Message to Swiss: Cease and Desist

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Message to Swiss: Cease and Desist
Zafar Khan

An L.A. company sees Switzerland as anything but neutral as it continues a battle over intellectual property with the Alpine country’s postal service.

RPost Inc., which provides business e-mail services, sued Swiss Post for patent infringement last year. The government-owned company settled, but RPost recently sued it again, alleging that Swiss Post hasn’t respected the terms of the settlement and continues to use the company’s patented technology.

The case began when RPost Chief Executive Zafar Khan discovered that Swiss Post was offering a service similar to RPost’s registered e-mail product, which tracks when and where an e-mail was sent.

“We’re a bit shocked that this agency of the Swiss government would not respect the fact that we made heavy investments in intellectual property to innovate in this space,” he said. “We cannot see how they could believe that their current system is not infringing.”

Terms of the settlement are confidential, Khan said.

RPost claims Swiss Post has not held up its end of the settlement bargain, and the company is suing the government agency again.

Swiss Post did not respond to a request for comment.

Karl Manheim, a professor at L.A.’s Loyola Law School who teaches international patent law, said he hasn’t heard of many companies suing a foreign government over patent infringement.

“I don’t think it happens often, but there’s nothing in the patent to preclude that,” Manheim said.

Kahn said he couldn’t find examples of a comparable battle.

“When we filed against the Swiss postal service, it was unique,” he said. “It’s very rare that a foreign government gets sued, furthermore for something like patent infringement.”

It’s not a clear case, however.

Richi Jennings, an independent technology analyst and consultant, said he questions the validity of RPost’s patents.

“I have never been convinced that its technology is truly novel and nonobvious, the two key tests of a valid patent,” he said.

RPost has partnerships with postal services in Iceland, Colombia and Bermuda, and Khan said he had hoped the company could form a similar partnership with Swiss Post.

“We offered to work out a partnership with them for Europe,” he said. “But not only did the partnership agreement discussions fall apart, they ignored key provisions of their settlement.”

RPost, which is headquartered near Los Angeles International airport and has 35 employees in the United States, offers registered e-mail, encrypted e-mail and e-mail signatures. Its registered e-mail keeps a record of where e-mails are sent and ensures the authenticity of messages for use in legal proceedings.

RPost customers, which include government offices, law firms and investment banks, pay between 39 cents and 79 cents per e-mail depending on the service.

RPost holds eight patents in the United States and two in Switzerland; in total, the company has 31 patents around the world.

The company has recently filed lawsuits in both California and Zurich asking for a preliminary injunction against Swiss Post. The postal service has until the end of March to respond in California and 30 days from the time of filing to respond in Zurich; RPost filed in Zurich on Feb. 15.

Henry Ben-Zvi, the founder of Santa Monica law firm Ben-Zvi & Associates who represents RPost in its California suit, said he’ll treat the lawsuit against Swiss Post the same as if RPost was suing another company.

“There are technical hoops you have to jump through, but the basic issues are the same,” Ben-Zvi said.

RPost has sued a number of its competitors alleging patent infringement, including Mountain View-based Goodmail in 2009 – the case was quickly settled – and Dallas-based Zix Corp. in January.

Demand for registered e-mail and other secure e-mail services has increased during the last few years, as more people send important documents via e-mail instead of through regular mail.

Khan said demand for RPost’s technology is likely fueling imitators.

“As the market appetite for what we do heats up, we’ve found that some companies are trying to enter the market with new products that mimic what our technology does,” he said. “Fortunately for us, we did invest in the intellectual property early on.”

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