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Apple sued over methods for repeat iTunes, App Store sales
AppleInsider ^ | 06/02/2009 | By Slash Lane

Posted on 06/02/2009 11:12:43 PM PDT by Swordmaker

Apple, along with more than a dozen other firms conducting e-commerce, have been hit with a lawsuit from a patent trolling claiming first rights to technology that simplifies the re-billing process for repeat customers making purchases through online stores.

The 28-page formal complaint was filed late last month by little-known Actus, LCC in its home town of Marshall, Texas, the undisputed patent lawsuit capital of the United States. It alleges that 15 companies, including Apple, Best Buy, and Amazon, are infringing on one or more of several similarly structured patents -- No. 7,328,189, No. 7,249,099, No. 7,376,621 and No. 7,177,838 -- each of which are titled "Method and apparatus for conducting electronic commerce transactions using electronic tokens."

Essentially, the filings describe a pay-by-click method of e-commerce by which shoppers can quickly make repeat purchases or rentals with a specific online retailer after having first established a billing account that they populate with credits or funds. Electronic tokens swapped between the servers holding customers' account information and those hosting online stores can serve as tender or be used to verify the shopper has sufficient funds or credits for new transactions.

Like many patent lawsuits, Actus' complaint is broad and sweeping, using vague rhetoric that makes it difficult to discern which specific Apple technologies are at issue.

Apple has instituted 1-Click payments as a feature across its online electronics stores, allowing customers who enable the option to make repeat purchases with a single click, forgoing the need to resupply shipping and payment information, which is already stored on the company's servers.

For the iTunes Store, which also handles App Store sales, Apple offers a feature called iTunes Allowances, which lets customers send a monthly iTunes Store credit to a family member, friend, or colleague in an amount from $10 to $200.

"Think of an iTunes Allowance like a piggy bank. Some lucky kids get a monthly allowance and they trade the entire amount for stuff each month," Apple says in its description of the service. "Other kids might decide to put their allowance in a piggy bank and spend it later. iTunes Allowance works the same way as a piggy bank. Unused allowance credit rolls over from month to month until the recipient spends it."

While charging Apple with infringement, Actus repeats the basis of its patents:

If the user account contains electronic tokens having a value equal to or greater than the total price, the user is permitted to purchase the selected subset of products or services without requiring the user to disclose personal information to the vendor. The total price is subtracted from the user account, while the purchase transaction is not subject to a minimum processing fee.

It concludes with allegations that Apple is therefore directly infringing, and indirectly infringing through its "marketing, distributing, using, selling, or offering to sell the following products and/or services: Apple Store, iTunes, and iPhone Apps Store."

Actus is seeking damages and attorneys' fees with its suit, which also names Amdocs, American Express, Barnes & Noble, Cabela's, CitiGroup, eBay, FirstView, Marketing Technology Concepts, NetSpend, Officemax, U.S. Bancorp and ViVOtech.


TOPICS: Business/Economy
KEYWORDS: apple; bestcomputer; macintosh; spamiswindows
Note: Apple licenses the one-click purchase concept from Amazon who patented the idea.
1 posted on 06/02/2009 11:12:43 PM PDT by Swordmaker
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To: ~Kim4VRWC's~; 1234; 50mm; 6SJ7; Abundy; Action-America; acoulterfan; Aliska; aristotleman; ...
Apple and other eRetailers hit with business method patent lawsuit... PING!


Patent Troll Lawsuit Ping!

If you want on or off the Mac Ping List, Freepmail me.

2 posted on 06/02/2009 11:13:51 PM PDT by Swordmaker (Remember, the proper pronunciation of IE is "AAAAIIIIIEEEEEEE!)
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To: Swordmaker
As near as I can tell from reading the four patents, they refer to the use of electronic "tokens" that customers can buy and then exchange for merchandise from the token seller. I cannot see that maintaining a credit balance at a store and using that balance for future purchases is in anyway related to buying "tokens." Apple, and these other defendants, sells their products in exchange for units of the appropriate currency, not some artificial "tokens." Allowing customers to maintain a credit balance for future use in purchases does not strike me as patentable... my business customers do it all the time.

The only eRetailer that may be infringing these patents (assuming they are valid and not so obvious as to be unpatentable), in my opinion, is Microsoft with their Microsoft Marketplace Points where MS requires customers to buy "points" (think tokens) for cash which can then be exchanged for products or services.

3 posted on 06/02/2009 11:30:34 PM PDT by Swordmaker (Remember, the proper pronunciation of IE is "AAAAIIIIIEEEEEEE!)
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To: All
This may also have some effect on not only the outcome of this suit, but the rationality of the business method patents themselves:

Justices to Weigh Issue of Patenting Business Methods

4 posted on 06/02/2009 11:44:33 PM PDT by Swordmaker (Remember, the proper pronunciation of IE is "AAAAIIIIIEEEEEEE!)
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To: Swordmaker

the entire US patent is a sham. Everyone working there should be fired


5 posted on 06/03/2009 3:12:47 AM PDT by 4rcane
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To: Swordmaker
little-known Actus, LCC in its home town of Marshall, Texas

Patent troll extreme. They formed a business and headquartered there just to sue.

6 posted on 06/03/2009 5:00:38 AM PDT by antiRepublicrat
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To: antiRepublicrat; Swordmaker
Patent trolling should be punishable by having to stand in the public square, naked except for a thong, with a sign around the neck saying "PATENT TROLL", every day all day for a year.

After which time the troll is enjoined from doing any business, commercial or legal, involving the internet, for life. Let them weave baskets or something.

7 posted on 06/03/2009 6:37:35 AM PDT by dayglored (Listen, strange women lying in ponds distributing swords is no basis for a system of government!)
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To: antiRepublicrat
little-known Actus, LCC in its home town of Marshall, Texas

Also hometown of Bill Moyers. Coincidence??

8 posted on 06/03/2009 11:31:19 AM PDT by Mind-numbed Robot (Not all that needs to be done needs to be done by the government)
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