Just a few months after meeting to discuss a possible cooperation, two of Israel's hottest Internet companies are now disputing the intellectual property rights used in their dictionary search products.
Jerusalem-based Answers Corporation, which runs Internet content site www.answers.com, is suing Babylon Ltd. for patent infringement, claiming NIS 1 million compensation from Babylon.
"We met with Answers a few months ago and spoke about a possible cooperation with them," said Dovik Peer, acting chief executive officer of Babylon. "We always enjoyed a friendly competition with them, so our first reaction to the suit was one of surprise and that it was not a serious claim."
Peer said Babylon had its own patents from 2001, and would be looking into the claim before issuing a response. Answers said the patent in question, entitled "computerized dictionary and thesaurus applications," was first filed in 1997 and was granted in 2004.
The patent in question covers a computerized search process which, when targeting the meaning of a word, provides at least one synonymous word on screen, in order to eliminate ambiguity in the meaning of the target word.
Answers insisted the suit was strictly a technology issue and has no bearing on any business relationship between the two companies.
"We have a patented technology that they are infringing on and left us with no choice but to go ahead with this action," said Steven Steinberg, chief financial officer of Answers. "This lawsuit has no relevance to the meeting we had with Babylon. We did not have a relationship before this, and it is simply our attempt to guard our intellectual property rights."
While the two companies focus on different markets, there have been overlap areas in their activities in the past.
Through its Web site, Jerusalem-based Answers draws authoritative content from partner companies to provide information to its users. The company was founded in 1999 as Gurunet and changed its name to Answers Corporation after listing on the Nasdaq in August last year. Shares in Answers Corp. dropped 3.1% to $9.99 in Thursday morning trade in New York.
Meanwhile, Peer confirmed reports that it had been approached by a number of overseas institutions interested in underwriting a possible financing round for Babylon, but said the company had no plans to go public yet.
Babylon supplies software giving one-click translation and information solutions to individuals and corporations.