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EBay Subject of Patent Action

Posted by timothy on from the think-thunk-sue dept.

spatrick_123 writes "Yahoo! is reporting that a man named Bill Simon is pursuing action against EBay, claiming that he hold patents on essentially every aspect of their operation. Whether or not this is a precedent setting case, it is certainly a large one in terms of what is at stake financially and it will be interesting to watch it play out."

37 of 206 comments (clear)

  1. Just two more years.... by shoemakc · · Score: 4, Funny


    ...until I reveal my talking paperclip patent to the world. Muahaha Muuuahahah

    -Chris

    --
    --an unbreakable toy is useful for breaking other toys--
    1. Re:Just two more years.... by Seahawk · · Score: 3, Funny

      I really need to file a patent for my "inhale air" idea - it has shown great potential in early tests - unlike my "use brain" idea, which doesnt seem likely to be used to sue rich people that annoys me...

  2. Christ.... by neksys · · Score: 4, Interesting
    Things like this really bother me. It'd be one thing if this guy had a valid and real concern about this so-called patent infringement - in which case, he should have approached ebay early on so as to prevent any conflict. Rather, it seems to me at least, that this man has waited until ebay is a multi-billion dollar organization - likely in the hopes of getting some sort of hefty settlement. I see things like this all the time, and frankly, it sickens me - both the patent process, and this culture of frivolous lawsuits that has swept across America in the past couple of decades.

    On second thought, perhaps I should just consider suing Microsoft for infringing on my US Patent #173087007: A Plan and Method for basing a multinational technology corporation in the state of Seattle.

    1. Re:Christ.... by AnimalSnf · · Score: 4, Informative
      Make sure to get the facts first before you go looking for rope:


      "MercExchange founder Thomas Woolston, an inventor and patent attorney who has been granted four online auction-related patents since 1998 and has some 10 others pending, said he sued eBay in 2001 after negotiations broke down over the auction site's offer to purchase his patents.

      The company first contacted Woolston in 2000 with an interest in buying the patents. E-mail to that effect is expected to figure prominently in the case because it indicates that eBay knew about Woolston's patents but continued to infringe them, he said.

      "We expect to be vindicated at trial," Woolston said. "They are rank infringers." ...

      At the heart of the case is patent paperwork Woolston filed less than five months before eBay founder Pierre Omidyar spent Labor Day weekend of 1995 creating the first iteration of his auction site. Today, eBay is one of the most successful online businesses, with nearly $750 million in revenue last year and continued profitability."

    2. Re:Christ.... by Biscit · · Score: 3, Interesting

      That does not totally invalidate the orignal rant- however patents are a double edged sword. They do allow people to protect their ideas so others don't proffeteer leaving the orignial inventor with nothing. However there is a clause which states patents can not be taken out on things that are obvious or common practice. However it sometimes seems that some patent officials are not literate in technical matters, borne out by the pleas of "don't send us too much jargon" recently heard from the patent office. Where I used to work there were allways people scrabbling around trying to find "prior art" on spurious patent applications by a particularly patent happy competitor who used patents more as a weapon to limit the capabilities of competitors than to protect their own ideas. It seems that the US patent office are doing something about such activity- by introducting a charging structure that is the inverse of a bulk discount. They are also hiring more staff from different backgrounds so hopefully more patents on obvious concepts will be refused. The other thing to hope for is that they will accept prior art from outside the USA!

    3. Re:Christ.... by Alsee · · Score: 5, Informative

      Make sure to get the facts

      Errr, no.

      Those are the claims made by one side.

      E-bay claims Woolston came to them trying to sell his patents. They claim the relevant patent claims were added in a revision long after the original filing date - after E-Bay was up and running which would the patent invalid. E-Bay also claims to have found prior art which would also render the patent invalid.

      If you want facts, Woolston has also sued Priceline over a different patent (yet to be resolved), and GoTo.com over YET ANOTHER patent (settled out of court).

      This guy is making a career of filing patent suits. He has yet to actually win a case.

      Even if he did win, many people think this entire class of patents should never be granted in the first place.

      -

      --
      - - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
  3. Old news by ma++i+ude · · Score: 5, Informative
    This was already reported about three weeks ago here.

    Interesting none the less.

