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A British Telecommunications Inc. patent issued prior to the advent of the Internet does not cover hyperlinking, a New York federal judge ruled Thursday. Tossing out British Telecom’s infringement suit against Prodigy Communications Corp., U.S. District Judge Colleen McMahon of the Southern District of New York said no jury could find that Prodigy infringes the patent by providing hyperlinks, the coded, highlighted text that links one Web page to another. British Telecommunications Inc. v. Prodigy Communications Corp., 00-9451 was a test case closely watched by industry, academia and intellectual property lawyers because it will help establish whether older patents can be broadly interpreted to cover Internet-related technology. If British Telecom had prevailed, it was expected to seek royalty payments from Prodigy and other Internet service providers that could have amounted to hundreds of millions of dollars. “About once a year someone surfaces with a patent they claim covers all the Internet, or the equivalent,” said Professor Mark Lemley of the University of California, Berkeley’s Boalt Hall School of Law. With this ruling “a large number of companies dodged a bullet. They don’t have to pay royalties.” “The case clearly establishes that British Telecommunications is not the father of hyperlinking on the Internet,” said Thomas Friel Jr., a partner at Cooley Godward. “An older claim for a simpler system can’t always be stretched to cover something fundamentally new, as the Internet is here.” British Telecom’s original patent application, filed in 1977, covers a system to allow users to access text-based information via a telephone network. The company submitted several successor applications before its so-called Sargent patent was issued in 1989. The Sargent patent describes an improved way for multiple users, each located at a remote terminal, to access data stored on a central computer. Communication between the terminals takes place over a telephone network. McMahon disagreed with British Telecom’s argument that the Internet constitutes a system in which each individual Web server is a central computer in one location. British Telecom’s patent claims “clearly provide that the central computer is one device, in one location,” McMahon wrote. “Therefore, viewing the Internet as a system (as BT asks me to do), it does not literally infringe the Sargent patent, because it contains no such central computer. “Because the Internet itself does not infringe the Sargent patent, Prodigy cannot be liable for contributory infringement or active inducement for providing its users with access to the Internet,” McMahon said. “BT’s argument that Prodigy’s Web servers directly infringe the Sargent patent also fails, because Web pages stored on Prodigy’s Web servers do not contain ‘blocks of information’ or ‘complete addresses’ as claimed in the Sargent patent,” she wrote. British Telecom’s attorneys at New York’s Kenyon & Kenyon could not be reached for comment. “We are pleased with the judge’s decision,” said Prodigy spokesman Larry Meyer. “She has validated our position that the claims were without merit.” Willem Schuurman, a partner in the Austin office of Houston’s Vinson & Elkins, represented Prodigy.

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