software-based
system for monitoring telephone calling patterns to detect fraud
has won a patent after nine years of scrutiny at the Patent and
Trademark Office. During that time, similar systems have been
employed in the telecommunications industry, and the company
that just won the patent says it now expects anyone using the
technology to now license it and pay royalties.
The patent, number 6,185,415, was awarded to John Boatwright,
a former chief technology officer for the @Comm
Corporation in Burlingame, Calif., which owns the patent. The
application was filed in March 1992, and was held up in part
because of a dispute with another inventor over who was the
first to conceive the idea.
"Since it took so long, this will probably be a
surprise," said William Welling, chief executive of @Comm.
"Since it goes back so far, and companies have been using
this technology for four or five years, and no one has made any
claims, everyone probably felt secure."
Mr. Welling said the company's lawyers had sent letters
seeking to license this technology to all the major carriers and
to the third parties that provide fraud-detection services. He
said the list included AT&T
, Sprint, Verizon and Excel, and
providers of billing software like Compaq and Amdocs
.
By recent standards, Mr. Boatwright's patent spent an
unusually long time in the pipeline. These days, it usually
takes a year and a half to fulfill the patent process from
submission of an initial application, requests for additional
paperwork, examination by patent agency experts and final
issuing of a patent number. And the Patent and Trademark Office
says it is still trying to trim that schedule.
Historically, American inventors won a patent for 17 years
from the date the patent was issued. But in 1995, the law was
changed to award patents for 20 years from the date of the first
filing. Now anyone filing a patent and deliberately dragging out
the examination process would also see the patent's term eroded
in the same period.
The long delay in granting Mr. Boatwright's patent was not
deliberate, though, resulting from the administrative processes
that arose when the Patent and Trademark Office required that he
and another inventor resolve their dispute over who first
invented the technology. The other inventor eventually withdrew,
Mr. Welling said.
Because Mr. Boatwright's patent application was originally
filed in 1992, it has a term of 17 years from its issuance last
month. That still gives @Comm plenty of time to pursue
royalties.
Mr. Welling said the patent was broad enough that the
technology could be applied to any phone system. "It's a
profiling scheme," he explained. "The profile is of an
individual user or phone number, and you profile the pattern of
calling."
He compared it to cubbyholes for mail, with several
representing local, long-distance and international calls, and
others for time of day and day of week.
"The system gathers information on calling patterns from
users and phone numbers, and measures and keeps track on a
moving-average basis," he continued. "Say a 14-day
moving average. If, as the days progress, usage starts to exceed
the average in one cubbyhole, an alarm will go out."
Once the system detects an irregularity, it can automatically
restrict access. It might ask the caller to provide a password,
or it might transfer him to an operator who asks more detailed
identifying questions. It might also simply cut him off from
making any more calls.
The system would also send a message to an office or
headquarters that something out of the ordinary is going on with
a particular user's calling authority. The whole system can be
automated so that it does not require a person to analyze the
calling pattern or impose any of the restrictions on the caller.
Mr. Welling said telecommunications companies already use
similar profiling technologies to look for fraud in calling
patterns with telephone credit cards, for example.
"They have in their computers your pattern of usage, and
if there is a discrepancy, they flag that," he said.
"What they're doing is what we are doing here with this
patent."
Though @Comm has notified the major carriers that it intends
to defend its patent, Mr. Welling said none of those companies
had yet to respond. And he acknowledged that his company did not
know how much to expect in royalties from what the
telecommunications industry spends on efforts to eliminate
fraud.
"All we know is what is reported by various consulting
groups about a broad calling category labeled `tel- abuse,'
" he said. "That's a catch-all for abuse and fraud,
and long-distance fraud is considered to be around $3 or $4
billion. So there's an active effort to limit toll fraud."
Clearly, @Comm would like a piece of that effort, though Mr.
Welling added, "We're not talking about hundreds of
millions of dollars, but a much more modest number."