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U.S. awards ICQ founders patent for instant
messenger software
The U.S. patent office has approved the ICQ inventors' patent on their technology for instant messaging via the Internet. The office also granted a patent on the entrepreneurs' technology for the transmission of instant messages over cellular networks. The patents will be valid until 2017-2018.
America Online, which bought ICQ with its owner Mirabilis in 1998 for $400 million, can file patent infringement suits against Yahoo! and Microsoft which develop and market similar software for the transmission of instant messages, or, alternatively, can demand the companies pay royalties. An estimated 400 million people worldwide use instant messaging, about 135 million of them ICQ users.
Though the technology is attributed to the Israeli company's four founders - Arik Vardi, Amnon Amir, Yair Goldfinger, and Sefi Vigiser - the two patents belong to AOL.
The request for the Internet messaging patent was submitted in January 1997 and approved about two months ago. In June 1998, the company filed a second application on the transmission of instant messages via cellular networks. This was approved in May.
"America Online has many options open to it," says Reinhold Cohn Patent Attorneys partner David Gilat. "They can decide they prefer to ward off competitors through law suits and use the patents as a strategy for warding off counter-suits." There have been cases in the U.S. where a company received hundreds of millions of dollars in compensation from competitors for patent infringement or for payments to license use of a technology.
A senior source in the Israeli software sector estimated that AOL will avoid filing law suits against its two largest competitors - Microsoft with its MSN Messenger and Yahoo! which develops Yahoo Messenger. "AOL knows such a move would engender a harsh reaction from Internet users, who would see it as an attempt to take over the Internet. For that reason, it is likely that AOL will use the patents as a strategic weapon at least at this stage."
ICQ was established in 1996. One of its first investors was Arik Vardi's father Yossi who began recruiting external investors including then-president of the Manufacturers Association Dan Propper and Arison Investments. In total, $3 million went into the company. When acquired, it had racked up just $30,000 in revenues. The company, now a division of AOL, has been profitable for the past four quarters.
The technological premise ICQ invented wasn't new, but the company's founders succeeded in improving it to make it usable in the age of many communications systems connected to a single network - the Internet. The software allows surfers to identify in real time which members of his "buddy list" are also connected to the Internet, using a massive database that records each member's entry and exit from the Internet. When a user wants to send a message or file to another user, it is done directly using peer-to-peer technology.
The ICQ software earned rapid success among surfers, first illustrating the power of "viral marketing" - a user tells another one who tells another one and so on. When AOL bought ICQ, the company had 12 million users and another 50,000 joining daily.
U.S. research firm The Radicati Group recently projected that the number of computer users using instant messaging will rise from 141 million in 2000 to 1.38 billion in 2004. The report also determines that the number of employees using the technology will reach 687 million in 2004, compared to 28 million who did so in 2000.
AOL has recently begun offering a new version due to rampant criticism that the software included too many characteristics that burden computer resources. The new ICQ Lite offers the basic ability to transmit instant messages.
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