Patent Pasha Ronald Katz Claims Infringement.

Audiotext vendor MicroVoice Applications, Inc. and two of its clients, Palo Alto Weekly and the San Francisco Bay Guardian, have been named as defendants in a lawsuit filed Feb. 8 in U.S. District Court in San Jose, California.

The eight-count suit, filed by lawyers representing Mr. Ronald A. Katz, charges the Minneapolis telepersonals firm and the two alternative newsweeklies with patent infringement. According to Katz’s complaint, “the Asserted Patents generally relate to the field of technology that facilitates interactive communication between computers and telephone callers.”

The complaint also alleges that, “[the defendants] despite having had full actual knowledge of the Asserted Patents, did not agree to or obtain” a license to use the protected audiotext property.

This isn’t the first time that Katz has inserted himself into the business affairs of telepersonal vendors and their alternative newspaper customers.

In February 1996, Phoenix Media/Communication Group’s Tele-Publishing International [TPI] announced that it had signed a licensing agreement with Katz. Under that agreement, TPI clients were forced to pay one percent of their adjusted gross revenue from TPI services, with the fee passing directly to Katz. In return, TPI and its clients were protected from any past or future infringement claims filed.

When the deal was announced, Phoenix Media Communications Chairman Stephen Mindich characterized it as the only responsible course of action. He said that TPI had engaged a “very prominent patent firm” to investigate Katz’s claims, and the firm had concluded that his patents were solid. Without the settlement, Mindich predicted, TPI and its clients would have been faced with expensive litigation and little chance of prevailing in court.

Nevertheless, despite the threat of legal action, MicroVoice refused to settle with Katz.

“I don’t think we’ve infringed, to tell you the truth,” MicroVoice President Wayne Miller told AAN News at the time.

Now, even after being sued by Katz, MicroVoice still refuses to hoist a white flag.

“We didn’t settle with [Katz] back then because we didn’t think we infringed,” says Miller. “The same thing holds true now. We’ve spent a fortune in time and resources researching [Katz’s patents since 1996]. We have opinions from [patent experts] telling us the bottom line is that there’s no basis to take a license because we don’t use his technology.”

In August 1997, Forbes magazine published a profile of Katz stating that his “detractors believe that Katz isn’t an inventor so much as an exploiter of the U.S. Patent and Trademark office.” Harry Newton, publisher of Computer Telephony Magazine, told Forbes, “Katz personifies all the worst aspects of the US patent system. His patents are written in such a vague way that anything that comes along could be construed as violating his patents. Companies pay money just to get rid of him.”

Katz could not be reached for comment for this article.

Miller says that MicroVoice will do everything in its power to protect the interests of its clients whether or not their contract with the company contains an indemnification clause. (For the record, Palo Alto Weekly’s deal with MicroVoice does not include an indemnification clause, while the Bay Guardian’s contract does.) “We’re very confident that we will win this case,” says Miller. “We’re going to vigorously fight [the lawsuit] and we expect to win. Our clients know that and there’s complete support.

“This whole thing is bogus, and frankly, it’s pissing me off. This guy [Katz] is representative of the ugly side of patent law and we’re not going to be deterred by his threats.”

According to Marketing Director Bret Busse, MicroVoice is presently hiring lawyers to represent them in California and plans to file a response to Katz’s complaint in the coming weeks.