Patent infringment - you may be next [e-commerce patents]

PanIP claims that if you use graphical and textual information on a video screen for purposes of making a sale, then you are infringing on its patent. Read more on this story here.

Patents. They protect us when we come up with a great piece of technology, and allow us to reap the rewards from our hard work and intellectual property. As a creator of intellectual property myself, I thoroughly understand and support the need for patent and copyright laws. Without them, innovation and creativity would be severely stifled.

A company called PanIP holds patents that it claims apply to any web site that contains text and graphics, and can obtain credit card and financial information from a user. That means just about anyone doing business on the web is infringing on its patent. PanIP's vision of E-business is that it is like a utility, and they are the only game in town. What's next? That's like claiming you have a patent on air, and charging people to breathe it.

What's most disturbing about this (even more disturbing than the fact that the US Patent Office granted these patents in the first place) is that PanIP has filed suit against dozens of small to mid-size companies and is actually collecting money from them. They haven't gone after any larger companies which is logical, I guess. If you're going to be the classroom bully of the Internet, it makes sense to only pick on those that are smaller than you lest you get your corporate nose bloodied.

There's no rhyme or reason in PanIP's selection of victims. They range from an online candy company, to plumbing supply firms and a variety of mom 'n pop operations. The only thing these companies have in common is that they probably don't have enough money to defend against such a ridiculous lawsuit. Defending against a patent lawsuit is incredibly expensive, no matter how far-fetched the claim. It could easily cost millions of dollars and bankrupt the defendant. Several of the defendants have decided to settle, seeing no other alternative than to give in. In the meantime, PanIP is collecting settlements and building up a war chest, perhaps in anticipation of going after bigger fish.

A few others have decided to fight. A group led by Indiana-based DeBrand Fine Chocolates has set up a site, http://www.youmaybenext.com, to keep people up to date on the latest developments.

Should PanIP get its way, the fate of the web and the future of E-business would be entirely in their hands. Another company, Divine, Inc., holds a patent on electronic shopping carts. Although unlike PanIP, Divine's entire business model doesn't revolve around extorting money from small companies - they do produce valuable goods and IT-related services that are highly regarded in the marketplace - the potential is there for the same sort of abuse. Almost everyone doing E-commerce uses an electronic shopping cart, and they've become almost generic. They're widely available cheap or even free, and come as part of almost any E-commerce package on the market. Another company tried to claim a patent on hyperlinks.

Given the unorganized nature of the Internet, it was inevitable someone would try to claim ownership of its vital processes and try to cash in. If they're successful, the results could be devastating to E-business everywhere.

Dan Blacharski has authored several books on technology, business and entrepreneurial concepts. He has been a freelance writer and editorial consultant for over ten years and currently covers high-tech topics for the trade press. Read more about his work at http://www.startuptrends.bigstep.com, or write him at mailto:dan.blacharski@itworld.com.

The article manages to commit the sin of not actually informing the reader about the subject patent. It can be found at U.S. Patent Number 5,576,951.

The patent's key claim is:

1. A computer search system for retrieving information, comprising:

means for storing interrelated textual information and graphical information;

means for interrelating said textual and graphical information;

a plurality of entry path means for searching said stored interrelated textual and graphical information, said entry path means comprising:

textual search entry path means for searching said textual information and for retrieving interrelated graphical information to said searched text;

graphics entry path means for searching said graphical information and for retrieving interrelated textual information to said searched graphical information;

selecting means for providing a menu of said plurality of entry path means for selection;

automatic data processing means for executing inquiries provided by a user in order to search said textual and graphical information through said selected entry path means and for fetching data as a function of other data;

indicating means for indicating a pathway that accesses information related in one of said entry path means to information accessible in another one of said entry path means;

accessing means for providing access to said related information in said another entry path means; and

output means for receiving search results from said processing means and said related information from said accessing means and for providing said search results and received information to such user.

From the Onion:

MICROSOFT PATENTS ONES, ZEROES

REDMOND, WA—In what CEO Bill Gates called "an unfortunate but necessary step to protect our intellectual property from theft and exploitation by competitors," the Microsoft Corporation patented the numbers one and zero Monday.

Above: At a press conference beamed live to Microsoft shareholders around the globe, Bill Gates announces the company's patenting of the binary system.
With the patent, Microsoft's rivals are prohibited from manufacturing or selling products containing zeroes and ones—the mathematical building blocks of all computer languages and programs—unless a royalty fee of 10 cents per digit used is paid to the software giant.

