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January 26, 2004

New License Fee May Face Operators

By Nancy Gohring

A patent awarded to Nomadix last week could force hotspot operators to pay royalties to Nomadix or change the way their networks work: Nomadix received a patent for technology that it claims it developed first which allows hotspot operators to redirect customers to a sign-up page, often referred to as a “gateway” page, when they first fire up their computers. “We’re the first to develop this technology and we’ve been doing it for a while,” said Joel Short, chief technology officer and senior vice president for Nomadix.

Many hotspot networks, particularly the larger ones that charge for access, redirect customers to a specific home page where they can sign in or pay for access. Often their methods for redirect were developed in-house. Redirection involves the access point or back-end system capturing any Web page request from an unauthenticated user on the network and redirecting them to a page that contains login or usage information.

“Some have copied what we’ve done,” Short said. “We stand behind our intellectual property and now we’re going to encourage those folks who provide that method to license the technology from us.”

STSN, Hilton Hotels, and some McDonald’s restaurants have licensed Nomadix technology, but T-Mobile, Wayport, Cometa, Surf and Sip, and other hotspot operators don’t have licenses. STSN and Nomadix have both received investments from the Intel Capital wireless fund.

Most of the non-licensed operators have been reluctant to discuss the new patent. Cometa declined to comment on the matter. T-Mobile has been working on a comment since the middle of last week but has yet to provide a reaction to the new patent. Wayport and Surf and Sip are looking into the issue further before commenting.

If Nomadix chooses to pursue companies that use redirect without licensing its technology, the operators will either have to pay license fees, argue the reasonableness of the patent in court, or forgo using redirect. Redirection allows new or existing customers to avoid installing client software for connecting to a network, although some networks are moving towards requiring special hotspot software, which would sidestep this issue.

Many free community networks have also used redirection as a method of asking users to acknowledge that they are agreeing to a set of principles to use the free networks. Schlotzsky’s Deli and many free or sponsored commercial networks also employ the method.

Companies are not required to enforce patents as they are trademarks; a patent holder can cherry pick specific targets for licensing or litigation without losing the use of the patent.

(We continue this discussion with the analysis of this patent’s effect on the NoCatAuth open-source authentication gateway, and the patent’s standing in general, by a Wi-Fi industry expert in this post.)

Posted by nancyg at January 26, 2004 3:00 PM

Categories: Hot Spot

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