    --
    You can't shut us down! The Internet is about the free exchange and sale of other people's ideas!
  4. "Consignment nodes" by N+Monkey · · Score: 5, Informative

    I just did a quick search on the USPTO and there are indeed a patent listed for "Woolston" (who was named as the inventor in the article). For those interested, the page is
    Patent 5,845,265 - Consigment Nodes. It was filed back in 1995. I haven't looked at the claims etc.

    While doing the search, I noticed some other auction patents, such as one titled "Distributed Live Auction" that is assigned to Amazon.

    1. Re: "Consignment nodes" by Freezebot · · Score: 5, Informative

      Here is the patent abstract (take a deeeep breath):

      Consignment nodes

      Abstract
      A method and apparatus for creating a computerized market for used and collectible goods by use of a plurality of low cost posting terminals and a market maker computer in a legal framework that establishes a bailee relationship and consignment contract with a purchaser of a good at the market maker computer that allows the purchaser to change the price of the good once the purchaser has purchased the good thereby to allow the purchaser to speculate on the price of collectibles in an electronic market for used goods while assuring the safe and trusted physical possession of a good with a vetted bailee.

      Wow!

      This is an LONG sentence...

    2. Re: "Consignment nodes" by JWW · · Score: 5, Insightful

      That could have been said simpler:

      I'm going to do an auction and use the computer for bidding and exchanging the money between the seller and buyer.

      Dammit, BUSINESS METHODS THAT CAN BE MOVED TO THE COMPUTER SHOULD NOT BE PATENTABLE!!!

    3. Re: "Consignment nodes" by Anonymous Coward · · Score: 3, Insightful

      And that's where the suit falls down, e-bay is not the bailee of the articles. It never takes possession during the auction.

    4. Re: "Consignment nodes" by Cramer · · Score: 3, Insightful

      I read that patent application last time it was posted... it's still just as invalid. Let's look at the abstract alone:

      allows the purchaser to change the price of the good once the purchaser has purchased the good No auction in the world works that way. You haven't purchased the good(s) until a price has been set (read: the end of the auction.) At that point, the price isn't open for debate. (So, this nut doesn't even know how auctions work.)

      low cost posting terminals Define "low cost" and "posting terminal". I've used eBay from extremely expensive computers.

      Plus, patent filings are not public knowledge, so, exactly how is eBay supposed to have "stolen" his technology when eBay didn't even know who this guy was until a year ago? It's called parallel discovery -- both independantly came up with similar ideas. eBay has made a very successful business from it; Woolston obviously hasn't and never will.

  5. I know reading the article is bad but... by Tsuzuki · · Score: 5, Informative

    it's about a guy called Tom Woolston, not Bill Simon. The latter happens to be the subject of an apparently related headline, where Bill Simon is being sued by eBay and not the reverse.

  6. And for my next patent... by geordie · · Score: 5, Funny

    I'm going for the patent rights on the use of black typeface on a white background for the purpose of displaying details of and discussing stupid patents

  7. How can anyone stand up and say... by junklight · · Score: 5, Insightful

    that this patent system is fair or protects anyone?

    The person who holds the patents - even if they are valid - did not do the difficult thing which is set up a successful company around the idea. If he had been trying to run an auction company and had been driven out of business or was being threatened by ebay then maybe he would have a gripe. But ALL this guy has done is have a fairly obvious idea (lets face it - letting people sell stuff to one another is not that new - car boot sale patents anyone?).

    The patent office should take a long hard look at what it is trying to achieve.

    1. Re:How can anyone stand up and say... by Sirch · · Score: 3, Insightful
      The person who holds the patents - even if they are valid - did not do the difficult thing which is set up a successful company around the idea

      Most of the time, the applicant doesn't have the resources, either technical or financial, to build up a successful company around one patent. Most patents are issued to people who have filed them for things they have invented whilst researching and developing for a parent company, which then has the resources to back the project.
      ALL this guy has done is have a fairly obvious idea
      Everything is obvious once it's been done, isn't it? The best inventions are the simplest, and their genius shines through by way of seeming an "obvious solution". But they aren't - it needs someone to actually think laterally around the subject, or to have a flash of inspiration to solve a problem in such a way. My favorite examples of this sort of thinking are a matchbox manufacturer who cut costs spectacularly by putting a striking surface on only one side of the box (when there had been two previously), and British Airlines saving thousands by way of halving the number of olives in their Martinis.

