ArsTechnica is reporting that a company named Paltalk is suing Microsoft over supposed patent infringements involving the Xbox Live service. According to the referenced article, Paltalk is claiming that the Xbox Live service infringes on two "server-group messaging" patents the company holds. What's interesting to note here is that while Paltalk is based in New York, and Microsoft is based in Washington, Paltalk has filed suit in Texas.
While this may seem odd at first, and Paltalk's claimed reason that they filed in Texas because Microsoft has subscribers in that state may seem strange, the reasoning behind a move such as this makes perfect sense. The district the suit has been filed in is well known both for guilty verdicts in cases like this as well as exorbitant awards. In other words, it's a place that greatly improves ones chances of either winning a case of forcing a settlement. Along these lines, the ArsTechnica article seems to point towards Paltalk being a company that's simply looking for a payout when they describe the brief Paltalk filed;
"In its court filing, Paltalk alleges that Microsoft's Xbox Live (whether accessed on the Xbox or the 360) infringes on two of its patents. The company has suffered damages "in at least the tens of millions of dollars," which raises obvious questions about why they waited four years to file the suit (Xbox Live was launched in late 2002).
The two patents at issue are the '523 patent and the '686 patent, both of which involve server-group messaging. "We have been creating cutting edge services for the entire history of our company," said Joel Smernoff, Paltalk's president. "We are taking an important step to protect our intellectual property rights and continue the important developments that set Paltalk apart."
Microsoft, as a company that runs multiplayer game servers, is alleged to be violating these patents. It's not clear how they're doing so—the initial complaint provides literally no evidence of Microsoft's guilt. The filing instead describes the Paltalk patents and the dates that Xbox Live went, err, live. After five pages of this, Paltalk simply claims that "gameplay on the Xbox or Xbox 360 through the Xbox Live online gaming service infringes the Paltalk patents," then goes on to ask for a jury trial. Presumably, actual information will be released once the trial begins." - ArsTechnica article
For more information on this story, check out the ArsTechnica article at this link - and before you freak out, like the AT article says, this won't mean the death of Xbox Live no matter how it turns out as Microsoft would surely pay any penalties or royalties it had to in order to keep Xbox Live running.
