Voip-Pal.com $7 Billion Patent Attack Against Apple, Verizon and AT&T

By Doug Mohney May 11, 2016

Apple, AT&T, and Verizon are facing a combined $7 billion in patent infringement lawsuits from Voip-Pal.com.  Exactly how much -- if any -- of that $7 billion actually ends up transferred between companies is an open question given the headaches surrounding patent enforcement.

Who is Voip-Pal.com?  The company's website leads with the fact that it is a publicly traded holding company that acquired Digifonica in 2013 in order to "fund, co-develop and complete Digifonica's suite of patents."  Digifonica started up in 2003 and built and tested a suite of software solutions in the areas of routing, billing and rating; lawful intercept; short number dialing/enhanced 911; mobile gateway; and uninterrupted transmissions.  According to the company, Digifonica built and tested nodes and supernodes in Canada, England, and Norway, spending over $17 million to create a white-lable VoIP service

Voip-Pal says its patent suite is "fundamental to modern telecommunications using internet protocol."  It has a total of ten issued U.S. Patent & Trade Office patents that Voip-Pal says describe inventions to integrate VoIP services with "any" of the telco systems.  "Wherever a metered VoIP or IP communication is routed, it is likely already benefiting from a Voip-Pal invention," states the website.

The patents in the lawsuits were issued between September 2013 and November 2015. Voip-Pal  filed its lawsuits against Apple, AT&T, and Verizon Wireless in February 2016 in the U.S. District Court of Nevada, the state where the company is incorporated. More suits may be pending, given that the company says it has written to more than 50 companies informing them of their patent suite.  Voip-Pal's website suggests  the company's patents affect VoIP, messaging, video calling, bundled voice and messaging over IP, mobile payment, and eCommerce.

Apple is theoretically on the hook for over $2.8 billion, Verizon $2.3 billion and AT&T a mere $1.8 billion, should the lawsuits go forward without an out-of-court settlement or cross-licensing.   Voip-Pal says its patents are being infringed upon by usage of Apple iMessage, voice calling, Wi-Fi calling, and Facetime across the iPhone, iPad, and Mac platforms, with the potential for future royalty payments owned for Apple Watch, Apple TV, iTunes and App Store revenues.

How much Voip-Pal actually gets is anyone's guess.  The lawyers involved are taking the case on a contingency basis, so there's a presumption they'll see something at some point. On the other hand, Apple, AT&T, and Verizon are no strangers to patent disputes, with Apple's battle against Samsung now on appeal at the Supreme Court.  Verizon sued and settled with Vonage in 2006-2007, collecting up to $120 million from the VoIP company for infringement of three patents.

Out-of-court settlement is one possibility, but it's hard to believe that the company has enough leverage to get anything but maybe one to two percent of the actual damages it is asking -- certainly not billions in damages.  Challenging the validity of the patents in question is a typical strategy. Finally, firms will contest initial rulings that go against them and move the battle to the U.S. Court of Appeals, where many are overturned. 




Edited by Stefania Viscusi

Contributing Editor

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