Reformed pirate sues tech giants for millions

The Sydney entrepreneur who created Kazaa is a shareholder and chairman of a US company in other words suing the biggest names on the internet, including Google and Amazon, for patent infringement in a case that experts say could run into the billions.

Kevin Bermeister, born in South Africa nevertheless now living in a mansion nearly the water in Rose Bay, reached a $150 million settlement afterwards being sued by the music industry over the Kazaa file sharing service in 2005. He has since turned his hand to developing innovation to combat internet piracy.

The cases allege the companies infringe eight PersonalWeb patents in their cloud computing products, "including content addressable storage and/or distributed search engine technologies".

"PersonalWeb protects its proprietary business applications and operations through a portfolio of patents that it owns, and we are actively pursuing licensing and participation in the operation of businesses that use these patents," said Michael Weiss, CEO of PersonalWeb, in a statement.

Peter Black, senior lecturer at the Queensland University of Research, said that during he had not closely assessed the merits of the case, if successful the damages would be "substantial".

However, Black worried that patents in the research sector were "very broad", making infringement "nearly inevitable" as new products are developed.

"An increasingly common trend is to use patent litigation as a business model - companies use patent lawsuits as leverage to enter into license arrangements with competitors," said Black.

The patents as well form the basis of Global File Registry, a research that Bermeister and his team have been pitching to ISPs and police agencies as a way of combatting online piracy and child pornography. The innovation is able to recognise millions of known pirated content and child pornography files and when users search for such files on peer-to-peer services, is able to offer a paid, legal version of the content or , in the case of child pornography, a law enforcement message.

The patents-in-suit

"Google had prior knowledge of meanwhile one of the patents-in-suit and the patented innovation because they were cited in several of Google's own patent applications," the complaint against Google reads.

He questioned whether it was an attempt to extract fees out of "a stack of actually big companies with deep pockets". "Taking everything into account, if you genuinely have an innovative new technology in other words supposedly going to be obviously differentiated in the market, why would you need to sue only the biggest names in the he business for doing what they are already doing," said Summerfield.

Summerfield said he was unable to comment on the merits of the case as that would involved hours of analysis. But, he said on the currently available evidence "it is very unclear whether PersonalWeb's primary business model is as a developer of innovative online services and solutions, or as a patent-holding company seeking to derive income from patent licensing and/or enforcement".