      I'd love to be able to come up with these ideas myself - the guy who invented TetraPaks has made a fortune for himself and his family - but, sadly, it takes a true flash of inspiration and creativity. By no means am I taking sides in this eBay thing - I haven't looked into it deeply enough...
      --
      We Build Beautiful Websites
    2. Re:How can anyone stand up and say... by swb · · Score: 3, Insightful

      The person who holds the patents - even if they are valid - did not do the difficult thing which is set up a successful company around the idea.

      The natural argument that occurs to me is that I may come up with lots of ideas that would be highly impractical to start a company and sell. Let's say for laughs that I design a new CPU or a new airplane. I could spend the next 20 years just trying to figure out how to get a fab built or a production line running and never actually make & sell the gizmo that I designed.

      However, the design is impractical for me to build, not impractical for Intel or Boeing to build. So instead of me forming a successful business around making my design, I license my patents to someone who really can make and market my designs.

      I see your point, though, and would argue that perhaps patents shouldn't be licensable, only sellable and only enforcable by the owner of the patent IF they are actually using the idea in their trade after some grace period of for "development of trade", ie the time between desinging the thing and actually getting it to market.

      So if I come up with a great new CPU design and patent it, I have some grace period where I get enforcement of the design without having to market my CPU. I can either start making CPUs or sell the patent outright. Whoever I sell it to has to start making my design or they can't enforce the patent.

      This would clear some egregious uses of patents; the supression of innovative designs and the profiteering of patent holders who don't actually contribute anything to the economy. Wouldn't affect patenting of obvious designs (eg, 1-click) but it could really help software patents, since you'd actually have to be *making* software that did something, not just blocking someone else from doing so.

    3. Re:How can anyone stand up and say... by the+bluebrain · · Score: 3, Insightful
      • My favorite examples of this sort of thinking are a matchbox manufacturer who cut costs spectacularly by putting a striking surface on only one side of the box (when there had been two previously), and British Airlines saving thousands by way of halving the number of olives in their Martinis.
      ... or Subaru saving tens of thousands by not quite topping up the engine oil in new cars by 1/2 litre.

      I'm quite glad *such* things can't be patented, at least: cutting costs by cutting corners. Great business idea, but the innovative thing about them is that they wouldn't occur to a product designer simply trying to make a good and usable product, because they don't make design sense. Hooray for "good value", but I wouldn't call it revolutionary.

      As for this case: non-obvious *to whom* is always a question. Another important question is how hard something is. Examples:
      • A McPhearson shock absorber: ingenious (IMHO), hard to get right, needed a lot of R&D
      • Any rocket engine or similar: check out things like SCRAM jets. No moving parts (apart from the fuel pump), but engineering magic nonetheless. Needs a lot of R&D
      • ... and so on
      Compare stuff like this with web auctions, and they fade into "oh, like taking part in an auction over the phone, yea?" ... to which the answer is "uh, yes". And when you take part in an auction by phone, you can, for instance, tell your (human) agent to increment your bid in small steps, to win, up to a certain limit. Or only to bid during the last 30 seconds. And so on, ad absurdum.

      Naturally, you can equally tell any hypothetical computer agent the same thing, if the agent is programmed to accept such commands.

      Maybe the last bit is only obvious to typical /.ers, i.e. techies, but my point is that there is no research, there is no development, there is hardly even any inspiration: in the example above, imagine some dude taking part in an auction by phone 50 years ago. Any "innovation" claimed by an "inventor" of web auctions could be, would be, and has been "researched" and "developped" by the dude 50 years ago while he was talking on the phone. And by all the other dudes & dudettes, thousands of times over - and yet it is patentable. *That* is what bugs me.

      If and when you happen to re-invent something (as in the case of the original article, as far as I understand) that has already been patented by someone else, there is no "onus of proof", neither on yourself, nor on the patenter. Even if you *did* invent whatever it is from base up, it's already patented, and you must enter negotiations for a license to use it, the cost of which may by prohibitive to your undertaking.
      Fine, in that case you're just SOL; better luck next time. The fact that the patenter may not be using the patent (i.e. producing something based thereupon) is just secondary bummer.

      But where it gets really buggy is when you, as an inventor, are severly encumbered by a minefield of trivialities. "Hey, we could do auctions over SMS" ("short message system" - big in Yurp, not so much in the US) ... uh-oh ... has it been "patented" yet?

