Divine patent--a shopping cart loaded with cash?

Divine patent--a shopping cart loaded with cash?

Summary: It'll be bad news with bells for the e-commerce world if Divine is able to cash in on an old shopping cart patent and demand payments for its use.

SHARE:
0
COMMENTARY--If the stars line up the right way, Divine is going to wind up one very lucky company.

How big? Think "cashectomy."

Because of a little-known but far-reaching patent for conducting electronic commerce, the Chicago-based enterprise services firm is in a unique position to squeeze lots of companies that have no idea they are violating the claim.

The message is being sent. In the last six months, Divine filed suit to demand back payments from six companies it accuses of infringing its intellectual property. If the courts uphold the claim, Divine's management will have the best racket going since some bright bulb invented Wednesday night bingo way back when.

This particular story begins in 1994. Just as the world was waking up to the notion that this Internet thing might be a pretty big deal after all, Open Market filed a claim with the United States Patent Office for a network-based sales system.

The 20-page filing sketched out in some detail a shopping cart metaphor that subsequently became popular with electronic retailers such as Amazon.com and L.L. Bean. Open Market's patent filing for the network sales system was broad, consisting of a minimum configuration of a buyer computer, a merchant computer and one payment computer. This goes to the heart of the concept of shopping and paying for purchases online.

In other words, it's a good chunk of latter day e-commerce as we know it.

Open Market received government approval for its patent in 1998 but fell upon hard times after the dot-com implosion. The company sold out to Divine last October, which acquired the rights to Open Market's patent portfolio. It did not take long for the brass there to realize that it also had taken possession of a potential goldmine.

"It's always been our goal to maximize the return to shareholders and maximize our assets," Rich Nawracaj, the assistant general counsel for Divine, told me. "And one of these assets is this portfolio of patents."

Nawracaj refused to get into specifics, but he knows what's at stake.

"When you look at title that's given to the shopping cart patent," he said, "obviously, the realm of potential infringers is large."

That one qualifies for understatement of the year.

I suppose Divine shareholders can be excused for rooting for their team to take it into the goal line. After all, this would be a huge windfall. But for the 99.99 percent of the electronic commerce world, that would be bad news with bells. If the courts conclude the patent claim is valid, Divine will be able to go after any company, retailer or distributor in the e-commerce food chain that it believes has illegally appropriated its shopping cart patent.

As much as anything, Divine owes its patent claim to a quirk of history. When it took up Open Market's claim in the mid-1990s, the U.S. Patent Office was mostly doing hardware patents, and software patents were just beginning to appear on the scene. Until then, the government did not have much of a body of knowledge to weigh before issuing software patents.

If it knew then what it knows now, Uncle Sam would--and should--have stamped the request "return to sender."

Charles Cooper is the executive editor of commentary at CNET News.com.

Topics: Patents, E-Commerce, Legal

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

0 comments
Log in or register to start the discussion