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

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: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

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.

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"

--

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.

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

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...