Informative)

                by pla ( 258480 )
                I strongly feel that patents should be tied to one's ability to implement the idea.

                No offense, but why did this get modded "insightful"? You have a good idea, but missed the target a bit...

                In this situation, the problem doesn't have anything to do with ability to implement (I've "implemented" a not-too-dissimilar system to keep track of my 5GB-per-month GigaNews usage, to throttle myself so I don't run out before the new month starts). Any moron capable of installing MySQL and writing a few queries co
    • I just wonder what patents they violated. That article is incredibly ligh on details and all the links on the page are subscriber only.
    • IS this a patent for pay-as-you-go wireless, or a particular implementation?

      I think this particular patent covers the way they link a phone to an account and properly deduct the right amount of money from the account based on the number of minutes. So the patent isn't "pay as you go wireless", the patent is "a particular method to make this cellular phone system able to handle real-time billing".

      The patent isn't on pre-paid phones, it's on one way of making pre-paid phones work. If you want to start your

      • Re:Well.... (Score:2, Insightful)

        by ericpi ( 780324 )

        If you want to start your own pre-paid phone network, you shouldn't steal Freedom Wireless's way of doing it.

        The problem with that logic is that there are likely only a small number of straightforward ways to "properly deduct the right amount of money from the account based on the number of minutes". Seriously, how many different ways are there to implement

        customer.balance -= (minutes * rate);

        Two independent companies could easily implement this in a very similar (straightforward) way, without "ste

        • unless I am most mistaken, it's a business-model patent (or whatever those are called busines practice or busines method or something like that), so that they own the business model of charging people in advance for minutes.

          I don't know that I'm correct, but I'd be very surprised to hear otherwise.

        • Re:Well.... (Score:3, Funny)

          by negative3 ( 836451 )
          No, I'm sorry, they can't implement it in any form without infringing my patents. You see, I have a patent on the subtraction operation. Everybody who subtracts two numbers without a license from me is in danger of prosecution (thieves, stealing my valuable IP). And don't try that "I'll just add a negative number" because it won't hold up in court (and hasn't).

          You'll be hearing from my lawyer soon concerning your willful, unlawful proliferation of the subtraction operation on a public message board witho

      • Re:Well.... (Score:4, Insightful)

        by MikeFM ( 12491 ) on Tuesday October 18, 2005 @08:09PM (#13823133) Homepage Journal
        You mean the phone counts how many minutes you use it and deducts those minutes from your account as you use them. Gee I never would have thought of doing that. Doh. If it's obvious it shouldn't be patentable. Simply taking a common practice and moving it to a new technology or industry should not qualify as something worthy of a patent.

        Intellectual protection laws are shortsighted and don't work. If you can't keep innovating fast enough to profit then you deserve to go broke. Throw everyone to the sharks and let those who are smart enough and fast enough to stay ahead do so and the rest can get ate up and pooped out.

    • Re:America (Score:5, Insightful)

      by cpu_fusion ( 705735 ) on Tuesday October 18, 2005 @08:07PM (#13823126)
      Yes, let's hang our heads in shame. For a moment.

      Then let's get active and do something about this. If thousands of geeks can't manage to communicate to the millions of Americans how REDICULOUS this crap is, how it enslaves them financially, the injustice of it all .. if we can't communicate that with the INTERNET available, well then we deserve what we have.

      Oh wait. I got to go play World of Warcraft. Nevermind.

    • Re:America (Score:5, Insightful)

      by Geoffreyerffoeg ( 729040 ) on Tuesday October 18, 2005 @08:18PM (#13823192)
      Sorry, but you forgot the word "method".

      America, where you can patent a method of doing something obvious, and then prevent someone else from picking that method out of the many ways to do that obvious thing.

      Three cheers for forced innovation.

      Now if only the patent office knew how to figure out what could be innovated upon - indeed, what patents would encourage innovation, by protecting the innovators and forcing other people to develop alternate methods with useful side results - and what is actually obvious and can't be done differently.

