Hotspot Operators Face Patent Lawsuits

By Ed Sutherland

October 08, 2004

UPDATED Patent mania continues: A company that buys up patents has beat Nomadix to the punch, asking for royalties from providers that use redirected Web pages for logins.

Wi-Fi hotspot operators must pay $1,000 a year, or face a lawsuit from a patent enforcement firm.

Acacia Technologies Group says it is enforcing a patent it says covers the methods that wireless ISPs, WLAN aggregators and other Wi-Fi networks use to redirect users to a common login Web page. The company claims it owns the technology behind gateway page redirection.

A Wi-Fi hotspot customer requesting a Web page will often be redirected to such a page, where the user can be authenticated with a username and password before being sent to the Web site initially requested.

The Newport Beach, Calif.-based company is sending out information packets to Wi-Fi operators informing them of the patent claim and including a licensing agreement. Companies have 30 days to ask questions, sign the licensing pact, or prove to Acacia that the wireless operator is not infringing the patent.

The licensing pact demands that hotspot operators pay Acacia $1,000 a year for up to 3,500 redirected connections -- after which operators would have to pay 5 to 15 cents for each redirected connection.

"Anybody who operates a hotspot with redirection can assume they'll hear from us," Acacia's executive vice president of business development and general counsel Rob Berman told Wi-Fi Networking News.

Berman emphasized that this is not a "shakedown" of mom-and-pop coffee shops that operate a Wi-Fi hotspot.

Austin, Texas-based Wayport—on its way to becoming the nation's biggest hotspot provider through a deal with McDonald's—says it is one of the many Wi-Fi hotspot companies under scrutiny from Acacia.

"Wayport has received a package of materials from Acacia," says Amy Shields, a spokesperson for the provider. The letter seeks "Wayport's acquiescence to a licensing agreement by which Wayport would pay Acacia a usage-based fee."

"Our IP attorneys are reviewing this matter and we are evaluating next steps," Shields says.

T-Mobile USA's response was "no comment," according to Bryan Zidar, a spokesman. Earlier this week, T-Mobile announced it had finished rolling out 802.1X security throughout its 4,700 hotspots using new Connection Manager software. Using the software, there is no redirection.

Berman has said Acacia believes the royalties will not burden small operators, nor stifle the Wi-Fi market.

"We don't think it will have any impact at all on the Wi-Fi industry," Berman told Wi-Fi Planet.

In 2001, the patent in question (No. 6,226,667) covering "controlled communications over a global computer network," was granted to LodgeNet. LodgeNet provides hotel guests with interactive television services. Acacia purchased the patent from LodgeNet in July.

Earlier this year, Nomadix raised eyebrows when it announced it would enforce its own patent (No. 6,636,894 B1) covering how Wi-Fi hotspots redirect users. Acacia appears to have beat Nomadix to the U.S. patent office: the Nomadix patent was filed in December 1999, while Acacia's was filed in January that same year.

"Nomadix has always respected the valid and enforceable patent rights of others in our industry, as we expect our competitors to do the same," said Kurt Bauer, CEO of Nomadix.

"We are communicating with our customers and partners to ensure them that business continues as normal, and we will stand behind them," Bauer said in a statement.

The patent for redirecting Wi-Fi hotspot users joins other high-profile patents that have given Acacia a somewhat infamous reputation. In July, the non-profit digital rights group Electronic Frontier Foundation (EFF) named Acacia's patent for streaming audio or video to the top of the EFF's list of worst patents. Universities, local cable television and online porn outlets were asked to license the patent described as covering "the transmission and receipt of digital content via the Internet, cable, satellite and other means."

Wi-Fi service providers which stream audio or video wirelessly could hear from Acacia, says Berman.

Hotspot operators with questions are urged to e-mail Acacia's Julia Feldman at jfeldman@acaciares.com.

Originally published on .

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