AOL Sues Tribal Voice Trademark Case Underscores Importance Of Instant Messaging
Jun. 01, 1999 (ISP BUSINESS NEWS, Vol. 5, No. 22 via COMTEX) -- Instant messaging appears to be more important to America Online [AOL] than the company
would like the general public to think.
Last week, the Dulles, Va.-based online service filed a lawsuit in U.S. District Court for the northern district of California against Scotts Valley, Calif.-based startup
Tribal Voice. The charge - trademark infringement over the term "buddy list." This latest action by AOL follows the December lawsuit it filed in a Virginia federal
district court against AT&T [T], which licenses Tribal Voice's Pow Wow instant messaging server. A trial date is set for June 28.
AOL is waving its legal baton in an attempt to avert the latest threat to the online service's empire - a competitive instant messaging offering. It seems improbable that
AOL actually would try to challenge the use of terms "instant messaging," "buddy list" and "you have mail" as AOL's trademarks.
"It appears that they are suing us because they think they can break us down," says Joseph Esposito, Tribal Voice president and CEO. "What this lawsuit will illustrate is
that instant messaging is AOL's neutron bomb - their clever little way of tying up all users of the Internet in one community."
"Buddy list is a federally registered trademark that we have rights to under the trademark law - and so we are doing just that," counters Jim Whitney, AOL spokesman.
Espositio argues that Tribal Voice was using the trademark before AOL registered it, which - if proven in court - would make AOL's case shaky.
Should AOL win this fight, instant messaging as a technology would be dominated by AOL and most other ISPs would be unable to compete on this new
communications front.
Tribal Voice estimates more than 30 percent of connect-time to AOL is spent in chat rooms. While AOL is not likely to fight other ISPs for the right to provide access,
Internet communicatios technology it owns and advances provides captive Internet eyeballs - and with that comes a dominant position in the e-commerce and advertising
space.
On top of AOL's 17 million subscribers, the online service owns the eyeballs of 20 million ICQ users - an instant messaging company AOL bought last year.
Federated Tribes
The conflict California and Virginia judges must weigh is highly tribal. Tribal Voice execs want the company to become a significant player in the instant messaging
space. The strategy Tribal Voice officials are pursuing involves offering ISPs instant messaging as a tool to unite in communities - or tribes, as Esposito calls them.
Tribal Voice herein would become the ultimate power linking these tribes into a federation (again Esposito's term) - since customers of all these new communities could
communicate through Tribal Voice's instant messaging server called Pow Wow.
While most people view instant messaging more as a toy than a serious business service, Esposito says this technology heralds the future of the Internet - and AOL
unwittingly supports this idea with its lawsuit.
In a Feb. 10 white paper called "The Next War: The Control of Internet Communications," Esposito compares leading Internet companies that invest in Internet content
to the French generals who lost France to Germany's blitzkrieg because they clung to the trench tactics used during World War I, missing the birth of a new medium of
warfare.
"The blitzkrieg of the Internet is already upon us," Esposito wrote. "It is interactive communications, not information or "content," and the leading New Media general is
the brilliant Steve Case, Chief Executive of America Online, the most underestimated executive in the technology industry today."
Underestimated by everybody - including Esposito himself, who didn't expect grand tactical maneuvers between Tribal Voice and AOL would give way to misdemeanor
mugging.
"This is a gratuitous lawsuit, because they are trying to win by muscle," Esposito says. "Such lawsuits can cost hundreds of thousands, if not millions of dollars."
Attorney fees is what Tribal Voice execs fear the most. Even if AOL doesn't win the case, it could easily tie up most of Tribal Voice's resources in a legal battle that
would distract the company from its core business.
"Could this lawsuit be expensive? Absolutely," says Steve Lancellotta, a partner with Rini, Coran & Lancellotta, a Washington- based law firm with a large new media
and Internet practice. "There are very few companies on Earth who can dip into the kind of resources that AOL can use if it has to."
The Battle For Buddies
Thelawsuit already is rattling Tribal Voice's customer base. Tribal Voice's success depends on how many ISPs the Internet software company can convert into users.
"If we are able to forge partnerships, it will change the balance of power in the Internet communications space," Esposito says.
Instant messaging, say Tribal Voice officials, is the key to winning the Internet. From where Esposito sits, the Internet space has eight categories of players: microchip
vendors, PC and other Internet-enabling device manufacturers, operating system software developers, Internet access providers, desktop portals, browser developers,
Web portals and Web destinations.
The trick to surviving and flourishing in the space, Esposito argues, is to build brands in each of these segments and extend control over as many of these markets as
possible.
It's not about the control over the last-mile infrastructure anymore: it's about controlling access to eyeballs.
"I think the most dangerous announcement Microsoft ever made was Intel saying it wanted to develop an operating system," Esposito says.
In this light, AOL's lawsuit against Tribal Voice looks almost anticompetitive. There are only five brands of any significance in the desktop portal space today - ICQ,
AOL, CompuServe, Netscape and Tribal Voice. AOL owns all of them but Tribal Voice.
However, if AOL could discredit Tribal Voice's technology and show partners that using Pow Wow means legal trouble, then many ISPs might think twice before
licensing Pow Wow from Tribal Voice. Thus far, AT&T is the largest Tribal Voice ISP customer.
"The timing of their lawsuit was peculiar," Esposito says. "They sued us on Tuesday or Wednesday, right before there was a hearing on the AT&T case on Friday." |
