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Microsoft Challenges Avistar Patents

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Microsoft Challenges Avistar Patents

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In a rare move, Microsoft has asked the Patent and Trademark Office to re-examine 24 of the 29 US patents held by desktop videoconferencing and wannabe unified communications concern Avistar Communications Corporation citing prior art.

Avistar says Microsoft took the PTO route after six months of unsuccessful business discussions and that the PTO rejected four of the requests on procedural grounds, which it expects will be corrected. Then the PTO has roughly two months to decide whether to re-examine or not and, if it does, that procedure will take six months to two years.

Avistar says it confident it can withstand the scrutiny claiming the challenged patents have been compared to a “large body of prior art” and have successfully withstood two litigations.

Avistar counsel Paul Carmichael, an ex-IBM IP attorney, claims Microsoft’s move is “motivated by its recognition of the applicability of our patents to its products and services.”

In a statement, Avistar CEO Simon Moss said, “We are frankly quite surprised by Microsoft’s action given our lengthy discussions with them. Avistar is going through a significant organizational, technological, financial and cultural transformation. This seems to have been taken by Microsoft as a sign of weakness.”

Avistar has withdrawn and re-submitted for examination against Microsoft’s evidence seven about-to-issue patent applications, theorizing that Microsoft’s got nothing in its hand and that the patents will be stronger when they issue.

The seven patents, described as “fundamental” to unified communications, make broad claims in real-time communications over WANs and relate to technology in video communications, VoIP and instant messaging.

Avistar’s got 80 patents all told in video and networking. Licensees include Sony, Polycom, Tandberg, Radvision and Emblaze-VCON.

Avistar’s settlement and patent licensing income last year came to $16.2 million. In 2006 it was $4.2 million. Even with another $12 million in product revenues it still lost $2.9 million.

Ocean Tomo, a patent appraiser, figures Avistar patents could be worth $350 million-$500 million.

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