Gogo spends less on legal fees as patent dispute continues

Gogo's 150th 5G network tower in Oregon

Gogo Business Aviation spent less on legal fees last year than expected in its ongoing litigation with connectivity competitor SmartSky.

In a conference call following its fourth quarter (Q4) results for 2022, Gogo’s executive vice president and chief financial officer (CFO) Barry Rowan said operating expenses were 2% lower in Q4 “primarily due to lower legal fees”. The total operating expenses within the quarter were $69.5m.

The dispute between the two companies has been continuing since April 2020. Originally, Gogo submitted a petition to the US Patent Office claiming SmartSky’s patent for its Air-To-Ground (ATG) offering was not valid. Then in September of the same year, SmartSky successfully defended its patent and Gogo did not appeal. Two years on, in February 2022, SmartSky filed a patent infringement lawsuit against Gogo. SmartSky also filed a motion for a preliminary injunction to have the court order Gogo to stop marketing its Gogo 5G services, but in September last year this was denied.

Now there are six patents in dispute, after SmartSky asked the US District Court in Delaware to add two recently-issued patents to the 2022 infringement lawsuit. In the newly amended complaint, SmartSky alleges “Gogo has been illegally selling and offering to sell its 5G ATG internet connectivity product in violation of SmartSky’s patented inventions.”

In the conference call, Oakleigh Thorne, chairman and CEO, Gogo said three of the total six patents expire in August 2025 and the remaining three expire in 2034 and 2035. With the case set for trial in April 2025, a decision on some of the patents that expire in the same year may have limited effect on either company.

Thorne, while stressing he does not believe that Gogo has infringed on any patents, said that if the judge found in favour of SmartSky, the “overwhelming remedy is that there would be some sort of licensing agreement”. He added: “With the patents expiring, any decision by the court would be fairly limited in terms of what the fees might be, because those patents will not be around very long after the case.”

In a statement to Corporate Jet Investor, Dave Helfgott, CEO, SmartSky responded: “Gogo’s comments in its recent earnings call reveal that the company recognises the serious risks it faces as a result of its infringement on SmartSky’s patents. Their chairman and CEO Oakleigh Thorne suggested a back-door licensing agreement might be a way out of a patent mess of their own making.”

Helfgott added: “SmartSky has never offered to license its technology to anyone, much less our sole ATG competitor. Gogo’s wish for licensing would be akin to Motorola launching a new phone using Apple’s patented technology and then counting on licensing it once they lose the inevitable infringement lawsuit.”

SmartSky states it is “confident Gogo infringes each of the six patents”, while Gogo states it “is not infringing any valid SmartSky patent”.