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Online Auctions Patented, eBay Sued
mattfusf writes "This article from News.com talks about a guy who has filed a lawsuit against eBay for patent infringment. Patent 5,845,265 covers a "method..for creating a computerized market for used and collectible goods""
Thomas Woolston could just auction those patents off on eBay. He'll make a killing and save on lawyer fees.
And can you imagine "what if" someone had a patent on *normal* auctions?
This whole issue of patents for "doing things with computers" is getting a bit out of hand. I'll be curious to see the outcome of this.
This might actually help in the effort to get people to rethink the role of the patent office in the digital era. I welcome this nonsense...the higher the profile (eBay!), the greater the impact.
What's that saying? The worse the better?
patent method of acquiring money solely from exploiting patent institutions. In this way I can sue everyone who tries to sue anyone for patent infringement. I can even sue anyone who tries to sue me.
University of Turku has had an online aucion server for 10 years or so. They used to e.g. auction all their old computer gear, instead of throwing them away. It was pretty popular, although I think they have taken the service offline now.
while true;do echo -e -n "\033[s\n\033[u\134_\033[B";done
The patent was filed in 1995, and other companies are already licensing it. Looks valid (under the current rules) too. The only way I see for eBay to keep from getting raped in the courts is for business method patents to be tossed entirely.
Adobe getting hit with DMCA problems, Verizon and the RIAA going at it over DMCA, eBay with patent problems. If enough large and publicly traded companies get hurt by this sort of stuff it could be a good thing. In the long run.
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You are confusing patents and trademarks. You must defend your trademarks, or you will lose it. With a patent you can let infringment slide as long as you want, and so long as the patent hasn't expired still sue. Case in point: the gif patent
But am I missing something?
Patenting an online auction in my mind is akin to patenting the idea a selling milk in refrigerated display cases, ie,
This patent is for a system that creates a refrigerated marketplace for milk using a refrigerator in a store. The patent also covers the use of a payment-processing service to allow purchasers to pay for the goods.
I mean, where's the creativity that patents are supposedly supposed to protect? In my mind, virtually any business transaction can be ported to the internet. It would be like someone patenting sales calls over a telephone when telephones were first invented.
"We're sorry, but the website you're trying to reach has been disconnected."
Personally, I think the "cure" is for patent law to be modified so that an absolute description is needed for a patent to be validly claimed rather than the woefully ambiguous "a method of performing auctions..." What kind of crap is that? Can I patent "..a method for transmitting gaseous oxygen in a liquid medium..." then sue everyone for having blood? Of course not, but that's just as silly (ok, so actually that's more silly, but you get my point.)
Shakespear was right: First thing we do, kill all the lawyers. They're the reason this sort of mess is around in the first place.
In all seriousness, this is akin to domain prospecting, at least if you stretch logic a little. We have a little nobody taking advantage of a loophole in an attempt to gouge an organization with deep pockets. The /. crowd may instinctively side with the little guy on things like this, but the businesses that employ us need to be protected from this kind of thing.
perl -e 'print $i=pack(c5, (41*2), sqrt(7056), (unpack(c,H)-2), oct(115), 10)'
and defended those patents ferociously. AT&T even more so. This is nothing new.
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So LEGALLY, it appears that eBay is at fault. This doesn't address the fact that there is such a huge hole in the entire software patent/intellectual propterty concept.
Legally, this guy has a claim, but by all rights he shouldn't. This is exactly why patenting ideas and business models is stupid. This guy is a lawyer (patent attorney no less), and has gone after priceline.com and goto.com for infringements on some of his other patents.
As long as the system is broken, people will take advantage of it.
My beliefs do not require that you agree with them.
- Having to pay huge fees for patent searches. Because of this it usually ends up being cheaper to send in a patent application and then let someone else scream prior art.
- Now with international law protecting patents of other countries, it just became even more complicated to make sure that there was no prior art.
- The obvious is being patented (this is obvious to
/. readers). Then again, when you aren't working in a given field what is obvious will vary. This means that we really need a means of public screening of patents.
There is no such thing as a perfect system. Anything is open to abuse, so there needs to be guidelines and reviews for a system to be run as close to the original intent as possible.Jumpstart the tartan drive.
The trust issue is the key to the online patent, not the auction.
Online auctions are obvious, a trustworthy auction is the innovation.
(When did the USPO go "For Profit?" Who was in power, albeit not in possession of any higher cognitive abilities?)
