Pitney Bowes Sues E-Stamp

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Pitney Bowes Inc., Stamford, CT, has filed a patent-infringement lawsuit against E-Stamp Corp., San Mateo, CA, alleging that E-Stamp used key Pitney Bowes' concepts to develop its technology for downloading and printing postage using personal computers.

The suit, filed in the U.S. District Court for the District of Delaware on June 10, charges E-Stamp with infringement of Pitney Bowes patents and is seeking unspecified damages.

Both Pitney Bowes and E-Stamp are developing postage systems that can be delivered over the Internet and printed using computer printers as part of the USPS' Information-Based Indicia Program, which may eventually phase out the need for the USPS to use mechanical or electronic meters. All of the PC postage companies in the IBIP have to meet a stringent set of specifications from the USPS for their system to be accepted into the program.

E-Stamp's product, E-Stamp Internet Postage, was the first to win USPS authorization in the Spring of 1998. Pitney Bowes' product, ClickStamp, was introduced in November.

Last year, Pitney Bowes allowed its competitors to license 15 of its 3,000 U.S. patents for personal computer metering technology. Pitney said these patents, some of which date back to the 1980s, cover print postage on a computer printer attached to either a PC or a computer network to produce a digital indicia, and E-Stamp is using these concepts in its product. Pitney Bowes wants E-Stamp to stop using the patents, but said it is open to licensing its technology to E-Stamp.

"Over the course of the last year, we've been in licensing discussion with E-Stamp and others," said Sheryl Battles, spokeswoman for Pitney Bowes. "We have not come to a successful resolution with E-Stamp, so we have fiduciary responsibility to our shareholders to protect our investment in research and development and our intellectual property."

Battles said that even though "we have filed this suit, we are very willing to work with E-Stamp to find common ground. We have a history of licensing our technology, and our metering technology is currently licensing [its patents] to all of our traditional competitors."

Battles also said Pitney has had discussions with the USPS -- both formal and informal -- about its intellectual property holdings from the beginning of the IBIP.

E-Stamp denies it is infringing on the Pitney patents and said it intends to fight the suit.

"We have had discussions with Pitney Bowes, and we do not believe we are infringing on any patents," said E-Stamp spokeswoman Leslie Thomas. "We have 20 plus patents of our own and feel like we are in a good position; and they by no means own this category."

E-Stamp's product is expected to be on the market by summer, after it completes the final IBIP phase. No date has been set for Pitney's ClickStamp product. Neither company has set prices for its software.

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