Patent troll sues Microsoft's Skype for patent infringement

Sen. Schumer proposes legislation to curb patent troll abuses

New York-based patent "monetization" firm CopyTele (CTI), also known as a patent troll, is suing Microsoft (Nasdaq: MSFT) for security patent infringement over its Skype VoIP calling and messaging service.

The suit alleges that Microsoft violated patents held by Secure Web Conference Corp., a wholly owned subsidiary of CTI, for encryption technology used by Skype, CTI said in a release.

"With coverage on web conferencing technology across an industry that generates over $4 billion in annual revenue, these encryption patents are a prime example of the enormous, untapped potential at CTI," said Robert Berman, president and CEO of CTI. Berman pledged to file more lawsuits and "acquire additional patent portfolios from third parties."

According to the complaint obtained by TechCrunch, CTI is suing on behalf of Secure Web Conferencing for violation of two encryption-related patents that involve "secure web-based peer-to-peer communications."

Microsoft is not commenting on the patent lawsuit.

Earlier this year, CTI filed patent lawsuits against AU Optronics and E Ink Holdings for violations of patents for electrophoretic display technologies. It is aggressively acquiring patent portfolios, having purchased two portfolios last month covering conversion systems for loyalty points programs and window frame technology.

Last month, Google (NASDAQ: GOOG), BlackBerry (NASDAQ: BBRY), EarthLink (NASDAQ: ELNK) and Red Hat (NYSE: RHTasked the Federal Trade Commission and Department of Justice to crack down on patent trolls. According to the companies, patent trolls are filing four times as many patent cases today as they did in 2005.

The firms estimated that patent trolls make up 62 percent of all patent litigation and cost U.S. companies $80 billion in 2011.

Senator Charles Schumer (D-N.Y.) said on Thursday that he plans to introduce legislation to curb patent lawsuits by patent trolls by expanding a program under which the patent lawsuits filed by patent trolls would be reviewed and prosecuted by the U.S. Patent and Trademark Office.

The legislation would focus on patent lawsuits filed against high-tech startups, so Microsoft, Google and other large firms would not necessarily benefit. But the proposed legislation is a step in the right direction.

For more:
- see the CTI release
- check out the TechCrunch article
- see Sen. Schumer's release

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