December 17, 2002 1:05 PM PST

Patent creates IM wrinkle

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America Online has quietly secured a patent that could shake up the competitive landscape for instant messaging software.

The patent (6449344), originally filed in 1997, and granted in September this year, gives AOL instant messaging subsidiary ICQ rights as the inventor of the popular IM Internet application. The patent covers anything resembling a network that lets multiple IM users see when other people are present and then communicate with them.

"The claim is it's a system where you have a network; you have a way to monitor who's on the network; and if you want to talk to them you hook them up," said Gregory Aharonian, publisher of Internet Patent News Service, a newsletter that's critical of technology patents. "If you're doing something like that, you're potentially infringing."

The breadth of this definition could create controversy in the industry. AOL's primary competitors, Microsoft and Yahoo, have their own instant messaging services, each with millions of subscribers. With the patent, AOL could technically sue rival instant messaging services for infringement backed by the argument spelled out in the patent.

AOL spokesman Andrew Weinstein declined to comment on the company's future plans involving the patent. Yahoo spokeswoman Mary Osako also declined to comment on the patent. Microsoft did not immediately return calls seeking comment.

IM's roots
The patent is significant because it grants rights to one of the most popular applications on the Internet. Instant messaging services allow people on the same network to exchange text messages with one another in real time. Major Internet companies, notably AOL, Microsoft and Yahoo, have their own proprietary instant messaging networks that have amassed millions of customers.


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AOL's two products, AOL Instant Messenger (AIM) and ICQ, are the two most popular networks with 180 million registered users and 135 million registered users, according to AOL.

AOL acquired ICQ's parent company, Mirabilis, in 1998 for $287 million in cash. ICQ generated no revenue, but it had a registered subscriber base of 11 million to 12 million customers, with a large percentage of customers based outside the United States. Although both AIM and ICQ are divisions of AOL, they never communicated with each other until October of this year.

Instant messaging has been a point of contention between AOL and particularly Microsoft. When Microsoft launched its MSN Messenger in 1999, its subscribers were able to communicate with AIM users, causing AOL to block access and set off a game of cat and mouse. MSN eventually backed off, but AOL's protective behavior set the stage for a more unsightly brawl in the near future.

When AOL's proposed merger with Time Warner was under review with federal regulators, Microsoft clamored for AOL to open its instant messaging networks as a condition to approval. Eventually, the Federal Communications Commission placed limitations on AIM as part of its merger approval, requiring AOL to open its network when offering "advanced" IM products.

Grounds for litigation?
With the new patent, AOL could legitimately ask a court of law for protection against other services emulating it.

That's not to say AOL has any plans to file lawsuits anytime soon, however. Technology companies file patents regularly and use them more as a defensive measure in the event a competitor litigates for other infringement claims. Still, lawsuits involving technology patents occur over many groundbreaking advancements.

The patent granted to ICQ beefs up AOL's legal arsenal. The online giant has other patents involving central software features used industrywide, including its Netscape Communications subsidiary's Secure Sockets Layer (SSL) protocol, which secures e-commerce transactions over the Internet. Netscape also has a patent on Web browser cookies, which lets site operators gather information about visitors.

To date, AOL has not sued anyone for violating its SSL or cookie patents.

The biggest question that remains is whether AOL has a valid argument to stand on should it decide to raise the issue in a court of law. These arguments will be put to test if a lawsuit ever comes to bear.

"Litigation remains the best test of a patent's applicability, validity and enforceability," said Alan Fisch, an intellectual property attorney at Howrey Simon Arnold & White.

 

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