Congratulations to John Coombs and ShoreTel investors and employees for a successful launch of their IPO earlier this week. Popping with a 28% jump in the first day of trading, the company proved that despite lawsuits filed last week and an ensuing couple days delay, investors ought to be pretty pleased so far.

It was last week's lawsuit by Mitel in East Texas court claiming patent infringement on four Mitel patents that caused the momentary delay in IPO. A case of IPO envy?

Here's the USPTO references to the patents:

  • 5,940,834 – filed in March 1997, this patent is for Automatic Web Page Generator is primarily for PBX functions
  • 5,703,942 – filed in April 1996, is for Portable Phone User Profiles Using Central Computer covers the storing a users' profile and making it available to some group of telephone office switches to provide service to that user. This is a form of providing hoteling services.
  • 5,541,983 – filed December 1994 is for Automatic Telephone Feature Selector which enables the delivery of different services to a terminal depending on whether the user is 'in' or 'out' of the office. The embodiment of this patent is the use of a smart card, for example, to associate with an call center agent's availability for work. See previous blog entry on Mitel VoiceCon showcase.
  • 5,657,446 – filed in November 1994, for Local Area communications server and depicts a scenario where the normal services involved in a telephone call are enhanced through the intervention of a computer and its programming at the moment of call setup, enhancements such as commercials, and special call treatments.

Clearly, the ShoreTel investors don't expect big issues with this case for a couple of reasons:

Patent cases take a lot of time. This is likely to drag on for years.

There's not a lot of money at stake. Depending on ShoreTel's defense, these features affect only a small portion of the ShoreTel offering and probably less than $10 million in revenues if ShoreTel is found to infringe.

Mitel, a private competitor in the mid-market, [See Mitel-InterTel Deal Score] is picking on a newly public entrant, validating their approach while attempting to put a hole into the bottom of the competitors' boat. It's a tricky game, and may have been preceded with an attempt to negotiate royalties, although I've seen no reference to that possibility anywhere.

ShoreTel is probably reviewing their own patent libraries and working up a counter-suit. 

Verizon can get away with this on Vonage, NTP can get away with this on RIM, but Mitel vs ShoreTel may be fraught with risk.

I'm no patent attorney and can't really comment on the validity of these patents and their use by ShoreTel, but I can point out that three of these four have Debbie Pinard as the inventor. Debbie is now at FirstHand Technologies in Kanata. 

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