NY judge narrows terms in BT Internet patent case

Eric Auchard

NEW YORK: An initial ruling by a US judge has narrowed what British Telecom

can say to prove its claim to have invented hyperlinking, in a high-profile case

that could give BT rights to demand royalties on Internet use.

US Federal Court for the Southern District of New York Judge Colleen McMahon

issued an opinion from her White Plains, NY court late on Wednesday that only

partially accepted the wording of BT arguments that its 1970's patent should

cover modern Internet linking methods.

While neither side was ready to declare outright victory on the strength of

the judge's comments, the momentum appears to have swung to the defendants, who

said they were now considering filing a motion for dismissal.

The judge cast doubt on the relevance of some of the patent's concepts to the

decentralized network of computers now called the Internet, in an interpretation

of arcane computing concepts that could be decisive in a jury trial.

BT's first target is Prodigy, the oldest online access service, which dates

back to 1984 and is now a unit of SBC Communications, the second largest US

local telephone company. If successful, BT has said it is ready to try to force

other US Internet access providers to pay royalties on behalf of millions of

subscribers.

"As has often been the case, BT's construction does not completely

represent the claimed function, while Prodigy's proposal is

overly-complicated," the judge said in her ruling on how to interpret key

terms in the case. A copy of the suit was provided to Reuters by one of the

parties in the case.

BT Group Plc, as British Telecom is now known, believes it holds the patent

covering "hypertext links" -- the illuminated text on a Web page that

enables users to surf from page to page with the click of a mouse.

Potential to dismiss case



US law requires trial courts to define in plain English any disputed
terminology in the patent claim and to describe how the language of the patent

applies to future inventions before such lawsuits can be tried before a citizen

jury.

"She (Judge McMahon) identified a number of key terms on which she sided

with us," said Drew DiNovo, one of a team of four attorneys with

Houston-based Vinson & Elkins. DiNovo argued the preliminary case on behalf

of Prodigy last month in McMahon's courthouse located 25 miles north of New York

City.

"We feel these provide a pretty clear road map to guide us to summary

judgement in the case," the litigator said.

The complications of patent law are made more difficult by thick technical

jargon. Plaintiffs are asking the court to interpret computer concepts set down

nearly 25 years ago, when personal computers, for example, had only just been

invented.

A BT US spokesman declined to comment on the court order. The former British

telecoms monopoly has maintained that Prodigy, with its 3.6 million customers,

violates a hyperlink patent filed in 19977 and granted in 1989, before the

commercial Internet as we know it even existed.

However, several legal experts said that BT's failure to assert its patent in

the 13 years since the claim was officially granted means that it would likely

forego any back payments even if it won the case. Under US patent law revised in

the 1990s, BT's patent stands to expire in 2006.

Already, the case has provoked howls from Internet gurus and computer

programmers who argue that the inventions BT describes were detailed in work by

British and US inventors in the 1960s that have long ago entered the public

domain.

Last month, Prodigy attorneys argued that British Telecom filed the patent 25

years ago with an eye to distribute information to subscribers over telephones

or televisions connected to a central computer. The idea of a highly

decentralized network of computers -- the Internet -- was still a remote fantasy

for all but a few academic researchers at the time, the attorneys argued.

McMahon's ruling challenged BT assertions that the "complete

address" described in the patent was the equivalent of today's URL, or

Universal Resource Locator, that holds the address of information stored on a

remote computer.

The judge asked that any motions for summary judgement, or dismissal of the

BT case, be made by Prodigy attorneys by April 13. A trial is scheduled for

early September.