      But I'm inclined to think that there isn't just one way to run pay-as-you-go. For example, you could transfer the whole balance to the phone in some encrypted manner, or you could have the phone check every minute whether the balance expired. You could keep its own true account, or you can model it as a phone with infinite airtime and a forced calling card. And so forth. There's more than one way to skin a prepaid cat.

    • Re:America (Score:5, Funny)

      by thegrassyknowl ( 762218 ) on Tuesday October 18, 2005 @08:27PM (#13823240)

      Where you can patent something obvious, and then prevent someone else from doing that obvious thing.

      You are infringing on my patent:

      My idea is the generic method of using a muscular diaphragm to apply force to a bag made of human tissue in order to draw air into and expel air from the bag for the purpose of respiration!

      Please pay me $0.025 for every breath you take.

    • Patents should have mandatory licensing.

    • something obvious (Score:5, Interesting)

      by John Sokol ( 109591 ) on Tuesday October 18, 2005 @09:35PM (#13823595) Homepage Journal
      I haven't seen the patent first hand, but often something obvious now, wasn't at that time. If it were then why wasn't someone else doing it already.

          I can list many examples of this. The mouse, keyboard, screens, printers, windowing environment, The Internet, an Operating system and even a CPU and the IC chips, were at the time major conceptual steps forward.

        I can't tell you how hard it was to explain what the Internet or even a Network was to people in 1983, they just couldn't grasp it.

        With patents if someone has been doing something then a patent gets filed by another person at later date, then the group getting sued must try to show that, if they can the patent holder will have to pay like multiple damages and costs.

        So as a patent holder you never want to go to court with a weak patent.

        But in practice, most people loose their nerve at the first letter from a patent holder, even if its a weak patent that wouldn't hold up.

        As a result many people end up paying royalties or giving up without a fight, when they really would win and have that patent tossed out.

        I have come to realize much of patent law is a poker game.

        For a large company like Microsoft they look at the strength of a patent and the value of the company holding it and decide is it cheaper to pay or infringe. And same in reverse, even if a patent isn't worth the paper it's written on, if the company they sue can't afford to challenge it, then they win.

          AT&T did this to many companies they felt were competition, file dozens of bogus suite against one company, from many little companies they control, and drive the small players out of business while leaving there name out of it.

  • Well... (Score:5, Funny)

    by Ceirren ( 849938 ) on Tuesday October 18, 2005 @07:31PM (#13822870)
    Looks like they'll be paying as they go! Hahahahaha

  • So... (Score:5, Funny)

    by lenmaster ( 598077 ) on Tuesday October 18, 2005 @07:32PM (#13822884)
    I guess the name "Freedom Wireless" is an ironic choice.

  • Wait one second... (Score:5, Funny)

    by NETHED ( 258016 ) on Tuesday October 18, 2005 @07:34PM (#13822891) Homepage
    I read the article. Is this for EVERYONE in the country? What will happen for all the users of these phones. What about tracfone, they've been at it for YEARS, does this affect them? I need clarification or some unfounded speculation, both would be nice.

    • Re:Wait one second... (Score:5, Insightful)

      by bypedd ( 922626 ) on Tuesday October 18, 2005 @07:42PM (#13822947)

      Furthermore there's the issue of all those people who will be out of a phone, possible their only one. I'm sure they won't be getting a sweet deal switching over to the patent-holding company - Shooting the competition in the back of the head is a perfect way to clear the path to raised prices for consumers forced to switch.

      It's a shame that laws originally intended to protect individuals or the little guys get turned into legal feeding grounds that do nothing but hurt the consumer and the diversity of the marketplace.

      • It's also a potential way to get oneself shot in the back of the head...

        Just saying. I don't use those services myself, but people with nothing to lose (who might need that kind of service) are a group I personally try not to piss off.

