Google sued for $5bn

Posted on 3 Jan 2006 at 11:07

Technology company Google is being taken to court over the VoIP technology which underlies the GoogleTalk messaging product it launched last year.

A small technology company called Rates Technology Inc is suing the search giant for $5bn, alleging that it owns the patents to two technologies unlawfully used by Google.

At issue is 'least cost' technology which allows a phone system to find the lowest price carrier prior to the call being made. Rates claims that a number of companies - including the Internet infrastructure giant Cisco - have licensed the disputed patent.

We say the company is small, yet Rates Technology has netted billions over the years by licensing patents that it owns. In particular, the company has made a number of licensing deals off the back of patents relating to the emerging VoIP sector. To date, Rates is said to have over 700 licensees.

Meanwhile, a number of other companies have also been sued who have refused to pay up including Mitel Networks for $945m and Alcatel for $1.155bn. According to some reports, the company is also said to have eBay in its sights.

Google says the Rates claim is 'without merit' and says it plans to see Rates Technology in court.

Author: Steve Malone