      Anyway - I'm in rant mode. To the last I can only paraphrase The Matrix: "There is nothing to patent."
      --
      yes, we have no bananas
  8. Duplicate! by Anonymous Coward · · Score: 3, Informative
    Why did this immediately spring to mind.

    For the lazy, news.com originally reported the story early September:

    eBay, one of the biggest success stories on the Web, is being threatened with a patent infringement lawsuit that could force it to modify its winning auction format.

    A loss could compel the Internet auction company to pay millions of dollars inroyalties and damages and even to make significant changes to its business model.

    MercExchange founder Thomas Woolston, an inventor and patent attorney who has been granted four online auction-related patents since 1998 and has some 10 others pending, said he sued eBay in 2001 after negotiations broke down over the auction site's offer to purchase his patents.

    ...

  9. Why can you patent an age old concept? by MikeFM · · Score: 5, Insightful

    Auctions have been around for 1000's of years in some form or another. How can anyone claim to own the idea? I certainly remember online auctions before EBay was even a pipe dream and even before the web came into being. Taking a common idea and slapping 'online', 'electronic', 'web', etc on it does not make it a new idea. Spreadsheets were a new idea.. there really is no real world equivilant.. but online auctions are obvious.

    I'm all for screwing the big corporations but get with the show and invent something real and stop trying to get rich off pantenting the obvious.

    --
    At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
    1. Re:Why can you patent an age old concept? by chthon · · Score: 4, Interesting

      FWIW, electronic spreadsheets where created from paper spreadsheets, a technique which is used in theoretical mechanics to compute resulting vectors in space.

      If you lookup the story about spreadsheets from Dan Bricklin, you will find that they really started from this concept.

      With computers, you can automate many things which where previously cumbersome.

      However, with computers you can do things that are impossible in reality : magic, anti-gravity, maybe we should go for patents on these because we can implement them on a computer...

    2. Re:Why can you patent an age old concept? by Mac+Degger · · Score: 3, Informative

      It's actually older than that...spreadsheets were used to figure out the movement of the stars for navigantional purposes in the 16 centurie...god knows when the first use was, though.

      --
      -- Waht? Tehr's a preveiw buottn?
  10. Ummmm... copy editors? Fact checkers? by Megahurts · · Score: 4, Interesting

    The article never mentions anyone named Bill Simon. Given that a man by the same name is running for Governor of California and is constantly protrayed by his opponent as a scandalous and shady businessman, the crew of slashdot might just want to be a little more careful about what they allow on the front page. Libel tends to be expensive.

  11. We really need an open patent "office" by fluor2 · · Score: 5, Interesting

    Somebody please try open a open-"sourced" patent office! As we all know, patents cannot be claimed if they allready exist in some sort of written format. So we need a forum where we can post all kinds of ideas, and then claim we own them if somebody try patent them.

  12. Recursion is your friend by HiQ · · Score: 5, Funny

    Maybe he can put his patent up for auction on eBay...

  13. Too much! by tanveer1979 · · Score: 3, Insightful
    I know I know, many people are right now saying this is bull shit and all.
    I decided to come with a short list on what had happened if 50 years or 100 years before such stupid patents had been accepted, note that what is stupid today may not have been stupid 50 years before, so its kinda contexted to that era. lets start

    • Flying... Yea man dosent fly, if somebody can then its very much patentable, infact much more patentable than swinging sideways in a swing.
    • Using fire for locomotion... think in that era it was actually an achievment
    • Using non matter to transmit information, ie radio waves instead of paper
    Scary huh, these are a few examples. By having thse stupid patents all we are doing is creating a ditch for the future generations. Ever wonder why all researchers and scientists prefer europe to amer.?..
    --
    My Aurora : http://www.youtube.com/watch?v=o91ZsGwJYyg
    FB : https://www.facebook.com/TanveersPhotography
  14. Novelty by Drownedrat · · Score: 5, Insightful
    I may be mistaken but I believed one of the conditions on granting a patent is novelty.

    There seems to be a lot of patents being issued for an old idea in a new medium.

    An online auction is still an auction. Putting a picture, or a song on a computer doesn't stop it being a picture or a song.

    Patents of this kind are purely money grabbing schemes, often by people who have spotted the new medium & have no plan to exploit the idea, just rip off those who do.

    It's basically a different type of domain squatting. (Wonder if I could patent it as such...)

    D.