        Revenge is a dish I don't want any fucking part of. Particularly when someone's safety might be at stake.
      • From the article, it apears that the existing service will generate a fee of about 2.5 cents a minute. At that rate, they could just license the product and sell the airtime as $0.15 a minute instead of $0.12. That may not eb the current charges but it isn't much different.

        It isn't like the users of the pay as you go type phones can go anywere else. $0.025 isn't going to break someone anymore then they are already. The only difference might be a few wiser decisions on who and when to call. Outside the "qui

    • Doesn't affect everyone (Score:5, Informative)

      by Anonymous Coward on Tuesday October 18, 2005 @08:16PM (#13823177)
      From another Reuters story [reuters.com] on this topic:

      Cingular Wireless spokesman Mark Siegel said the injunction does not apply to the "vast majority" of Cingular's prepaid wireless customers, who use a different type of network technology.

  • One Word.... (Score:4, Funny)

    by Anonymous Coward on Tuesday October 18, 2005 @07:34PM (#13822894)
    BULLSHIT!!!

    You'll NEVER stop me from getting FREE WIFI off of my Pringles Can!!!
    Take THAT FCC!!!

  • After hearing the verdict (Score:4, Funny)

    by Koil ( 786141 ) on Tuesday October 18, 2005 @07:37PM (#13822918)
    He then turned and walked defiantly from the court room, only to sheepishly return and ask "Um....anyone have a cell phone?? I need to call my lawyer."
  • Freedom wireless is crap!

    Why is pay as you go patentable?
    • "Pay as you go" is the businesses model for just about every industry. How many companies in other industries charge you an up front fee just to for the ability to use their service? Just about every service industry is pay as you go. Buying food, gasoline, utilities, clothing, books, movies, etc. is pay as you go. Where is the innovation here? I hope they fight this ruling because this has been done for thousands of years and in my opinion, is a more fair way for the customer. By that I mean, "you
      • The patten isn't about pay as you go exactly. It is about a process for tabulating minutes used and controling the phone without using access codes and such. It apears that some pay as you go phones use this proccesss while other don't. I think the patten ws issued around 94 or so but i cannot seam to find the information about it again.

        BTW, i found the information in another link in the posts here. One of them pointed to the patten.

  • For the sake of free market.. (Score:5, Funny)

    by cybrthng ( 22291 ) on Tuesday October 18, 2005 @07:41PM (#13822944) Homepage Journal
    I hope we can rely on federal court to rid us of these patented monopolies.

  • Business Model Patents Suck! (Score:5, Insightful)

    by N8F8 ( 4562 ) on Tuesday October 18, 2005 @07:46PM (#13822976)
    business model patents [google.com] really are the great evil of the patent world. See it strangling industry after industry.
  • I remember reading about this case a few weeks ago in the Wall Street Journal. The article was entitled "Patent litigants pose growing threat to business."

    The first paragraph brought to light one of Freedom Wireless' founder's criminal past (it involved stolen cars) as well as the fact that the founders had previously gone after GTE for similar issues (alleging stolen trade secret). GTE ended up getting paid $90,000 in legal fees, a statement that GTE had never stolen a trade secret, and a promise never to sue GTE again.

    Fast forward a few years. Freedom Wireless currently does nothing but patent ligitation. These men are patent trolls.

    The Wall Street Journal charges for their archives, but the full text of the same article is available here [post-gazette.com].

    - Neil Wehneman

  • I use Virgin Mobile... (Score:5, Funny)

    by NeuroManson ( 214835 ) on Tuesday October 18, 2005 @07:58PM (#13823066) Homepage
    Does this mean I'm screwed as well?

  • Whew! Safe! (Score:5, Informative)

    by Macgruder ( 127971 ) <(moc.liamg) (ta) (nosmailliw.seidnahc)> on Tuesday October 18, 2005 @07:58PM (#13823070)
    From the summary: "This heralds a farewell to Cingular's Go Phone and Sprint-Nextel's Boost services, both powered by BCGI."

    In regards to Cingular, not exactly.

    Cingular has two forms of prepaid service (GoPhone).