This type of mandated idiocy won't stop until the USPO get sued for some really big bucks and whoever issued the patent, reviewed it, supervised and made money from letting it escape it, gets their ass fired.
I think this might be the case that breaks the camel's back. ebay should sue the patent office for interfering with their normal existing legal business operations.
In fact, it might be fun to try taking out a patent on the information recording portions of the patenting process and sue the USPO for patent violation.
Bill Gates was right in his 1991 memo. The application of software and process patents will bring the very concept of innovation to a stand-still.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
"A method of sending out unsolicited mass electronic mailings to email addresses of individuals who have expressed absolutely no interest in the product or service being offered. Such 'spam' is to consist exclusively of worthless potions, creams, and pills for enlarging or reducing areas of the body, pyramid schemes to get rich quick, offers for clubs no one in their right mind would join, and letters from deposed heads of state begging you to help move money from poor African nations."
If only someone would patent *that* and sue the #$%@! out of all of the infringers!
This tagline is copyrighted material. Please send $10 for an affordable replacement.
It is true that a trademark must be defended or lost, but that does not imply there are no "snooze and lose" aspects to patents. In fact, the original poster is somewhat correct. The doctrine of laches. Patentees against whom the laches defense has been successfully invoked are barred from collecting only those damages that accrued prior to filing suit.
The defense contains two elements:
1) The patent holder delayed bringing suit and that delay was unreasonable and inexcusable; and
2) The alleged infringer suffered materially prejudicial harm from the delay.
The doctrine is supported by caselaw: A.C. Auckerman Company v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992), citing Lane & Bodley Co. v. Locke, 150 U.S. 193 (1893).
Does no one think of the effect their frivolus patents might have on the industry as a whole? So, let's assume Woolston does indeed have an enforceable patent, and he manages to sue eBay and either get a big chunk of cash, or force them to change their business model to avoid infringement... does this guy realize the potential damange he can cause to the industry as a whole? Does he care?
Probably not. Personal greed is the American Way. It's more important that I get MY piece of the pie, even if it means letting the rest of the pie spoil -- at least I got mine!
eBay is one of those *few* examples of a pure internet business that is doing well and making money. Given the state of the economy today, I feel this kind of attempt is almost criminal in intent. It's pretty close to sabotage for this corner of the technology sector, way to go! Make sure your lawyer asks for the firstborn of their CEO too!
I'm pretty certain that the exact implementation details of eBay's software (the algorithm, if you will) are pretty different than what this guy envisioned for this baseball trading-card exchange system. I'm quite sure that had he written software to do this, there would be no copyright infringement between the two... and there's the problem. He's claiming an overly broad patent on an idea, when he probably only has the right to an algorithm. Yeah, *I* had ideas about online trading in the 1980's too buddy, so did half the people who had even heard of the internet (or how about fidonet? or just plain bbs's???). Anyone remember the online trading games from those days? If anything, THOSE probably pre-dated his scheme -- they just didn't handle real products.
I got called to pay my "voting tax" next week (Jury Duty), and I would dread being on a case like this. While common sense would have me acquit on the basis that a broad "patent" like this is a mockery of the Office, and that even if eBay were abusing it with intent, I'd still not have much sympathy for this guy -- it's still the law, and I'd still have to vote according to what the law says, not what it means (since laws are no longer by the people -- if you need a lawyer to explain a law, there's something WRONG!).
The Nasdaq has been running on-line "auctions" for quite some time now. The patent claims the autions are for "used goods and collectibles", and stocks probably don't count as "used goods or collectibles" (except for my portfolio...) but come on, that's a pretty small difference...
I hold 26 patents, and you are all infringing on them. The following are my intellectual property, so stop using them without paying licencing: A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,X,Y, and Z. My patent for the comma is pending, so be ready to pay for that, too.
That's Bigboo TAY! TAY!
Here is the first ebay post dated 1995/09/12 from google groups: http://groups.google.com/groups?selm=pierre-120995 2317370001%40pierre.vip.best.com
The patent was filed November 7, 1995. Sorry, two months too late!
Who cares if he had the idea patented before Ebay. Who cares if Ebay knew about it and willfully violatd the patent. The big thing that matters here is the fact that someone can patents something like "online auctions." That's not what patents were designed for. Patents were designed to protect inventors... inventors of new ideas, not people looking to make a quick buck or own a group of ideas. Auctioning something offline or online should not make a difference. If you can't patent something offline you shouldn't be able to patent it online, it makes no difference. A good majority of these stupid patent claims come from the patent office to allow people to patent things that they normally wouldn't be able to patent, just because they are doing them online.
