Amdocs Sues Openet
Service Provider Information Technology (SPIT) giant Amdocs Ltd. (NYSE: DOX) has issued legal proceedings against mediation and policy control specialist Openet Telecom Ltd. , claiming that the Irish vendor has infringed on two Amdocs patents in the FusionWorks mediation platform, which has gained traction with major carriers during the past few years. (See Openet Updates FusionWorks.)
In legal documents filed with the US District Court, Eastern District of Virginia, Alexandria Division, on Aug. 16, Amdocs alleges that Openet has infringed two US patents -- numbers 6,836,797 (the '797' patent) and 7,631,065 (the '065' patent) -- in "hardware and software, including but not limited to FusionWorks mediation products."
The 797 patent, "System, Method and Computer Program Product For Network Record Synthesis," was issued in December 2004. The 065 patent, "System, Method and Computer Program Product For Merging Data in a Network-Based Filtering and Aggregating Platform," was issued as recently as December 9, 2009.
Amdocs claims that Openet's infringement is damaging it "irreparably," and that it is "suffering and will continue to suffer substantial damages in an amount to be determined at trial."
Amdocs is bringing the case in the Virginia court because Openet, while retaining its corporate headquarters in Dublin, conducts much of its business out of its North American headquarters in Reston, Va.
Responding to a request for comment, Amdocs noted in an email sent to Light Reading that it "is the owner of several key technology patents around mediation and core event processing that it alleges Openet is knowingly and unlawfully infringing upon. As stated in the lawsuit, this infringement has caused and continues to cause substantial damages to Amdocs."
Openet, naturally, is in defensive mode. In a statement emailed to Light Reading, the company's chief marketing officer Mike Manzo states:
Amdocs filed suit against Openet in US District Court (Eastern District of Virginia) claiming that Openet is infringing on two patents filed by Amdocs. The case claims that some aspect of the FusionWorks mediation product infringes two Amdocs patents. Openet's FusionWorks product is standards-based and has been on the market for more than a decade with, we believe, Amdocs' full knowledge and without prior objection from Amdocs over that period of time. Openet has retained patent litigation specialists and intends to vigorously defend its right to continue to market and sell FusionWorks mediation products.
Such patent infringement cases usually run for years, as even once an initial ruling is made, there is almost always a lengthy appeals process. Consequently, the legal case is unlikely to bring Openet to its knees any time soon, whichever way the court rules.
But this is a David vs Goliath battle: Amdocs generates annual revenues of around $3 billion and has vast resources (including legal experts) at hand, while Openet, with annual revenues in the tens of millions, is still in growth mode. Amdocs's move is likely to upset Openet's operations -- its carrier customers, which include AT&T Inc. (NYSE: T) and Orange (NYSE: FTE), will likely want to be briefed on Openet's side of the story -- and vital management time, as well as legal costs, will be eaten up.
The move also comes as Openet is considering an IPO, and could affect that process: Legal action from a large company such as Amdocs could deter some potential investors. (See SPIT Watch: iPad, IPO & M&A.)
Of course, Amdocs' action also shows that it regards Openet as a serious competitive threat. While both vendors have long been in the mediation platform business, Openet has had particular success recently in the policy control sector, a market in which Amdocs has also been keen to make its mark. (See Openet Wins at France Telecom.)
And now Openet is looking to be a significant player in other important SPIT niche areas, such as subscriber data management, that the telecom software giants such as Amdocs regard as home territory. (See Openet Unveils Profile Manager, Openet Updates its Policy Manager, Openet Beefs Up Data Measurement, Openet Teams With Netezza, Openet Manages Subscriber Data, and The SPIT Manifesto.)
— Ray Le Maistre, International Managing Editor, Light Reading