    One is 'Pick-Your-Plan'. You have a reoccuring monthly charge on your credit or debit card which gives you a monthly allowence for service.

    The other is 'Pay-As-You-Go'. You buy a prepaid card off the rack, and use that to make your calls on your cell. As you use it up, you replace the card. That's the part that will be affected by this ruling.

  • It's as crazy as it sounds (Score:5, Informative)

    by Mostly a lurker ( 634878 ) on Tuesday October 18, 2005 @07:58PM (#13823072)
    The patents is question are 5,722,067 filed in 1998 [freedom-wireless.net] and 6,157,823 filed in 2000 [freedom-wireless.net].
    • This is disgusting. Basically it is a patent for 'speed dial'. Rather than relying on the landline method of a user dialing an 800 number, entering a pin code, and then the phone number they want to call--this patent preprograms the phone with the '800 number' and 'pin code' which is automatically sent when the user hits their 'send' button.

      The patent quotes prior art (apparently the call an 800 number method is prior art) and states 'Those skilled in the art will understand and appreciate that the prepaid

    • Ummm, aren't those patents effectively the same, differing mainly in the correction of grammatical errors and some rewording? If so, then did the USPTO effectively issue the same patent to the same company twice? Can they do that? Wouldn't the first patent exist as prior art for the second patent?

      Judging by the looks of the two patents, I'd guess the first patent was written by someone not very skilled at writing patents (or writing in English, for that matter) and the second was written by an actual p

    • I read over the first patent. The description section compares it with prior art landline prepaid plans and then points out that the key improvement here is that the user doesn't have to type in the calling card number. They make the vast intellectual leap of realizing that a cellphone has a UID that can be used instead of a calling card number.

      The most general and interesting claim, #10, states:

      10. A method for pre-paid cellular telephone service, said method comprising the steps of:

      forwarding to a p

  • Might be a good thing... (Score:5, Insightful)

    by PAPPP ( 546666 ) on Tuesday October 18, 2005 @07:59PM (#13823075) Homepage
    Although this is immediately disgusting, in the not-so-long-run this might end up being a good thing, this is putting a kink in Sprint/Verison and Cingular's (the big mean companies with nearly inexhaustible legal resources) business model, who will likely lash out against it. If all goes well for them, it will end up creating a substantial precedent against this kind of business-method patent, which would inadvertently improve the patent law situation in the U.S., if we're lucky it might even catalyze a wider reform.

  • Seems like an excellent rallying cry for reform (Score:3, Insightful)

    by LetterRip ( 30937 ) on Tuesday October 18, 2005 @08:02PM (#13823101)
    I think this could wake up the public to the need for patent reform in a way that other things would not.

    Everyone uses wireless, pay as you go is a fairly obvious idea to pretty much anyone. A sudden skyrocketing price for cell phone calls will piss people off quite a bit.

    LetterRip

  • The system works! (Score:3, Funny)

    by KarmaBlackballed ( 222917 ) on Tuesday October 18, 2005 @08:03PM (#13823105) Homepage Journal
    Let this be an example to those of you that pooh-pooh our patent system. See, it works!

  • On the other hand... (Score:3, Funny)

    by gui_tarzan2000 ( 625775 ) on Tuesday October 18, 2005 @08:17PM (#13823190)
    My daughter has a pay-as-you-go phone. Maybe this isn't such a bad thing.

  • As far as I can tell, the "invention" that requires patent protection is the extension of pre-existing ideas to a prepaid wireless system. Presumably, they could not patent an identical method for postpaid wireless systems or for prepaid wired connections due to prior art.

    Supporters of the patent system claim that companies are only willing to make the investments in R&D necessary to technological progress if the discoveries that result are properly rewarded. To me, hundreds of millions of dollars s

  • If this extends to PayPal as well as credit cards, then all you have to to do is think of a service that requires prepaid access then file a patent, and be an instant millionaire.
  • I have been spending a lot of time in Vietnam recently (6 months of the last year) and while I am there I always use my prepaid mobile phone. It is very sad to see that many companies over there can do it but there is a patent on such a simple idea here in the US.

