Boston Commun: Freedom Wireless Gets $128M In Patent Case

BEDFORD, Mass. (Dow Jones)--Boston Communications Group Inc. (BCGI) said a jury ruled that the company and other co-defendants jointly infringed two U.S. patents held by Freedom Wireless, and awarded Freedom Wireless $128 million for past infringement.

Additionally, the jury also ruled that Boston Communications willfully infringed the patents -- a ruling that could result in up to three times the amount of damages awarded and attorneys' fees.

Boston Communications said it doesn't believe it infringed on the patents. It expects the case to go to a separate non-jury trial and if that court rules against the company, Freedom Wireless may seek to enjoin Boston Communications from providing its prepaid wireless and real-time billing service bureau in the U.S.

In that event, Boston Communications may not be able to continue its ongoing operations or may need to file for bankruptcy, according to a press release Friday.

In the first quarter, Boston Communications' revenue from its U.S. prepaid wireless services was $23.9 million, or 90% of total revenue.

Boston Communications expects the non-jury trial to begin June 7 and to last one to two weeks.

If the court rules in favor of Boston Communications and its co-defendants in the non-jury trial, the patents held by Freedom Wireless would become unenforceable.

However, if the court rules against Boston Communications and the co-defendants, the company expects to appeal and will likely be required to provide collateral or post a bond in order to do so.

Boston Communications said Freedom Wireless filed additional lawsuits Friday in the U.S. District Court in Massachusetts against the company, Alltel Corp. (AT) and Nextel Communications Inc. (NXTL), alleging joint infringement on the same two patents.

Representatives from Alltel and Nextel Communications weren't immediately available to comment on the lawsuits.

Even if Boston Communications is successful in the non-jury trial or on appeal, existing customers may choose to stop using the services and Boston Communications may be unable to obtain any new customers.

These results would have a material adverse impact on the company's business, Boston Communications said.

Shares of Boston Communications were halted in after-hours trading after closing Friday at $4.76. During the regular session, shares closed at $4.76, down 39 cents or 7.6%

-Benjamin Siegel; Dow Jones Newswires; 201-938-5400; AskNewswires@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 21st May 2005