"Microsoft has been using the binary system of ones and zeroes ever since its inception in 1975," Gates told reporters. "For years, in the interest of the overall health of the computer industry, we permitted the free and unfettered use of our proprietary numeric systems. However, changing marketplace conditions and the increasingly predatory practices of certain competitors now leave us with no choice but to seek compensation for the use of our numerals."

A number of major Silicon Valley players, including Apple Computer, Netscape and Sun Microsystems, said they will challenge the Microsoft patent as monopolistic and anti-competitive, claiming that the 10-cent-per-digit licensing fee would bankrupt them instantly.

"While, technically, Java is a complex system of algorithms used to create a platform-independent programming environment, it is, at its core, just a string of trillions of ones and zeroes," said Sun Microsystems CEO Scott McNealy, whose company created the Java programming environment used in many Internet applications. "The licensing fees we'd have to pay Microsoft every day would be approximately 327,000 times the total net worth of this company."

"If this patent holds up in federal court, Apple will have no choice but to convert to analog," said Apple interim CEO Steve Jobs, "and I have serious doubts whether this company would be able to remain competitive selling pedal-operated computers running software off vinyl LPs."

As a result of the Microsoft patent, many other companies have begun radically revising their product lines: Database manufacturer Oracle has embarked on a crash program to develop "an abacus for the next millennium." Novell, whose communications and networking systems are also subject to Microsoft licensing fees, is working with top animal trainers on a chimpanzee-based message-transmission system. Hewlett-Packard is developing a revolutionary new steam-powered printer.

Despite the swarm of protest, Gates is standing his ground, maintaining that ones and zeroes are the undisputed property of Microsoft.

Above: Gates explains the new patent to Apple Computer's board of directors.
"We will vigorously enforce our patents of these numbers, as they are legally ours," Gates said. "Among Microsoft's vast historical archives are Sanskrit cuneiform tablets from 1800 B.C. clearly showing ones and a symbol known as 'sunya,' or nothing. We also own: papyrus scrolls written by Pythagoras himself in which he explains the idea of singular notation, or 'one'; early tracts by Mohammed ibn Musa al Kwarizimi explaining the concept of al-sifr, or 'the cipher'; original mathematical manuscripts by Heisenberg, Einstein and Planck; and a signed first-edition copy of Jean-Paul Sartre's Being And Nothingness. Should the need arise, Microsoft will have no difficulty proving to the Justice Department or anyone else that we own the rights to these numbers."

Added Gates: "My salary also has lots of zeroes. I'm the richest man in the world."

According to experts, the full ramifications of Microsoft's patenting of one and zero have yet to be realized.

"Because all integers and natural numbers derive from one and zero, Microsoft may, by extension, lay claim to ownership of all mathematics and logic systems, including Euclidean geometry, pulleys and levers, gravity, and the basic Newtonian principles of motion, as well as the concepts of existence and nonexistence," Yale University theoretical mathematics professor J. Edmund Lattimore said. "In other words, pretty much everything."

Lattimore said that the only mathematical constructs of which Microsoft may not be able to claim ownership are infinity and transcendental numbers like pi. Microsoft lawyers are expected to file liens on infinity and pi this week.

Microsoft has not yet announced whether it will charge a user fee to individuals who wish to engage in such mathematically rooted motions as walking, stretching and smiling.

In an address beamed live to billions of people around the globe Monday, Gates expressed confidence that his company's latest move will, ultimately, benefit all humankind.

"Think of this as a partnership," Gates said. "Like the ones and zeroes of the binary code itself, we must all work together to make the promise of the computer revolution a reality. As the world's richest, most powerful software company, Microsoft is number one. And you, the millions of consumers who use our products, are the zeroes."

"But why should we even have to go through the process of defending ourselves against bogus patents? It should always be the burden of the patent holder to prove that their patent is violated and if they fail, they should be heavily fined by the court. If you bring a bogus suit, you should pay out the ass because litigation is not a casual thing."

A loser pays system would make sense. But keep in mind every time you read one of these outrageous stories that for each outrage, there are hundreds of patents that are properly protecting inventors as the founders intended. These are useful tools to encourage innovation and disclosure, and the system largely works.

There is a strong disincentive to bring suits with these patents that should not have issued, because all it takes is one judge to find it invalid, and it is gone.

These stories fall into the category of most journalism:
"If they print it, it's because it's interesting. If it's interesting, it's because it's unusual. If it's unusual, it's unimportant." Thus, if they print it, it's unimportant.

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