Patent wars over wiretapping VoIP & surveillance backdoors into Internet chats

Woz said Microsoft has become more innovative than Apple, but Voip-Pal may not agree. It claims ‘substantial similarities’ in patents to wiretap Skype and eavesdrop on other VoIP service communications.

After Microsoft acquired Skype, we looked at a Microsoft patent called "Legal Intercept" meant for monitoring and recording VoIP communications. At that time, there were questions about if Microsoft would ruin Skype by making a backdoor for easy spy and pry government and law enforcement access. But a California-based company called VoIP-Pal already had such a surveillance patent that is meant to "allow government agencies to 'silently record' VoIP communications."

The Microsoft patent was filed in December 2009, but a company called Digifonica (International) Limited had filed a similar wiretapping VoIP patent in 2007. Then, in May 2012, VoIP-Pal attained five VoIP patents from the acquisition of Digifonica Gibraltar. One of the five patents is called "Lawful Intercept" and is meant for "intercepting VoIP and other data communications."

According to Infonetics Research, the VoIP services market will grow to 410 million subscribers and will be a $74.5 billion market by 2015. VoIP-Pal quoted that forecasted dollar amount in May when the company successfully beta-tested the newly patented technology on its ground-based server. Then in August, Voip-Pal completed a successful beta test of 'soft switch' VoIP network framework. The company defined Lawful Intercept as:

a revolutionary technology that addresses the national and international demands by governments to enable law agencies the ability to perform scheduled and live intercepts (wiretaps) on Digital Voice telephone conversations. Network Service providers such as Skype may soon want to be in compliance with government regulations regarding Lawful Intercept.

Dennis Chang, President of Voip-Pal, said, "In addition to our ability to license these patents to major players in the VoIP industry, we will have the ability to license our proprietary framework to other VoIP companies to enable them to meet and/or exceed current and future regulatory requirements with respect to areas such as Lawful Intercept and Emergency Services. While our Licensing focus will target significant Partner/Subscribers, Voip-Pal will also be able to generate licensing revenue from the competition as well."

On the VoIP-Pal news page, under the August 9th soft-switch testing press release, it talks about all five patents, including Rating-Billing-Routing engine that will "allow Licensees to setup and deploy Digital Voice solutions virtually anywhere in the world in a matter of days, without fear of infringing on mainstream VoIP patents." It also links to an old 2007 CNET article about Vonage being ordered to pay $58 million to Verizon for infringing on a Verizon Communications patent. Could Chang, formerly an IBM employee, be ready to go head-to-head with Microsoft over the Legal Intercept patent?

According to a press release this month, Chang pointed out that Microsoft's Legal Intercept patent application was filed two years after the Lawful Intercept and that "there are substantial similarities between Voip-Pal/Digifonica's Lawful Intercept Patent Application and Microsoft's 'Legal Intercept' Patent Application."

Chang added:

Federal law enforcement agencies have expressed frustration in trying to track and record criminal and terrorist internet conversations. Our Lawful Intercept technology would allow government agencies to 'silently record' VOIP communications. CALEA (Communications Assistance for Law Enforcement Act) requires telecommunications carriers and makers of communications equipment to enable their equipment so it can be used for surveillance purposes by federal law enforcement agencies.

If it makes Microsoft feel any better, Apple co-founder Steve Wozniak said Microsoft may have become more innovative than Apple. At TEDx Brussels, Woz said:

I've seen more of the type of innovation (from Microsoft) where you see something: 'Whoa - they really changed things drastically. Whoa - they aren't even going the same direction as everyone else' - meaning the iPhone and Android operating systems.

And a couple days ago I read an article where Microsoft has a machine -- you'll speak into it in English and it'll come out in Mandarin. If they're making strides in this valuable voice recognition area, I fear that Microsoft might've been sitting in their labs trying to innovate. ... They might've been doing that for three years while Apple was just used to cranking out the newest iPhone and falling a little behind, and that worries me greatly.

If some of that Microsoft innovation was the Legal Intercept of VoIP such as Skype, then Voip-Pal may be about to burst that Microsoft bubble.

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