Jerry Weinberger was in the patent licensing business before it was cool—in fact, before patent lawsuits were commonplace.

Weinberger and his company, Rates Technology Inc., (RTI) began suing over a small batch of patents in the mid-90s. Ultimately, they filed 89 suits before the year 2000 (only Jerome Lemelson was a heavier patent litigant at that time). Using a small batch of patents, Rates Technology stayed on the top ten list of "non-practicing entities" through 2010, according to statistics [PDF] compiled by PatentFreedom. According to other PatentFreedom data reported by Bloomberg BusinessWeek, Rates Technology ranks 17th among entities in terms of number of defendants sued, and No. 10 when ranked in terms of litigation since 2004.

This week, Weinberger and his lawyer took an unusual step: asking for a hearing at the Supreme Court. In recent years the court hasn't been very friendly to patent owners in general—and it certainly hasn't been sympathetic to the non-practicing companies that get called patent trolls. (In the few interviews he's given, Weinberger vociferously disputes the idea that he's any kind of patent troll; a call and e-mail to his lawyer today were not returned.)

The reason, according to Rates Technology, is that one of the company's many licensees—Best Buy, which was briefly in the VoIP business when it bought Speakeasy broadband back in 2007—broke a promise it made to never challenge RTI's patents. So far, the courts have sided with Best Buy, saying that contract isn't enforceable and Best Buy/Speakeasy has a right to challenge the patents regardless. RTI's petition to the Supreme Court has to be seen as a longshot; about 1 percent of those asking for a hearing at the high court are ultimately heard.

Documents from the case reveal what kind of deals get struck by one of history's most successful patent-licensing operations of all time. And this also has implications for how Rates Technology's fellow patent-holding companies will behave in the future.

The RTI deal: $475k to go away; $12 million if you fight

Rates Technology has sued more than 100 companies, and the company has succeeded in settling most of them without going to trial. RTI even convinced Google, a company that often takes the expensive step of standing up to patent holders, to settle a lawsuit in 2006. It's a remarkable tally for a company that keeps wielding the same two patents. Most patent-licensing companies of that size, like Acacia Research, have a giant stable of patents to fuel their litigation.

Weinberger calls the suits justified because he invented "least cost routing," a technology used in most VoIP services, back in the 1970s.

In 2007, Weinberger and his lawyer got Best Buy to take a license for its newly purchased telecom company without even filing suit; the payment was revealed in later court documents to be $475,000. This agreement wasn't exactly a settlement, because technically, there hadn't been a lawsuit. It was just a "covenant not to sue." Best Buy and Speakeasy agreed to cut the $475,000 check, and not ever challenge the validity of the patents, or to assist others in challenging them. If the contract was broken, they'd have to pay $12 million.

Like Best Buy, many companies seemed to have paid RTI's tax without fighting in court; in a 2005 interview, Weinberger claimed to have licensed "800 to 900 companies," far more than he has sued.

In 2010, SpeakEasy merged with two other companies: Covad Communications and MegaPath. That woke up Rates Technology to Covad; the company quickly decided Covad was infringing its patents, too, and came knocking asking for its usual payment. RTI uses a tiered system based on a company's worldwide sales to determine payment. But Covad didn't roll over, instead the company filed its own lawsuit to invalidate the Rates Tech patents.

That challenge violated the contract with Best Buy, in the view of Rates Tech. Sure, the company wanted to treat Covad as a different entity when it came time to collect its check. But after Covad fought back, it wanted Covad to be bound by the old agreement, and forced to pay the $12 million penalty.

A federal judge disagreed with Rates Tech, though, and that decision was upheld on appeal. The appeals court found the "covenant not to sue" was similar enough to a license, and noted the public had an interest in allowing patents to be challenged in court.

Sue First, Ask Questions Later

Many patent-licensing companies have already embraced the idea of simply filing an infringement lawsuit with no warning, in the wake of the Supreme Court's MedImmune v. Genentech decision. That case made it much easier for defendants facing threats to file their own preemptive lawsuit, and take away the patent-holders' choice of venue. Rates Technology says its situation is different from the MedImmune case, because its settlements are "lump sum" payments and not ongoing royalties. If it stands, and it is likely to do so, the Rates Tech case will increase that pressure.

[Note: this story has been updated.]