More patent absurdity threatens net commerce

More patent absurdity threatens net commerce

Summary: I remember when eBay was first accused by MercExchange founder Tom Woolsten of patent infringement because of eBay's "Buy it Now" feature.  I completely forgot about it.

TOPICS: Patents

I remember when eBay was first accused by MercExchange founder Tom Woolsten of patent infringement because of eBay's "Buy it Now" feature.  I completely forgot about it.  Probably because I thought the case disappeared due to the absurdity of the claim.  However, a report surfaced this week that makes it clear that the case is not only still haunting eBay, but all of Internet commerce. 

My characterization of the claim as being absurd is not meant to be a knock on Tom Woolsten.  Mr. Woolsten: more power to you.  If our system allows us to patent such dumb things as swinging sideways and make millions off it, then so be it. Given the multitude of ways that we get ripped off by people making millions outside of the law, in some ways, we should probably be thankful that Woolsten, like many others, is doing his best to work within it.  Of course, the way our patent system is structured today, it's more like the Federal Bureau of Licenses to Steal and Woolsten just so happened to get one such license on a method for using a credit card to lock in an offer when purchasing items online.  Can things get any more absurd?

The open source-opens standards world (two worlds which are currently colliding) makes for a good case study on why this patent makes no sense whatsoever.  Many people confuse the copyright that goes with source code with the patent rights that go with an invention.   The confusion comes from the idea phrase "patents on software."  It's a loaded phrase that can mean a lot of different things.  For example, protocols for interoperation such as TCP/IP and HTTP fall within the realm of software and such protocols could be patented (this becoming a patent on software).  But more often than not, software is an implementation of a business process and it's actually that process that's patented.  The patent holder may have written some software that's an implementation of the patent and this often leads people to think the software is therefore patented.  It's not.  The source code is a copyrighted implementation of the patent. 

Unless a license like an open source license expressly permits me to copy that source code and do as I please, it's not the patent that keeps me from using a copy of the source code, it's the copyright.   That said, the patent could also prevent me from using the source code too.  If for example, the patent holder doesn't want me to have an implementation of his or her patent, then it doesn't matter how I've implemented the patent.  I could have done it with the aforementioned source code.  Or I could have done it by connecting an eggplant to a zucchini.  Either way, if the implementation infringes on patent, then I can't use or sell that implementation without the patent holders permission.  In fact, part of the risk that many say is attached to open source code is that even though the copyright permits copying of the code (and other things such as derivative development), it doesn't matter a hill o' beans if the authors and licensors of that code infringed on someone else's patent with that implementation.  Legally, you're not entitled to use it (nor are the developers).

So, why the quickie oversimplified discussion of copyrights and patents?  When I see the phrase "a method for using a credit card to lock in an offer when purchasing items online"  I start to wonder whether "a method for using a credit card to lock in an offer" isn't really the process and the context of doing it online is simply an implementation of that process.  For example, today, I can call up my mortgage broker and lock-in the interest rate she's offering to me with my credit card.   Or, I can walk into a car dealership and do the same thing with that "offer" that supposedly will never be available to me again.  So, my expectation is that if I can do this on the phone, or in person (the original implementation of lock-in), then why shouldn't I be able to do it online (the eggplant-connected-to-zucchini implementation)?

In case you missed it, it's cases like this one that motivated me to engage in a bit of satire over the entire patent fiasco.  The point of it is that if we keep heading down this rathole, sooner or later, inventors won't be able to invent anything without infringing on a patent.  All the patents will have been taken up.  There will be nothing less to patent.  And with all those patent holders putting the squeeze on everyone else like Woolsten is,  the world will be a far less interesting, colorful, and lively place than it has the potential to be if innovation can truly flourish. 

Topic: Patents

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  • Enough Dan, we all know there are problems in the patent system..

    You know, the easy thing to do is knock something. The much tougher thing to do is find workable solutions. How about you start thinking about "how do we fix it and make it fair for both sides".
    • Ooops, I meant David...

      my bad
    • Re: Enough Dan, we all know there are problems in the patent system..

