Aug, 2002 : BT Loses Hyperlink Patent Case to Prodigy

📅 August 23, 2002 - BT lost a controversial bid to sue Prodigy Communications, claiming one of BT's patents covered the use of hyperlinks, this week when a US District Judge awarded Prodigy its motion for summary judgment and dismissed the case, saying no jury could find that Prodigy infringes BT's patent.

The ruling is important for all Internet service providers, which might have faced the threat of having to pay licensing fees to BT for hosting pages that contained hyperlinks. If BT had won the case and imposed licensing fees, ISPs would have had to pass those costs on to the customers.
BT pursued the case against Prodigy as a test after the company, and 16 other ISPs, refused the British telecommunications firm's June 2000 request that they buy hyperlink licenses.
The case centered on BT's claim that the Internet infringes on its Sargent patent, which describes a system in which multiple users at remote terminals can access data stored at a central computer, and that Prodigy helps its subscribers infringe the patent by providing them with access to the Internet.
The Judge in the case, Colleen McMahon, found flaws in the claim in March, saying that the Internet has no central computer, and that since the Internet does not infringe the patent, that Prodigy could not be liable for contributory infringement.
McMahon also said that BT's claim that Prodigy's Web servers directly infringe the Sargent patent is incorrect because the Web pages stored on Prodigy's servers did not contain "blocks of information" or "complete addresses" as stated in the patent.