TECHNOLOGY November 8, 2006, 10:10PM EST
NTP: A Taste of Its Own Medicine
The company that initiated a patent battle with BlackBerry maker Research In Motion is now being sued over credit for its patents
by Arik Hesseldahl
The people behind the Virginia holding company NTP struck gold when they settled a long-running patent dispute with Research In Motion (RIMM) for $612.5 million in March. They hope to do it again with a similar lawsuit against handheld maker Palm.
By way of reminder, NTP says it came up with the technology used by both companies to provide wireless paging services. But now, Oren Tavory, a 43-year-old software developer living in West Palm Beach, Fla., says he got there first. Tavory says he did much of the work developing the technology behind NTP's patents. And since NTP has spun those patents into a big payday with hopes of another, Tavory says he deserves part of the credit for the patents, and some of the payouts, too.
In September, Tavory filed a lawsuit against NTP in U.S. District Court in Richmond, Va., demanding that a judge issue a court order naming him as co-inventor on seven NTP patents, and accusing NTP of copyright infringement and unjust enrichment.
Understanding Tavory's complaint requires going back through the annals of NTP's history (see BusinessWeek.com, 12/8/05, "The BlackBerry Widow's Tale"). Armed with a computer science degree conferred by the University of Miami in 1985, Tavory went to work for a firm called Telefind, based in Coral Gables, Fla.
NTP's founder, Thomas Campana, owned a small stake in Telefind, which operated a national wireless paging network. Before his death in 2004, Campana also owned a contract engineering firm called ESA Telecom Systems, based in Chicago, which he founded in 1971. ESA had been hired by Telefind to develop a system for delivering e-mail to wireless pagers. By 1990 that work had gotten the attention of AT&T (T), which had hoped to use the technology on the Safari, a line of laptops the telecom giant was selling at the time. Despite having demonstrated the technology at a trade show, AT&T ultimately killed the project.
According to Tavory's complaint—he was not available for an interview—he had been hired as an independent consultant to maintain billing software running on Telefind's paging computers. During that time, he says he thought up the idea for delivering e-mail to his pager so that he could review messages while outside of the office. In those days, pagers were used primarily as a means for ferrying phone messages, and e-mail wasn't yet in common use.
WHEN PAGER MET LAPTOP
Tavory says he implemented the idea by writing code to forward e-mail messages to a pager. As word of his idea spread around the office, it wasn't long before Telefind approached AT&T with the idea to enhance the Safari laptop. The idea was to take a Telefind pager, connect it to the Safari laptop by way of a cable, and give the laptop the ability to display an e-mail message sent to the pager. AT&T was interested, but wanted to integrate the circuitry of the pager directly into the laptop. About that time, Tavory says he went to work for Campana's main company, ESA, on a confidential basis to polish the software, while Campana worked on the hardware, looking for a way to combine the pager and the laptop.
It didn't work. Hardware problems caused stability problems in the software, Tavory says. AT&T lost interest, and Telefind went bust and stopped paying its workers. Tavory stopped working on the project in 1991. Bound by a confidentiality agreement, he never told anyone about the work he did for ESA, and went on with his career. Until recently, he worked for Vistar Technologies, a health-care software company based in Wellington, Fla. (He's involved in an unrelated lawsuit over the ownership of that company, his lawyers say.)
But Campana didn't forget, and along with two other ESA employees who worked on the system, Gary Thelen and Mike Ponschke, filed for patents on the system. The three are listed as inventors on the patent applications. Tavory says he's not listed as a co-inventor "through omission, inadvertence and/or error," and is seeking to change that.
Tavory's attorney, Don Conwell of the Tampa firm of Conwell Sukhia & Kirkpatrick, says his client is seeking the credit due him and is prepared to show evidence that he was a co-inventor of the technology. "We have a number of people who will substantiate his testimony," Conwell says. "He demonstrated the software internally at Telefind before Telefind had any relationship with AT&T."
Were he to prevail in the lawsuit, Conwell says, Tavory would have the right to grant licenses to the patents to companies such as Palm. "There are a lot of people who would love to have access to this technology," Conwell says. "As a co-inventor he would have the right to grant license rights."
The question of Tavory's role arose—and was settled—during the legal battle between NTP and RIM, says James Wallace, an attorney for NTP. "RIM had argued that Tavory was the true inventor of the technology and that argument was rejected by the jury," Wallace said. "Tavory said in a videotaped deposition that he didn't remember anything about this. We don't dispute that he wrote some of the code. That doesn't make him a co-owner of the patents or the copyright."
Conwell has a different take. He says that during the height of the legal battle between RIM and NTP, Tavory was asked to work as a consultant on the case by both sides but declined. When asked during a deposition about particular meetings and trips, Tavory's memory was hazy, Conwell says. But when asked whether he was the author of certain sections of software source code, he said in the deposition that he was, Conwell says.
"At the time he was subpoenaed in the NTP-RIM litigation he had no idea what it was about," Conwell says. "Both sides tried to hire him as a consultant and not knowing what it was all about, he didn't want to get involved."
Conwell acknowledges that the patents in question are still under review by the U.S. Patent & Trademark Office. During its legal fight, RIM argued to the patent office that the patents were awarded to NTP in error. In several instances the patent office has agreed. In April, 2005, it rejected one of the five NTP patents at the heart of the dispute (see BusinessWeek.com, 4/8/05, "Did RIM Pay Too Soon?"). The rest of the disputed patents were rejected by September, 2005 (see BusinessWeek.com, 9/30/05, "A Red-Letter Day for BlackBerry").
That review process is ongoing, a point Palm made in a statement issued Nov. 7 in response to NTP's lawsuit. "All seven of the patents asserted are being re-examined by the U.S. Patent & Trademark Office and have been rejected by the re-examiners as invalid.… Palm is disappointed that, after many months of silence and repeated rejections of NTP's claims by the PTO, NTP has chosen to sue on patents of doubtful validity."
A final dismissal of the patents wouldn't help Tavory's case, Conwell says. "We're not seeking to invalidate the patents at all," he says. "We're simply asking the court to add his name as a co-inventor, and to recognize his rights."
Hesseldahl is a reporter for BusinessWeek.com.