      [i]How about you start thinking about "how do we fix it and make it fair for both sides".[/i]

      I don't understand this "fairness" thing. It's not fair to the public that Woolsten was issued these patents. Restoring fairness means he's gonna get hurt. That's the way it is.

      We have a Supreme court that says your county can take your field and give it to me. If that were to happen you would not think that was fair. If you somehow could restore fairness, I'd be out a field, wouldn't I? But why should fairness to me factor into it?

      Why are we worried about fairness to Wolsten? He didn't come up with anything that benefits the public. He gamed the patent system, and that's all he did.

      He's shaking down people who sell stuff. Did he invent selling stuff? Did he invent the credit card? Did he invent credit card payment transactions? What exactly did he invent that's novel and not obvious and deserving of a patent?

      My rule of thumb is, when a patent owner goes out and sees litigation targets everywhere he looks - not because they "stole" his idea, but because the process is so obvious (using a credit card to transact a payment) that everyone is doing it - then that's a patent that shouldn't ave been issued.

      I'm more worried about being fair to Wolsten's victims than I am about being fair to him.

      none none
    • How about

      No patents on things that don't affect the physical world? If you create a device that contains software that actually does somthing physical, it's patentable, but pure software (or business practices) aren't.
  • Odd idea.

    That innovation will cease because the inventor believes the legal system protects his right to be paid for his invention.

    I can hear inventors now: "If a way exists to assure that I'm going to make money on this, I'm putting down my tools and stopping work right now! If people can't take my invention and make a fortune on it without giving me a dime, I'm through working."

    From the article:
    And with all those patent holders putting the squeeze on everyone else like Woolsten is, the world will be a far less interesting, colorful, and lively place than it has the potential to be if innovation can truly flourish.

    Inventors who want to be paid for their inventions are "putting the squeeze on everyone else."

    Seeing that the payments are required, the inventor stops work.


    Future invention stops because past inventions earn money.

    The person working on an invention is offended or frightened off because he sees that people in the past have done what he wants to do.

    What he probably wants to do is make money on his invention.

    Seems odd to have to explain this.

    Of course the patent system has to be fixed to assure that frivolous patents, rigorously defined, are not allowed.
    But that is fixing the system, not abolishing it.
    Anton Philidor
    • you miss the point

      The problem is not inventors getting compensated for their invention. The problem is when all the inventors start stepping on each others toes because some rudimentary and obvious process has been patented, Like swinging sideways. Any crane that swings its arms sideways would be infringing.
      Were is the incentive to create when anything you do may step on someone elses patent/idea? Looks like it would keep the home inventor out and lock everything up in big business that can afford to litigate and cross license.
      • Accurate points overstated.

        If I develop an idea that produces a great deal of money for me, then the fact that I'm going to have to share some of my profits with prior inventors is not going to stop me.
        That's the part that you're missing.

        But you do have a couple of good points.

        First, seems like it's possible to patent very obvious ideas. I think the solution may be for the patent office to have the resources to check applications more thoroughly.
        In fact, though I have no evidence whatever to support my thought, I suspect the patent office is issuing what it knows to be stupid patents to dramatize the need for greater resources. If I'm wrong I'll apologize, but I can't even hypothesize another good reason for such dumb patents being issued.

        Second, yes, patents are part of the armory of large corporations in preventing disruptions to their market plans.
        So is the ability of a large corporation to buy a smaller corporation and control implementation of the idea.
        IT is in the mega corporation stage of its evolution. This is the sort of thing large corporations do.
        You'd have to be a luddite in the original sense to believe that the events of the last decade, say, should simply be overthrown and destroyed. Time passes.
        Anton Philidor
        • Post started with a mighty big word

          >>If I develop an idea that produces a great deal of money for me, then the fact that I'm going to have to share some of my profits with prior inventors is not going to stop me.<<

          That part about producing a great deal of money for you. If you can't reasonably predict how many of these prior inventors there are, when they might suddenly appear, how do you factor their royalties into your price? Maybe you don't have enough retained earnings to meet the prior damages claimed.

