Patent On Software Downloads Upheld

PacketMaster writes: "A U.S. Federal Circuit Court today ordered a lower court to reconsider its ruling on this this patent -- detailing downloading software over a network or the Internet. The full story at news.com details this on-going battle. This latest ruling indicates that the courts consider the patent, filed by a company called E-Data in 1985, a valid patent. E-Data's plan is to charge a license fee for all data downloaded over the Internet. The main companies standing against this patent are Intuit and AOL/Time-Warner's Compuserve division." Yes, E-Data would like to collect on every software download.

Comments

Re:Seven years?

[Masem]

FYI, it's now 20 years but starting when the patent was applied for as opposed to previously when it was 17 years from when the patent was granted.

And I don't think this is retroactive. Patents before some date in 1999 (IIRC) are still 17 years from awarding; anything after is 20 years from filing.

Many companies, notably drug makers, used the prior rules, and the fact that they could accidently 'forgot' to fill in paperwork that would keep the patent approval process going, the USPTO charging them a minimal fee ( I think $500.00 ) for this 'late filing' charge. However, during this time, while the patent wasn't granted, the company filing did have some basic protection on the patent, and the patent documents were not public, so an enterprising company could easily get about 22 years of protection for a small incidental fee. Note that the typical time between submission and awarding of a patent is around 2 to 3 years in the first place (assuming that everyone plays by the rules).

The new system says that once you've submitted a patent, the 20 year timeline starts ticking. In addition, as soon as it's reasonably possible, the patent document is placed in the public domain (eg USPTO's website), though the company does have protection on it's invention. This still gives companies sufficient protection on their inventions, but does prevent abuses of the system.

Going from 17 to 20 years really doesn't drastically extend the protection a patent gives it's owners with the given rules, it simply helps avoid abuses in the system.

Re:How old is FTP?

[armb]

It's not really "every software download". It's downloads "uniquely identified by a catalog code" to a "point of sale". I suppose a file path might be "a catalog code", though it sounds dubious, but FTP doesn't involve a "point of sale".

Sure, it's still a dumb patent that should never have been granted, but it isn't _that_ dumb.


--

Sensationalism

[HEbGb]

The article, as written, is wrong (as usual).

The higher court merely sent the case back to the lower court for reconsideration. It did NOT issue a ruling on whether the patent was valid, only that the lower court should reconsider its original ruling.

The words were also twisted in the submission to give it more controversy - for example, the company never claimed that they had any intention of exacting royalties for "every internet download". This was a statement made by the defendants to win favor with the court!!

Any patent defense has two strategies - first, you can get the patent declared invalid, and second, you claim that you aren't infringing. This case applies only to the first. There's plenty of battle left ahead on the second point.

I doubt they'll ever extort royalties from this. It's very clear after reading the patent that it is, indeed, extremely limited, regardless of the court's interpretations.

Re:Sensationalism

[startled]

The higher court merely sent the case back to the lower court for reconsideration. It did NOT issue a ruling on whether the patent was valid, only that the lower court should reconsider its original ruling.

This, also, is misleading. The lower court didn't declare the patent invalid-- it said that it applied only to sales from kiosks and such. And when a higher court tells a lower one to "reconsider", it doesn't just say, "hmm, you should take another look at that". It gives its grounds for disagreement, and provides guidelines that the lower court should follow. In this case, it said that the lower court had interpreted the patent too narrowly.

Any patent defense has two strategies - first, you can get the patent declared invalid, and second, you claim that you aren't infringing. This case applies only to the first. There's plenty of battle left ahead on the second point.

Precisely the opposite, in fact. The lower court's ruling was that the patent applied to kiosks, and hence the companies involved weren't infringing. The higher court said the patent should be broader than that. If that holds, then there will be a huge argument over the validity of that patent, with a huge opportunity for prior art.

Re:Seven years?

[Chelloveck]

You thought wrong. It had been 17 years, and has been changed to 20 years. So that puts it at 2002 or 2005, depending on when the law was actually changed. But since E-Data has had this in court for years now, they can still try to collect fees retroactively. (Not to say they'll succeed, but they can try.)

As the lower court originally decided, this patent appears to apply primarily to kiosk systems. In that context it might be valid. However, the higher court ordered the lower court to "reconsider the scope" of the patent, stating that it should apply to all downloads. This may be a smart move on the court's part, since there was lots of prior art in 1985 regarding information downloads. I was downloading from BITNET then, and the FIDOnet and UUCP networks were alive and well. If the scope is determined to apply to all such downloads the patent can probably be overthrown completely.

Or then, the higher court may just be smoking something...

Chelloveck

Re:All file retrieval?

[Shotgun]

I don't think it covers all file retrieval. It appears to be more targetted to the download of software requiring an unlock code. This unlock code is transferred upon their receipt of an authentic request. From what I've read, this transfer seems to be done electronically.

