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Patent fracas might disrupt prepaid wireless services

BCGI has 90 days to upset its customers

Over three million prepaid wireless customers could lose service in 90 days, if a court denies a patent lawsuit appeal from BCGI (Boston Communications Group Inc).

As part of an ongoing lawsuit filed by Freedom Wireless against BCGI, Cingular Wireless and other wireless operators, the US District Court of Massachusetts ordered BCGI to stop selling some of its prepaid service bureau offerings to operators. BCGI has 90 days to comply and during those 90 days it is required to pay Freedom Wireless a license fee of £0.01 per minute of airtime sold using its service.

Cingular Wireless serves around 400,000 prepaid customers using the BCGI service, and other operators use it to serve an additional 2.7 million customers.

In May, the court ruled that BCGI had wilfully infringed on Freedom Wireless patents and must pay them $128m (£72m) for past infringement. This week, Freedom Wireless' request to add prejudgement interest to that figure was granted, bringing the total liability to $148.1m (£83.3m).

BCGI is to file an emergency motion to allow it to continue selling the services on Monday, while it appeals to the court. If the motion is denied, BCGI vows to appeal in a higher court. BCGI expect the appeals process could take 12 months to 18 months or longer.

The other wireless operators named in the original ruling were AT&T Wireless Services, which has since been bought by Cingular, CMT Partners and Western Wireless Corp., which has been acquired by Alltel Corporation Inc.

In a statement, BCGI said that it didn't infringe on Freedom Wireless' patents and that the size of the award is unreasonable in light of the royalties that any company would have paid to license the patents.

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