Morgan Lewis

Patent Controversy Over Customer Service Call Centers

By Jay H. Calvert, Jr., Dan Golub

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Morgan Lewis Title

  • published on:

    April 2002

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Your company’s customer service phone center could soon receive an unwanted call. An individual named Ron Katz claims that his 40+ business method patents (with thousands of claims) cover automated telephone call processing services widely used by financial institutions and other companies. His representatives have been contacting businesses and offering licenses accompanied by none-too-subtle threats of litigation. Dozens of leading companies have agreed to license Katz’s patents, including AT&T, Bank of America, Citigroup, IBM, Microsoft, and WorldCom. Katz is currently engaged in litigation with other companies, including Verizon Communications in the Eastern District of Pennsylvania. Companies that use automated telephone call processing services are well-advised to assess their phone systems before Katz comes calling.

For many years Katz developed and ran telephone call processing centers to verify credit cards. In the 1980s he began filing patent applications that described business methods he claims to have developed. Katz’s patents are owned by his company, Ronald A. Katz Technology Licensing, LP. In 2001 Katz claimed that his company had collected over $300 million in license royalties since 1996. He also claimed that he was conducting licensing negotiations with “well over one dozen” banks because “we believe a large number of banks utilize our technology.” He is also pursuing other financial institutions. In December 2001 it was reported that T. Rowe Price was suing its insurer to recover the bulk of $6 million T. Rowe Price paid Katz to obtain a license.

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