Actually, it strikes me as proper that a patent would be used to protect an individual's invention (in this case, a business process, which is allowed under current rules) against a large and otherwise unasailable uberCompany.
One. Patents are not made to stifle business. They are made to protect the inventor.
However, the whole concept of inventing an "online auction" is so damnably ridiculous that there is no way that he should ever have been granted a patent for it. This whole argument is founded in the fact that the man said "uh, auction on a computer!" and got a patent. WTF ever. Auctions have been around for centuries. People can not apply the phrase on a computer on the back of every tried and true business model and expect to get royalties or the ability to sue the bejesus out of people.
Oh, and when you use the phrase unasailable uber-company, it makes us all think of you as a useless leftie that thinks that eBay is "evil" simply because it is big. The last thing I checked that eBay did to ruin or world and our freedoms was consume electricity. So go attack Dow Chemical, Halliburton, or McDonald's. All eBay has done for me is make sure that I am not getting price gouged. At the very least, if you are going to go after corporate America, go after the ones that are fucking up people's health, the government, and the planet.
You kid, but I remember a story from a year or so ago about this guy who has made his career by looking for trends in industry, filing a very broad, generic patent, and ammending it to become more specific as the technology solidifies, and going after the people who invented the technology for patent royalties.
I searched the archives and google, but wasn't able to find a link to the story. Maybe someone else remembers the story, too.
eBay's lawyers may be quite right in saying they have a reason to be hopeful. The patent numbered 5,845,265 has a relatively vague abstract that makes it sound like eBay's business model. But if you read further in the claims, you'll see that what this guy is claiming is something entirely different.
Claim #1 describes a basic system for an on-line auction house where the actual, physical good is escrowed by the auction house, bar-coded, photographed, and placed on a Web site to be bid on. This process is elaborated on in claim #3 with sufficient detail as to make clear that the intent of the patent is to mediate a traditional auction of physical goods by replacing bidders' paddles with on-line terminals.
The mechanisms described for inventorying auctioned goods comprise a major portion of the claims, in particular #15. Subsequent claims from 18-22 do sound more like what eBay does at the conclusion of an auction, but even so, it's up to the buyer and seller on eBay to consumate the transaction. This patent assumes the auction house is clearing the transaction before releasing the physical goods. Seems like another difference with eBay's model.
In my own, particular opinion, I think that it will be settled out of court because eBay will likely be able to demonstrate it can potentially prevail if it goes to trial. Prediction: $10M in one time, go-away money. No royalties, no court case.
Shut up and eat your vegetables!!!
says the owner of patent #1282211112: Method for online trolling.
Free Mac Mini Yeah, it's
> Here's [google.com] an online auction for a bunch
...
> of legos in 1994. It's just the first thing I
> spotted on google groups.
Online auctions via USENET were going on all the time pre-1995. rec.games.video.classic was a common group (which I frequented) that had online auctions. I ran a few myself before Ebay started and took a little of the "database" work (which I had some custom programs I wrote on my Amiga 500 handling) off my hands. Google had a few of my r.g.v.c auctions from 1994 / 1995, and using advanced search, you can find a few even older. For example (not my auction), message ID 23APR199308590840@watson.bms.com
Sometimes, making something everybody and his pet cat does already a little easier is worth patenting. But "a method of holding automated auctions using computers, databases and the Internet to register and link buyers and sellers, and facilitate transactions" sounds a little obvious to anyone who's run a USENET auction before. Hell, most of the USENET auctioneers were using some sort of database system at the time.
-- Rick
If you put a little thought into it, one could come up with a whole raft of "speculative patents" and conceivably make a killing in the future. All it takes is a little thought.
- 1. come up with an idea for a money-making business that is currently impossible due to technological limitations.
of course, the REAL trick to this is coming up with a business idea that can't be done yet, but WILL be possible before the patent expires. Here's one off the top of my head:2. patent the impossible notion
3. wait for:
- (a)technology to make it possible
4. sue the bejeezus out of them for "stealing" your business model(b)someone to start a business using some variation on your idea
(c)them to start making money
"method of extending cellular communications" - a cell phone not in range of a cell tower instead merely connects to the nearest other cell phone which is in range and uses it as a relay for the call. I'm sure this idea has been thought of, but has it been patented yet? Could one write up a vague patent spec that would cover any future implementation of the concept? maybe...
