Calypso Wireless v. T-Mobile (could determine ownership of seamless cell-HotSpot switching)

On September 10, 2012, in the U.S. District Court for the Eastern District of Texas, Marshall Division, a Markman Hearing was held in the case of Calypso Wireless v. T-Mobile.

In 2004, Calypso was granted a patent ("923") for seamless wireless switching between cell communication and HotSpot communication. That year, T-Mobile signed an agreement with Calypso to examine and potentially use the patented technology with the aim of offering it to its customers. After seeing it demonstrated and getting the specs, CLYW alleged that TM then simply stole the technology and has been using it ever since. FTM, CLYW alleges that most cell companies have been using the 923 patent without paying CLYW a dime.

CLYW has been a troubled company since its inception; some describe it as a scam to defraud investors. But no one disputes CLYW's ownership of the patent.

Recently, a court receiver was appointed to run the company in the place of a BOD that was at least incompetent and may have been actively criminal in an attempt to steal the patent for themselves and leave the 1,600-odd shareholders with nothing. The court has tasked the receiver with running the suit against TM to its conclusion and auctioning the patent, with the proceeds to go to the shareholders (approx. 189M shares outstanding). There is the possibility that more infringement suits against other sellers (includes AT&T) will be filed by the receiver.

At the September 10 hearing, Calypso preliminarily won 23 of the 30 patent definitions in dispute. For CLYW to win against TM and other cell companies, the jury need find that only one of the 23 other defined items has been infringed. In response, TM has hired one of the country's top guns to defend against the suit, which will be tried before a jury in Texas in March, 2013.

This could be another Qualcomm Plus, or it could come to nothing. Winnings could be in the billions or winnings could be zero. But the industry is watching very carefully.

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To: Sense

You are not the first to suggest that part of Calypso’s problem has been suppression of the “holy grail patent 923” by both government and telecomm competitors.

It strains sanity to try to explain why the patent that is the foundation for seamless switching has been used by the entire industry for years without paying a dime to the CLYW stockholders, despite the fees owed from unpaid use of that patent now approaching what some estimate to be 20 billion dollars by 2016. Don’t even get me started on potential damages. CLYW has been mismanaged by an endless procession of bums, neer-do-wells, criminals, and worse who were allowed for eight years to run a public company without ever holding an election of officers. Who were allowed to gift to one another, as well as their wives and brothers-in law, millions of shares and six- and seven-figure “bonuses” and “salaries.”

Say what you want to denigrate iHub: it does contain thousands of postings by stockholders and industry people.

Because of one director, the company has been forced onto the courts, the BOD still there but neutered and prohibited by the court from blowing their noses without the judge’s permission. The CEO has conveniently fled to Paraguay, claiming that he owns 20% of the company, just one more whopper he has told. Another person, who has been slowly skinning CLYW alive for years, and who tried to steal the patent, has now been forced into the unlikely role of saving the company by funding the suit against T-Mobile, with the shareholders — once his mortal enemies — now along for the ride to possible huge rewards.

The preliminary Markman validated the great majority of the patent’s technical definitions. The final order from the judge is expected any day. What will happen at the March trial is unknown. If the jury finds that just one of CLYW’s infringement claims against TM are valid, TM is in big trouble. What is known is that the judge is fed-up with any more delays in a suit that was filed four years ago. TM has hired a lawyer who is apparently enormously expensive and one of the top litigators in this technology. He’d better be. If the jury upholds the majority of the infringement claims against TM — and potentially, the entire industry — that industry will be thrown into chaos. CLYW has the documents that were signed by TM promising to try-out the technology before licensing it from CLYW — and then offered it to customers without paying CLYW a dime.

The long-suffering shareholders (also known as “owners”) may well receive a huge reward. How the issue of the patent’s suppression will be resolved — if it ever is — is unknown.

If. when TM loses (can you say “treble damages”?), we can perhaps expect appeals, but remember, interest on damages accrues at 12%/year.

Posted on 10/04/2012 12:03:04 PM PDT by pabianice (washington, dc ..)

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Sense

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In the Bloggers & Personal forum, on a thread titled Calypso Wireless v. T-Mobile (could determine ownership of seamless cell-HotSpot switching), Sense wrote:

Corruption at the highest levels of government ? Government bureaucrats working to ensure innovation doesn’t succeed, and that giant corporations working hand in glove with government... can suppress innovation, at will ?

The survival of the free market... depends on companies like CLYW being able to succeed... being allowed to compete.

The frauds being practiced inside CLYW and against CLYW shareholders goes WAY beyond a corrupt and criminal management.

I believe the CLYW case may well shake the foundations of the telecom industry... and the markets... and more.

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