April 18, 2003

Inventor fights for wireless gaming patent

Doug Storum

Managing Editor

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BOULDER — An inventor living in Boulder has filed lawsuits against Palm Inc. and Cybiko Inc. contending the makers of hand-held game computers are infringing on his U.S. patent relating to the technology required to play interactive, real-time, multiple-player computer games on wireless Palm handhelds and PDAs.

Michael Kagan and Ian Solomon hold a patent issued in April 1997 on technology they invented in 1995 while the two were running Profile Technology Ventures in Jerusalem. Profile was a private incubator, designed to identify technology-based applications with the potential to be commercialized. Kagan, who was born in England and lived in Israel for 26 years, recently moved to Boulder.

Kagan, who holds a doctorate in chemistry, contends that the technology used in Palm’s and Cybiko’s hand-held devices that allow users to play real-time games over local wireless networks violates the patent.

Kagan, Solomon and a few silent investors created Boulder-based Peer to Peer Systems in September, a limited liability company registered in Delaware, to hold the patent and pursue companies they believe are infringing on it.

Peer to Peer also is set up to process licensing to makers of PDAs (personal digital assistants), hand-held computers, cellular telephones and dedicated wireless electronic gaming devices, as well as developers and vendors of interactive multiple player game software. Kagan said the company’s center of operations would be moved to Seattle in July.

The suit against Milpitas, Calif.-based Palm was filed January 23 in the U.S. District Court for the District of Delaware, and the suit against Cybiko was filed Sept. 9 2002.

Kagan said he hopes negotiations prior to going to court would result in the two companies buying a license and paying royalties.

“I don’t want to ruin anybody,” Kagan said. “I just want to license the technology that I believe we invented first.” Kagan would not say what those royalty payments would be.

Kagan said his lawyer, Stephen L. Sulzer of Dickinson Wright, based in Washington, D.C., is in negotiations with Cybiko, a Russian corporation with operations in Chicago. “We are in the discovery stage,” Kagan said, meaning Cybiko has been asked to turn over certain software and engineering documents.

“It is a broad patent, I grant you that,” Kagan said. But he contends that neither Palm nor Cybiko conducted patent searches prior to manufacturing their devices.

In 2000 Kagan learned that Cybiko in Chicago was selling a hand-held device for playing games that would communicate wirelessly with other devices. It had a Web site where a new game could be downloaded each day, Kagan said.

Kagan’s attorney wrote a letter to Cybiko in 2001, explaining of the possible patent infringement, but was ignored, Kagan said.

Phone calls to officials at Palm and Cybiko from The Business Report were not returned.

Defending a patent can be expensive. Patent attorney Carl Forest, a partner in Louisville-based law firm Patton Boggs, said the case of an inventor or a small business with a patent taking on a large corporation can be a very expensive proposition. “I see it all the time,” Forest said. “Out-of-pocket expenses can easily reach $300,000 to $500,000, not to mention attorney fees.

“Nobody wants to be the first to take a license. If other corporations don’t, then they can be at a disadvantage,” Forest said.

Forest said enforcing patents is not an overnight thing. “It can be a stiff row to hoe,” he said. But if it’s a solid patent and worth something, attorneys will work something out on a contingency basis, Forest said.

Sulzer wouldn’t comment on whether or not he took the case on a contingency basis, but said the case has merit. “It was apparent to me that the patent and the effort to enforce it against Palm and Cybiko has merit and is worthy of the effort needed to enforce it.”

Kagan tried to get into the game early on when he came up with the technology in 1995. He pitched a prototype of a device to Nintendo and Sega, but neither company was interested, he said. Kagan also tried to find investors in the late 1990s to manufacture devices, but was unable to raise any capital.

“Nintendo, they closed the door on us, probably because it wasn’t in-house for them,” he said.

Meantime, Kagan and his partners continued to pay for the upkeep of the patent, about $700 once every three years.

“Our gut feeling was that wireless gaming had to take off somewhere down the road,” Kagan said.

And it has. Kagan believes that Ericsson, Nokia and Nintendo, all with wireless gaming devices that allow real-time multiplayer participation, could be in violation of the patent as well. Ericsson has a phone with games imbedded that can be played by two people without going through a phone exchange, he said.Contact Doug Storum at (303) 440-4950 or e-mail dstorum@bcbr.com

Doug Storum

Managing Editor

BOULDER — An inventor living in Boulder has filed lawsuits against Palm Inc. and Cybiko Inc. contending the makers of hand-held game computers are infringing on his U.S. patent relating to the technology required to play interactive, real-time, multiple-player computer games on wireless Palm handhelds and PDAs.

Michael Kagan and Ian Solomon hold a patent issued in April 1997 on technology they invented in 1995 while the two were running Profile Technology Ventures in Jerusalem. Profile was a private incubator, designed to identify technology-based applications with the potential to be commercialized. Kagan, who was born in England and lived…

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