Nor does it appear that this patent applies to software protected using electronic licenses (i.e. copy protection or feature limiting licenses).

And, to me at least, there lies the whole problem. It appears. It seems. What kind of judicial system allows laws and documentation that require advanced degrees to even understand? If ignorance of the law is no excuse, shouldn't law have to be written in understandable language. And don't give me any bullshit about $10 words being required in order to make the law more specific, 'cause that is complete bunk. I've seen enought technical documentation to know that it is possible to be clear, conscise and understandable all at the same time. All the bullshit rhetoric in patent applications and on the lawbooks are there simply to confuse the masses and make them hire lawyers.

Why can't we elect some judges that will let people off because the law isn't in English (or other native language as it may apply) instead of some twisted, latinesque, lawyerese? For instance, this judge should simply rule that noone can infringe on this patent, because an average person would need weeks to understand what the fuck it means.

Sorry for the rant, but the previous post was clear, concise and contained not noticeable misspelling. In short, Ronin Developer is literate in English, yet he can't decipher a document that purports to limit his activity. What kind of justice is that!?!

Well, everyone says that my PC is a POS...

[Flower]

But I didn't know I would have to keep paying to use it!

Not on "every" software-download...

[morzel]

... just the US-based ones. USPTO doesn't mean diddly squat over here in Europe ;-)

Seriously - I don't consider my PC a "point of sale location", so the usual transactions over the internet are indeed as the lower court stated waaaay out of the scope of this patent.

But it seems to me that a CD-shack downloading tracks to burn them for their customers would have to cough up the money. Same goes for "on-line digital cinema", where HDTV is streamed from the moviestudios to the local cinemas. Those two example applications fit much better in the scope of "reproducing information at a point-of-sale location", they would have a problem countering this (if it weren't for the infinite amount of lawyers and the infinite amount of time of the MPAA ;-)...

You can't blame 'm for trying, after seeing the other patents that USPTO granted (and that were enforced in US courts).

Okay... I'll do the stupid things first, then you shy people follow.

Re:All file retrieval?

[Ronin Developer]

I don't think it covers all file retrieval. It appears to be more targetted to the download of software requiring an unlock code. This unlock code is transferred upon their receipt of an authentic request. From what I've read, this transfer seems to be done electronically.

Nor does it appear that this patent applies to software protected using electronic licenses (i.e. copy protection or feature limiting licenses).

Now, I'm too lazy to read the whole patent, but if I encrypt my file for download and then send the unlock code later (via snail mail, for example), do I violate this patent?

RD

Re:Good test of patent system

[DreamerFi]

I did read - and you actually prove my point. The 'system' has refused to let it go anywhere for a long, long time, simply because the outcome is either "go stick your patent where the sun doesn't shine", which is bad for patent law, or "go collect mucho bucks from everybody". Actually, just letting it die slowly in courts may be the best solution...

Good test of patent system

[DreamerFi]

As one lawyer said in the article: "If the patent owner prevails in its view, they stand to be wealthier than Microsoft"

Really? Really really? If it's really about that large amounts of money, companies are going to fold or relocate outside the USA, rather than pay up. Does anybody here really think that's going to happen? In the unlikely event that a judge allows this company to win, the USA will have to reconsider its patent system or risk hurting the economy real bad.

My prediction is that this case will sizzle and die, never to be heard of again. The stakes are simply to high.

Coin Slot?

[Sc00ter]

So will all computers on the internet need a coin slot?

A dialog box will pop up "Please deposit 35 cents for the next 5megs please"

--

Re:Coin Slot?

[Grinch]

So will all computers on the internet need a coin slot?

Not quite - but close. If this patent stands, it will be the end of flat-rate access plans. Someone will do a study that shows that X% of a home user's traffic is downloads - and that number will be used to figure a royalty payment based on your bandwidth use.

Think about it - how else could enforcing this patent work? Using anything other than averages and estimates would require detailed logging of a user's every online "move," in order to distinguish between downloading and other behavior. You can imagine how well *that* would fly.

Remember, you read it here first!

A monetary transaction must take place?

[sahala]

I could be wrong, but it seems like a monetary transaction has to take place. These dude's at E-Data think they have patented a procedure by which one purchases information (software) remotely.

from the actual patent doc:

16. The method of claim 1 wherein each information is uniquely identified by a predetermined catalog code and a dollar charge code, the dollar charge code indicating the amount of money to be charged in connection with the reproduction of said information ...blah blah blah

and

The present invention relates generally to a system for reproducing information in a material object at a point of sale location.

So basically things like FTP, HTTP, and Kermit don't really apply. They're not really saying they invented the concept of downloading.

