Patent infringement is a term that almost all companies – be it big or small – loathe to hear. Why? Because it either means two things, litigation or a pay out – and frankly, both ultimately mean spending a lot of money. I remember the patent infringement suit that a company called Immersion Corporation filed against Sony. The subject of the infringement is the rumble technology that is used on its Sony Playstation controllers. The courts eventually decided in favor of Immersion Corp. and has received a massive pay out from these companies not including paying regular royalties.

The world of VoIP is also about to be shaken by a similar situation as Rates Technology, Inc. – a company that has a patent portfolio currently being used to compel VoIP equipment and service vendors to pay a certain amount in exchange from protection from being named in a patent infringement lawsuit, is filing a patent infringement suit against Google.com. It is interesting to note that Rates Technology has claimed that they already have agreements in place with almost 800 companies and have litigated about 25 times in 15 years.

RTI basically holds the patent to least cost routing, a technology that applies most to VoIP technology. Interestingly enough RTI does not produce any products that support the technology and mainly exist just to collect revenues from other companies.

It will be quite interested how this case will develop as we are talking about the biggest internet-based company in the world amidst a suit that comes from a company that most VoIP pundits say have an unpalatable reputation in the industry.