Jingle to Assert Patent Against Competitors

USAToday writes about a recently awarded patent (No. 7,212,615) obtained by Jingle Networks, which operates the 1-800-Free411 ad-supported directory assistance service. After conducting several searches at the USPTO and elsewhere I was unable to find a copy of the patent itself. However, according to the article:

Jingle's patent, which it bought from inventor Scott Wolmuth, is for a system that plays an ad related to the listing a caller requests on a free 411 service. So, according to [Jingle CTO Scott] Kliger, a rival service that examines a caller's request for, say, Domino's Pizza in Atlanta, identifies the category (pizza) and then plays an ad for Pizza Hut likely would infringe on the Jingle patent.

Taking this on its face, it would implicate any of the competing services that feature contextually relevant advertising -- for example AT&T's not yet full rolled out 1-800-YellowPages. But it would not currently affect Goog411 or Microsoft's Tellme, which (as of today) run no such ads.

Competitor 1-800-411-Save, in the article, cites earlier patents that may conflict with or limit the scope of what Jingle can assert. Indeed, a quick search on Google Patents on the phrases "directory assistance" or that query combined with "advertising" reveals scores of patents. It's unclear how many of these might be relevant to this discussion -- without undertaking the tedious process of examining them -- but it illustrates that there's something of a potential IP mine field out there in the directory assistance segment.

But what about this "local search" patent, which also has mobile implications? Perhaps it s broad enough to require anyone offering location-based services in a mobile context to pay fees. But then there are also many patents tied to mobile location-based services. All of these issues will ultimately have to be negotiated in a game of "my patent's broader than yours" or litigated to the appellate court level.

Here's where one inserts the 2000 word essay on what a mess the whole arena of "business method" patents is.

The "cynical" view of the USAToday piece is that Jingle might be publicizing this patent as a way to interest, for example, an AT&T in acquisition talks. Jingle has raised more than $60 million from investors and while it's the market leader the company is not yet profitable. It says it has perfected the formula to keep costs at $.15 per call, however it needs more ad coverage to monetize the increasing number of calls it handles monthly.

It will take a fairly massive "liquidity event" for Jingle investors to get their money out of the company: either an IPO, which has been discussed, or a big acquisition by a big competitor such as an AT&T or Verizon.

In a consumer market survey conducted last year for Jingle, comScore found a strong preference for free directory assistance over current carrier models where consumers pay. A full 74 percent of respondents said that would "probably" or "definitely" opt for ad-supported directory assistance over traditional directory assistance. Eighty eight percent said they would also likely use these free services more frequently.

Opus Research has forecast that ad-supported mobile directory assistance services will overtake traditional carrier mobile directory assistance in the next three years in terms of consumer call volume and could generate up to $3 billion in ad revenue in the U.S. within the next four years. Accordingly there's a good deal at stake in the category.

As I've tried to argue in the past, voice-initiated mobile search (whether through a phone number or embedded in the handset) is an immediately accessible mass-market approach to local mobile search because it draws on an existing, installed base of mobile directory assistance users and doesn't require any real learning or consumer behavior change.