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CHICAGO (Reuters) - Major League Baseball has won a patent for technology that blocked certain fans from viewing local games online, and it may open the door for the U.S. sports league to profit by licensing it to media companies.
Baseball's advanced media business was awarded a U.S. patent last month for online geolocation technology, a system that uses two or more electronic methods (such as wireless and satellite) to pinpoint the geographic location of a subscriber, the sports league said in a statement late Thursday.
The sports league filed for the patent, its first, in 2004 as a way of excluding certain fans from watching its games streamed live online.
MLB wanted to block reception of games in a subscriber's local market as a way of protecting the hundreds of millions of dollars its 30 clubs receive in rights fees from such regional sports networks as the New York Yankees' YES or Boston Red Sox's NESN.
"This was a clear example where necessity really was the mother of invention," Bob Bowman, chief executive of baseball's advanced media arm, said Friday in a telephone interview.
Baseball now could approach any company using multiple geolocation technologies to determine a subscriber's location and ask for a licensing fee, analysts said. The other options would be for those companies to try to work around baseball's patent or challenge it in court.
However, the narrow scope of MLB's patent (it must be at least two geolocation technologies used in conjunction with a subscriber model) will likely limit the league's reach, said Ray Valdes, a Gartner analyst specializing in the Internet and Web services.
Also, media companies are not flocking to make money through an online subscription model and the patent will likely have the most impact on the sports world, he said.
"I don't see a big footprint in the mobile industry for this patent," Valdes said. "It might limit options in the future, but right now there's not a lot of that activity going on and frankly I haven't seen the industry heading in the direction.
"Some of this could get played out in the courts," he added. "Sometimes, the true essence of a patent is only determined by litigation."
Bowman said baseball was trying to protect itself after being sued in the past for patent infringement by other companies, but officials would now weigh how to protect the league's intellectual property.
"It's something the management and board should review," he said.
MLB said in the patent application that its technology could apply to promotions, sweepstakes, contests, fantasy games, sale of goods or services, and targeted advertising. However, Valdes said that type of wording was typical as companies seek to broaden the scope of a patent.
Baseball said it has 10 other patents pending with the U.S. Patent and Trademark office, but Bowman declined to say what they cover. Valdes pointed out that more patents building on the first one could strengthen baseball's hand.
Reporting by Ben Klayman