          What if one of them isn't interested in royalties but is rolling out a competitive product and has calculated that the return would be greater by controlling the market than sharing it (remember, businesses are notorious about that "profit" thing)? A patent permits the holder to prevent anyone from making or selling the invention - there is no legal requirement to license a patent. You could be in a position of having the doors shut without recouping expenses.

          This "patent thicket" goes to the heart of the FTC's concerns about competitiveness. The concern is that, if our patent system imposes unacceptable uncertainties on developers, they might choose not to develop in the U.S.

          No, although it's an interesting observation, the PTO doesn't deliberately grant worthless patents. B.S. (before software), the system was somewhat self-policing. The Office wants a high success rate (the motto was "We help our customers get patents," but I don't know if that's current) and historically has worked very actively with applicants to re-word or divide claims as necessary to get to award. Applicants and their attorneys usually do due diligence in their prior art search, and both they and the examiner (who sticks with a field of art for a long time) generally can recognize original, non-obvious invention and can negotiate to a satisfactory conclusion.

          With software, it's awfully hard, sometimes nigh unto impossible to understand what it is the claimed invention does. See Fred Brook's "The Mythical Man Year" for more on the subject - software is non-visual and non-visualizable, and as you can see by examining virtually any software patent, the drawings are anything but enlightening. You can't apply automation to search prior art as in electrical or biotechnical, the standards just aren't there. There is no basis for that clean dialog. And it isn't just a matter of the trivial, even a fairly major claim forward might already be in publication somewhere, but how to find it? There is no way to tell. The Office, supervisors, the entire chain is predisposed toward the applicant, not treating them like some miscreant that is trying to dupe the system. An examiner needs positive reason to reject an application (and remember the quota system, it takes more time to reject than grant - it also deprives the Office of the Award fee). Odds are, if you submit a software patent application, even for something you learned decades ago in some CS class, you will get a patent.
  • blinding simplicity

    is unfortunately the goal of real invention. It is better to err on the side of the "inventor" until arguments can be heard for prior use or work.
    this one does seem pretty silly, but I am sure that there are many people protected by the same rights that have come up with things not so seemingly obvious. Really it would seem the patent on the credit card would trump the patent on it's use, since you can't have one without the other.
  • Why isn't there a patent blog coming from the patent office?

    What I am trying to say is that there is no way that there will ever be as much time budget or expertise at the patent office to challenge/research prior art than what is available for free on some of the current technical blogs.

    What if the patent office were to run a blog to discuss the current patents. They would put a link to the patent and a bloglike their-best-guess description for the common reader. Anyone on their syndication list would see these come by and immediately key in on the ones important to their livelyhood or expertise.

    The patent office gets the benefit of hundreds of years of expertise in a roundhouse discussion as to the merits and outcomes and to whether there could be something of prior art. The patent office would still be the authority but would receive a helping hand on patents that were important to the community. I just don't know how you would keep it from being a free-for-all when a bunch of companys get involved on a paticularly hot one (my experience from being on some standards committees).

    Maybe this is a silly idea. However, I read a lot of articles for my job and it wasn't until blogs (really the ability to leave comments) that I truly had help in distinguishing the right from not so right (I could guess the flat out wrong for myself).

    John Prichard
    • That's in the works

      I don't recall whether the regulation has been adopted or if it is still being worked. It's not a blog, but I think it meets with your suggestion.

      As a final pre-award step, the PTO would publish an "intent to award," together with full text and drawings of the application, both in the Journal and on the web site. If reasonable priority challenges were raised, the Office would re-examine in light of the new eveidence.

      Close enough?
  • My Right To Use Microsoft Softwear

    Along with a group of capital investment companies, we have decided to copy Microsoft's Windows software browser and change the code slightly improving it.

    Since the Supreme Court has now decided to hear eBay's challenge to avoid infringing on MercExchange's patent, we feel that we will be able to do the same with Bill Gates programs and change the name to Windough XT Pro.

    We will be happy to pay Microsoft a royality as the Supreme Court could prohibit the use of Federal judges injunction to cease and desist from infringing on another similar patent and intellectual property.

    What is the use to obtain a patent, when the process or design is available on line for all to see and copy.