  • Boost Mobile dead within 90 days? (Score:3, Funny)

    by crimethinker ( 721591 ) on Tuesday October 18, 2005 @08:44PM (#13823331)
    I'm torn - on the one hand, this patent rivals "Method For Exercising A Cat Or Other Animal With A Chase Instinct Using A Laser Pointer" in sheer chutzpah. On the other hand, never having to hear "yo, where you at?" ever again sounds like a great thing.

    /me HATES boost mobile for their gangsta commercials

    -paul

  • Firefly mobile?! (Score:2, Interesting)

    by Krozy ( 755542 )
    I wonder what impact this will have on parents who bought their kids firefly mobile phones. On a related note, I wonder how we can find out what exact brands and subbrands and such are actually affected.

  • Easy patent reform: (Score:3, Insightful)

    by laughingcoyote ( 762272 ) <barghesthowl@eUM ... .com minus punct> on Tuesday October 18, 2005 @08:52PM (#13823370) Journal

    PRODUCE the thing you patented, or lose the patent. Period. And if you are producing it, be treated (and regulated) as a monopoly in that area, since patents by definition grant monopolies. Patents only on real, tangible, physical items-no business methods, no software, no genetics.

    There is NO excuse for the way the patent system is currently. Just because you're the first to do something doesn't mean it's non-obvious. Incremental changes or "improvements" should not be patentable-the inventor of cell phone technology should get a patent, the guy that figures out a better way to use it should not. Nor, generally, should the guy that figures out how to extend range by 10%.

    Hopefully, larger companies continually getting hit by these things will lead them to recognize that pretty soon you're not going to be able to move, breathe, or fart without infringing on something patented. I certainly hope that leads them to reconsider the path they're going down, and use their influence to do something worthwhile for once.

  • Most of the ridiculous verdicts in technical cases come from juries, who have no clue on the subject matter and only vote based on which lawyer gave a better dog and pony show.

    They need to redefine "peers" in "a jury of his peers".
  • Just a little while ago RIM lost their appeal of someone's stupid patent of a product someone else got to market first. It's so retarded.

    Now our government is wrapped around the axle about the Miers nomination, the war in Iraq, energy and budget issues. Another hurricane is steaming toward Florida, the bird flu is spreading everywhere so nothing is going to change for quite a while. I don't think Congress is going to be able to agree on anything significant, and most definitely not patent reform. Even

  • Buy Freedom Wireless stock!

  • Eminent Domain? (Score:4, Interesting)

    by serutan ( 259622 ) <snoopdougNO@SPAMgeekazon.com> on Tuesday October 18, 2005 @11:11PM (#13824031) Homepage
    Local governments can kick people out of their houses for the sake of public works projects, and lately they've been doing it for commercial projects. The federal government can void patents in the name of national security. I'm not in love with either practice, but as long as those are the rules we have to live under why can't the principle of eminent domain be invoked to override a patent claim that denies a valuable service to a significant number of people. Especially if the technology has been in use for a while.

  • The motive seems obvious... (Score:3, Insightful)

    by Gloggy ( 818879 ) on Tuesday October 18, 2005 @11:42PM (#13824152)
    The US has for a long time been trying to export their patent laws overseas. In many african and asian countries it is a mandatory requirement for aid, trade, etc. By systematically patenting every obvious idea under the sun the US can continue it's "Perpetual Economic Expansion" by bringing patent serfdom to the rest of the world.

    Once the US has a hold on the patent system and has established laws worldwide to protect the interests of US patent holders, it will be possible to sit back, let the developing countries do the work, and reap the profits. It's a brilliant strategy.

    People living in developing countries (including me) must do everything in their power to lobby their governments to reject US patent laws. They could well be a noose around our neck and keep us in serfdom forever.

    Hey, at least nothing is changing...

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