Posted: 03/2002

INDUSTRY NEWS

Telemac Wins Patent Infringement Lawsuit

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Federal District Court in Oakland ruled USIntellicom’s prepaid wireless system infringes Telemac Corp.’s 5,577,100 patent for a network-independent prepaid billing system. The court ordered Pre-Cell Solutions Inc. (dba Dual Point Communications) and its wholly owned subsidiaries, USIntellicom (USI) and Pre-Paid Solutions dba EZ Prepaid, to pay damages to Telemac of $7.4 million plus Telemac’s reasonable costs of the litigation.

The court next will consider a permanent injunction to prohibit continuing infringement and require that all phones containing infringing software be deactivated.

Telemac’s chairman and CEO Kenin M. Spivak stated: “We are gratified by the court’s ruling that USI’s prepaid system infringes Telemac’s ‘100 patent. Telemac has expended more than $30 million over 10 years to develop state-of-the-art network-edge accounting and billing solutions for the wireless industry. This ruling demonstrates that no Johnny-come-lately can arrogantly take Telemac’s inventions, undercut Telemac’s pricing, and deprive Telemac’s inventors and investors of a return for their genius and risk.”

Pre-Cell Solutions this summer closed its Melbourne, Fla., headquarters, blaming costs resulting from the patent litigation. While the company has said it planned to keep its USI division operational, PHONE+ was unable to confirm this is the case.

Pre-Cell Solutions merged with USI, a provider of prepaid cellular handset technology and web-based customer support systems, and Pre-Paid Solutions in June 2000.

Spivak says Telemac will seek an injunction to prohibit USI and its licensees from using the system. The injunction would require deactivation of infringing phones by all USI licensees, except equitel Inc., which has entered into a settlement agreement with Telemac to permit its continued use of USI technology in analog phones.

At trial, USI’s attorneys told the court that USI had misrepresented its capabilities and does not use automatic over-the-air communications means to activate phones, replenish accounts or update other configurations, all of which are features of Telemac Technology. The court held that USI’s system infringes Telemac’s ‘100 patent.

Previously, Telemac settled its patent infringement lawsuit against an unrelated service provider when the service provider acknowledged the validity of Telemac’s patent rights and entered into a license with
Telemac.

Telmac also has a more recent U.S. patent (6,198,915) and 20 patents recently issued to Telemac in Europe, and other international patents.

Blackstone POS Earns U.S. Patent

Blackstone Communications Co. announced the approval of the first of many anticipated U.S. and worldwide patents for its Blackstone POS, which integrates processing of major credit cards and
ATM/Debit/EBT cards with the sale of prepaid products and bill payment services, into one terminal.

Blackstone developed its point-of-sale system using customized applications and software supported on the Hypercom ICE 5500 point-of-sale platform.

John Marshall, Blackstone’s Prepaid Systems Division president said, “In recognition of the Blackstone POS terminal and system’s novelty, the United States Patent Office has agreed to grant Blackstone broad rights to protect its exclusive technology against market copyists, including those who sell essential components of the terminal and system.”