The district court previously ruled that the patent was too narrowly focused, applying for for download, sale, and "physical reproduction" (tape, VHS, CD?) at a specific kiosk or physical store front and not a ubiquitous browser or other software client. I'm curious what portions of the patent were broad enough that the U.S. Court of Appeals for the Federal Circuit would throw the decision out the window.

Anyway, it looks like Intuit and Time Warner have the following options:

battle this out in court

wait for the patent to "expire" (4 more years)

sidestep the patent by temporarily finding another way to facilitate online software purchases.

Prior Art: Kermit, anyone?

[clyons]

As the lower court originally decided, this patent appears to apply primarily to kiosk systems. In that context it might be valid. However, the higher court ordered the lower court to "reconsider the scope" of the patent, stating that it should apply to all downloads. This may be a smart move on the court's part, since there was lots of prior art in 1985 regarding information downloads. I was downloading from BITNET then, and the FIDOnet and UUCP networks were alive and well. If the scope is determined to apply to all such downloads the patent can probably be overthrown completely.

There is prior art up and down the Yin Yang on this. this document places the innovation of Kermit in 1981, while RFC 765, describing the FTP protocol, dates back to June 1980.

You also mentioned Unix to Unix Copy Protocol. According to this history of the internet, AT&T labs developed the UUCP suite in 1976.

Or then, the higher court may just be smoking something...

Sometimes, I think the only reason that drugs are illegal is to prevent us from understanding the system. :)

--

Prior technology?

[bildstorm]

Wouldn't the concept of FTP, being designed in an RFC from 1980 be prior art?

Granted, this may not help for the sale of items over the Internet, but that DOES mean that they couldn't claim EVERY software download.

err, this patent is applicable how?

[iainl]

"The present invention contemplates a system for reproducing information in material objects at a point of sale location wherein the information to be reproduced is provided at the point of sale location from a location remote with respect to the point of sale location, an owner authorization code is provided to the point of sale location in reponse to receiving a request code from the point of sale location requesting to reproducing predetermined information in a material object, and the predetermined information is reproduced in a material object at the point of sale location in response to receiving the owner authorization code."

Maybe I'm stupid, but from the abstract above, and a quick scan of the patent its constantly referring to the reproduction of material objects. I thought that patents were specific enough that if you say 'material object' then 'non-material information' doesn't get covered. By bending the meaning a bit I can see how this might be construed to cover, say one of those machines that can download and bind a book for you in a shop, but I can't see it meaning I have to pay to ftp a copy of Counterstrike, as there is no 'point of sale' there is no transaction and the exact material object isn't reproduced. Given that data down networks is older than 85 anyway (I remember strange TV programs that broadcast simple programs when you hooked your BBC micro up to them) I can't see this as right.

Re:err, this patent is applicable how?

[Charles Dodgeson]

Maybe I'm stupid, but from the abstract above, and a quick scan of the patent its constantly referring to the reproduction of material objects.

You didn't scan the text slowly enough. It talks about reproduction of information in material objects, so copying information to a disk would be covered by that.

Even Pr0n?

[Rackemup]

If they start charging for pr0n downloads, the entire continent will go bankrupt! =)

And once again .....

[streetlawyer]

Slashdot shits its pants in public by not reading a judgemetn properly. This was a case where the full court reiterated a decision made in an appeal last year, whereby they ruled on a lower court's interpretation of what the patent claimed. They have made no ruling on whether the patent is valid or enforceable; merely that it claims what the plaintiffs say it claims. "Upheld, my ass". The quote at the end of the original cnet story says it all.

"This case has a long way to go yet," said attorney Daniel R. Harris, a patent expert and a partner at Brobeck Phleger and Harrison. "All the (federal court) did was look at the language of the (lower court's) finding and decide it was too narrow. They still have to figure out if the patent is valid and whether or not the defendants infringed on the patent."

This ruling is just the same court, saying the same thing as it did before, this time with all its judges present.

Dear E-Data:

[The Gline]

Bite me.

Love,

The Internet

Hey!

[CaptainZapp]

I think I'll go file my patent for "buying stuff from a store"

And how sir, do you think you get to that store?

I own patent 4711/12345 "A method of movement by moving one foot in front of the other to get from a place to another place, regardless of the pace with which this method is applied".

So don't you dare to even walk(tm) to your car without transferring a lot of $$$ into my general direction.

walk(tm), walking(tm), jogging(tm), running(tm) and feet(tm) are trademarks owned and controlled by CaptainZapp enterprises

Information in material objects

[jesterzog]

I also mis-read it the first time and was thinking the same thing, but if you check it a bit closer, it says "information" in material objects. That's a lot more relevant.

I think the key point to this patent without having taken legal advice, is that it's talking about point of sale. As usual all the initial modded-up comments are uninformed and ranting about how they were downloading before 1985. (The slashdot writeup doesn't help.)

