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Home Government Technology Regulation The patent trolls come to Australia

The patent trolls come to Australia

Litigious US intellectual property specialist Vringo is suing ZTE’s Australian operation for patent infringement. That’s how it makes its money.

Patent troll – “a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic, often with no intention to manufacture or market the product.” (Wikipedia).

One such company is Vringo, which sells ring tones and other mobile apps as a front for its real business, which is ‘the monetisation of intellectual property’. Vringo has filed a patent infringement lawsuit against ZTE Australia, the local subsidiary of Chinese telecommunications company ZTE.

A lawsuit, filed in the Federal Court of Australia in Sydney, alleges infringement by ZTE Australia of patents relating to telecommunications infrastructure equipment and mobile devices. The ZTE products affected include base station and server infrastructure used in mobile networks, and also a ‘number of 4G mobile devices’.

Vringo is seeking a declaration that ZTE Australia has infringed its patents, and is seeking orders restraining ZTE Australia from ‘offering to sell, dispose of, import or use, or keep for sale or other disposal or use, relevant products without the license of Vringo’. It is also seeking damages and interest accrued on any sum found due.

Vringo buys patents – thousands of them – then actively goes after who it can, where it can, whenever it can to either beat them in court or, as often happens, reach an out-of-court settlement. Many people just pay up rather than go through all the hassle of prolonged and expensive legal proceedings, and Vringo has a team of lawyers specialising in this area.

Last year Vringo sued Google. AOL and three other companies over old Lycos patents it had acquired years ago. Lycos, now largely forgotten, was a major search engine in the 1990s. Vringo won the case and got $US30 million. That was a fraction of its ambit claim of US$493 million, but that’s how it works. That’s just one example – Vringo is engaged in constant litigation, and constant patent acquisition.

Why ZTE? Why Australia? The ZTE products in question were developed in China. ZTE is problematic in the US, where along with Huawei it is prohibited from doing US Government work. Litigating against it in China would be difficult, to say the least. ZTE Australia has a major contract with Telstra to supply vanilla low end mobile phones. Australia has a compliant legal system – just the sort Vringo likes to take advantage of.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.