Do not attempt to write up a piece of journalism about Amazon.com while consuming a cinnamon-raisin bagel from Goldstein‘s Bagels and listening to a CD of early ’80s Eddie Palmieri. This, you see, is my ”business method,“ and I have a patent on it.
Well, not really, but I probably could.
The U.S. Patent Office is showing itself ever more willing to issue patents not just for inventions as they are conventionally understood, but for the mathematical formulas that make up software code, and even for broad ideas about how to conduct Internet business. This marks a major change from the way patents had previously been issued, experts say. And with all the innovation going on in e-commerce, there‘s been a race to the Patent and Trademark Office among high-tech firms — followed, inevitably, by some experimental attempts to enforce these new kinds of patents.
In the past few weeks, Priceline.com has sued Microsoft, while Amazon has sued Barnes & Noble. Priceline, the famed ”reverse auction“ site, contends that the Hotel Price Matcher, a recently introduced service on Microsoft’s Expedia travel site, infringes on Priceline‘s patent for a ”demand collection system“ whereby travelers name what they’re willing to pay for airfare, hotel, etc., and Priceline seeks out a firm to meet that price. Amazon asserts that the ”Express Lane“ ordering system used on barnesandnoble.com, in which the company stores customer credit-card information so that repeat customers can buy books with a single click, infringes on Amazon‘s ”1-Click®“ method, for which the company received a patent a month ago.
In both cases, the defendants are not accused of lifting actual lines of code but of employing the same ”methods and systems.“ This reflects a remarkable new openness on the part of the feds to patenting business ideas. That can be either worrying or reassuring, depending on your point of view. Jordan Breslow, an expert in intellectual-property law at Foster Pepper & Shefelman in Seattle, notes that filing for a patent is a ”private dialogue“ between you and the Patent Office, ”not a public inquiry.“ The Patent Office is supposed to determine whether the idea is really new or if it existed in what’s called ”prior art.“ Not being sufficiently aware of ”prior art“ is where patent officials have typically fallen down on the job, Breslow says.
Among the eyebrow-raising patents recently issued by federal officials is one to CyberGold of Berkeley, which received protection for its ”Attention Brokerage and Orthogonal Sponsorship“ system. Essentially, the company pays online consumers for their willingness to view advertisements, gives them cash points for making purchases, etc. (Perhaps you‘ve seen their extremely tasteful bus ads: leering blond woman saying, ”I get paid for doing it.“) No doubt CyberGold is hoping that 90-year-old attorneys from S&H Green Stamps don’t get wind of this.
The Internet advertising company DoubleClick, in New York, got a patent that covers the ”dynamic delivery of Internet advertising by a third-party ad server to a network of Web sites or an individual site.“ At last count, roughly 10,000 companies were doing the same thing.
Breslow points out that just because a company receives a patent does not necessarily mean it can or will be enforced. Patents are an asset that can boost the value of a company, he notes. They can also be used, he says, as ”a defensive measure. If someone sues you, it gives you something to trade.“
Patents can also be a good marketing tool. Amazon‘s lawsuit, for example, which was filed October 21 and announced with a press release, is rather light on legal argument and heavy on such claims as ”The 1-Click® method has been an enormous success with Amazon.com customers“ and ”Amazon.com’s goal is to be the Earth‘s most customer-centric company.“ Yet while everyone in the cyber-community is always ready to get up in arms about the possibility of taxation ”stifling the growth of the Internet,“ no one — except for those being sued — appears to be standing up to protest the idea of having to pay royalties for a widely used business method such as ”1-Click®.“ They’re all too busy running to the Patent Office to get their own piece of the action.