If a job's not worth doing, it's not worth doing right.
Alas, there's too much prior art now to file it -- unless, of course, the patent office were to start approving patents with no regard whatsoever for their validity....
The other is the capitalist system we are in - which has been proven to work great. Individuals assert their own rights and work to benefit themselves and in doing so, benefit society at large.
No. The robber barons of the early steel and oil industries did not work to the good of society. They amassed massive personal wealth in order to create personal dynasties that still last to this day (Rockefeller, Carnegie, etc.). This was done to the detriment of the mass of society (low wages, child labor, massive numbers of industrial accidents, union busters, etc.). It is an inverse proportion: the smaller the concentration of wealth, the greater the rest of society is screwed. Look at every accumulation of massive person wealth through history and you will see the exploitation of societies for the gain of a few.
The first is the communist system. It's a great idea in principle, but as anyone older than 15 will tell you, it just doesn't work.
And that same person will tell you the same about capitalism. We live in a complex world and any simple model will eventually break down. Sure, capitalism works great at first (as does communism). There is a level playing field, lots of entities competing, fast innovation in the industry. But then one or two players emerge as the strongest and the competition dies away. The industry consolidates, barriers to entry are raised, and there is a hardening of the arteries. At this point, capitalism fails because the barriers to competition are prohibitvely high and competition dies. And this is the best case; if some players start with an unequal advantage, the hardening and consolidation can occur before the industry even begins. E.g., Microsoft entering a new industry and using its billions to bar others from competing by giving away the product or the broadband providers using legislation to make it harder for competitors to compete.
The same thing happens at a societal level. Face it, if a person is born rich, they have a large head start on everybody else. If the gap between rich and poor becomes too great, it doesn't matter how in-bred, weak, and dumb a blue-blood gets, no one can catch up. Government (societal) regulation is needed to help narrow the gap between rich and poor, to ensure that we all start on a somewhat even playing field no matter who we are born to. No society will be perfect (imperfect world again), but the society that gets closest has the best chance of success because it is less likely that their next Einstein will be shot dead in a ghetto at 15. Competition is great and the best competition occurs when everyone starts from the same place.
If...it would be impossible for eBay to succeed without infringing the patent, I see nothing wrong with eBay sharing some of their profits with the inventor who they owe their success to.
Ah, but there is an incongruency in that statement. eBay infringing the patent and owing their success to it are two entirely different things. Yes, your disclaimer says you are using a fictional patent (not very sporting, changing the subject of debate halfway through). But you don't say that it is any more meritorious than this one, only different. I do agree that the original poster's argument is flawed, but your's is equally so.
It used to be that patents were for inventions; patent applications required a working model or plans for the invention being patented. Some good examples of this (and the patent system at its best, although there were also abuses) are provided by the American gun industry in the 19th and early 20th centuries, such as the lever-action repeating rifle (the Winchester). Anyone could invent a repeating rifle, but they couldn't use the same lever mechanism to eject the spent shell and load a new one (which was an ingenious solution, both reliable and elegant) unless they licensed it (for a period of time).
Now, however, an applicant can be so abstract as to patent a general idea and not an invention. There is a level of specificity missing. You should have to provide source code, a UML design, something that goes quite a bit beyond what "software" and "business plan" patents require.
How many ideas are truly original? We are all standing on the shoulders of giants, afterall. What is important is the application of an idea, the creation of something unique.
So, eBay can not avoid infringing the patent and yet does not owe any of their success to the "inventor" (a misuse of the word) of the patent. That is a telling sign that our patent system needs some revision. Besides which, the patent was filed a couple months after the first post on eBay. Another problem with our patent system.
Yours,
Nathan
1) File patent
2) Sit back while patent is adopted
3) Sue the crap out of everyone
4) ???
5) Collect underpants!
.
- First they ignore you, then they laugh at you, then ???, then profit.
listen here:
http://chkpt.zdnet.com/chkpt/hud00058rad/http://ww w.cnet.com/radio/playlist/live.asx
Even though the judge and every lawyer in sight will disagree with this... Your purpose on the jury is to judge the law in the context of the accused. The jury is the last check and balance in the system. Use it when you get the chance.