But it's really only relevant to people and companies who are selling downloads. So if you require payment before someone can download some information, this patent might (or might not) be relevant.

I'm wondering how easy it might be to get around simply by changing the system slightly, like checking for authorisation code twice instead of once for example. I'm sure I remember an audio clip of that patent office guy stating that Barnes & Noble could quite feasibly run a 2-click ordering system to avoid infringing on Amazon's 1-click, and that would seem like the same sort of thing.

===

Re:Information in material objects

[Twylite]

#include "std_IANAL.h"

My understanding of the patent system is that patents are very specific. Having a patent for exercising a cat with a laser pointer does not mean you can sue someone for exercising their dog, budgie or cute furry martian in the same manner. Similarly (as you have noted) having patented "1-click shopping" does not give Amazon exclusive rights to "n-click shopping", despite apparent similarities.

Firstly: "Material object" has specific meaning under the law, which does not include non-physical (classically: intellectual) property. Material must, necessarily, be physical. Transferring information and then placing it on a disk and giving the disk to the purchaser would be covered by this patent.

The catch arises in that downloading to your hard drive would also constitute placing data on a disk, and since the point at which the purchase was made was your computer, it would constitute a point-of-sale. Arguably the mere act of such information entering RAM is "reproduction in a material object at the point of sale"; so depending on where you draw the line on "material object" (can it already belong to the purchaser, or must it be included in the sale?) and "point-of-sale" that clause can be read in several ways.

Secondly: As you kindly pointed out (all prior threads seem to miss this rather salilent point) this applies to a limited set of downloads, mostly commercial. Whenever an authorization is needed to initate the download or, conveivably, to interpret the downloaded information, the patent could take effect. In addition the use of "point of sale" as the description of the location strongly implies (but maybe not strongly enough for the courts) the requirement for a sale (negotiated trade or financial transaction) to occur.

So: browsing the web under normal conditions and downloading free software is not convered. Download evaluation software where a registration and key is needed may be covered.

Curve ball: web sites that require authentication and/or use SSL may be grey areas. Consider that under both systems the intended recipient of information must provide some form of authorization in response to a request for such authorization (in the case of SSL without client authentication, that "code" is randomly generated). The only missing part for you to stretch the patent over it (if you had good lawyers) would be the concept of sale. But how broad is sale?

Well, the commercial (capatalist, Western, etc) world holds that no-one does anything for free. The courts have shown a bias towards that view (I'm not bothering to explain the references/logic here). So if you have registered with a site as a user, it could be argued that, in exchange for your right to use the site (the authorization code you were given), you have agreed to a trade, mostly likely the site has permission to e-mail you and share your e-mail address with its partners. That's a sale. Worried yet?

Thirdly: the patent is specific about the method of authorization: the owner obtains a code, and supplies it in response to a prompt at the "point of sale". That's pretty broad -- sure, I believe we could make a protocol that avoided the problem (public keys and signatures, for example, in which case you prove identity rather than supply a code), but most site currently work on the prompt/authorization code principle.

As much as I hate to admit it, I think it is possible to stretch this patent to cover a large amount of the net. But certainly it cannot cover all downloads: free http (non-SSL) websites, free software, e-mail, search engines, usenet and the like cannot (except by an lawyer) possibly be perceived to fit under the umbrella of this bastard.

I've got foolproof prior art

[abe ferlman]

Stock tickers. They do pretty much exactly what this guy describes. Observe this portion of the patent:

28. The method of claim 27 wherein the material object is defined further as being selected from a group consisting of: audio tape capable of having fixed therein information in the form of sound recordings; audio disc capable of having fixed therein information in the form of sound recordings; video tape capable of having fixed therein information in the form of pictures and or audio; video disc capable of having fixed therein information in the form of pictures and or audio; media capable of having fixed thereon information in the form of printed matter (words, symbols and or pictures); devices capable of having fixed therein inforamtion in the form of digital data; or combinations thereof.

(emphasis mine)

Even if this person has a valid patent, this is one of those times where, for the good of the world, you have a moral responsibility to just let it go.

Bryguy

Patent Law - the Uruguay Round Agreements Act

[hillct]

That patent laws on the books state:

Effective June 8th, 1995, the term of plant and utility patents is 20 years from the date of filing. Patents filed prior to June 8th 1995 last the longer of 17 years from the date of issue, or 20 years from the date of filing.

Extensive detail regarding these changes can be found .

--CTH

--

How will they track downloads?

[CygnusTM]

It's probably the same miraclulous software that tracks how many times an e-mail is forwarded, so nickels can be donated to charity.

Re:I bet AOL wishes they had thought of it first..

[fmaxwell]

AOL had started to work on patenting this some years ago. Unfortunately, their users have yet to complete a successful download. Any time now...

In America ...

[s20451]

First you get the patents. Then you get the power. Then you get ... the women.