  15. Sort it out Timothy by OrangeSpyderMan · · Score: 5, Insightful

    Come on - get it together. Of the handful of stories you've just put up, some are reposts, some are badly written, some are untrue (cf. Bill Simon). What is wrong with you? Can't you or don't you read the stories before you publish? Don't you read the links the story includes, or check that the story isn't already up? I can understand you not doing it for all the stories that are submitted, but please at least do it for those you chose to publish.

    This could be useful to help you decide if you really are an editor or not.

    --
    Try NetBSD... safe,straightforward,useful.
  16. More about Simon by Spunk · · Score: 5, Informative

    Bill Simon is running for Governor of California and created this clever parody site about his opponent, incumbent Gray Davis. Ebay is not too pleased.

  17. Now you'll see patent reform.. by i_want_you_to_throw_ · · Score: 5, Funny

    Now that someone big enough to pay off congressmen is getting picked on.

    Damn shame it's not Amazon.

  18. Purpose of patents by sjoperkin · · Score: 5, Informative

    A patent is, first of all, not even a constitutional right. The constitution says that congress may provide inventors with certain rights to their invention. This lead Jefferson et. al to set up the first patent board some 200 years ago.
    Now, for a patent to be granted, the invention it describes must be:

    New

    Useful

    Nonobvious

    For a good definition of new, see new

    The useful property is questionable, but the nonobvious is very interesting, see nonobvius

    A quote from this link:

    It was never the object of patent laws to grant a monopoly for every trifling device, every shadow of a shade of an
    idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of
    manufactures. Such an indiscriminate creation of exclusive privileges tends rather to obstruct than to stimulate
    invention.

    And that kind of sums it up...

    Another purpose of the patent idea, combined with licensing, was to open up trade secrets. Let the rest of the world know how we do it, so that all may benefit. But, if you want to use it, you need to license it.

    Again, a good idea spoiled by insane capitalism.

    Don't get me wrong, I'm a genuine capitalist, but it is scary to see what happens when capitalism goes berserk.

  19. Ebay gets what they deserve by Anonymous Coward · · Score: 3, Interesting

    Anybody that doesn't think Ebay would be suing this guy if the tables were turned is a bit naive. Why do you think they applied for their own patents in the first place?

    These dot-coms have done an incredible amount of damage to the IP system by patenting bogus business methods. Amazon, Priceline, etc. Nobody cared when it was just little guys getting the brunt of these archiac laws, but now that a popular company is getting hurt it just might get some attention.

    Anyone against software/business method patents should be rooting for the injunction. Imagine seeing the Ebay site closed!

  20. Re:This can only speed up the collapse of patents by nagora · · Score: 4, Insightful
    Does anybody really believe that in, say, 20 years time, patents will still exist?

    Given that the whole of US copyright has been distorted just in order to protect Mickey Mouse, I'm not optimistic that patent law will be reformed in this century.

    TWW

    --
    "Encyclopedia" is to "Wikipedia" what "Library" is to "Some people at a bus stop"
  21. This guy's patents are bunk by Eagle7 · · Score: 5, Insightful

    If you go here: http://mercexchange.com/invintprop.html

    and check out this guy's company's site... the patents are bunk. He has patents for agents that search multiple auctions and marketplaces, he has a patent for routing packets based on hierarchical information in it's headers. This is stuff that 1) has very obvious analogs in meat-space, and is therefore no more of a leap than ecommerce is a leap from mail-order commerce, or 2) are things that any software developer worth his or her salt would come up with in the course of solving a problem involving, say, routing packets. This guy isn't and inventor - he's a patent lawyer who finds little obvious holes in the current canvas of patented technologies, and grabs the patents with the hopes of licensing them. I'm unimpressed.

    --
    _sig_ is away
  22. "addendums" to patents by Quixote · · Score: 3, Informative
    Patenting obvious stuff is bad enough; what bothers me is the fact that people can "add" stuff to their original patent applications. This guy seems to have done that, maybe after Ebay took off.

    Old hands will recall that RAMBUS used to do that too, and got nailed by that.

    The sad part about this story is that the company (EBay) will realise that its not worth their time to fight this, and just settle out of court for a couple of million bucks; a trivial amount to them, but a non-trivial amount to the likes of Mr. Woolston, who will continue to indulge in such "submarine patenting".

  23. He's a nutcase by Quadriceps · · Score: 3, Interesting
    Just because they've been talking to him for a while doesn't mean he's not a nut. His demands may be unreasonable. Looking at his website, he would seem to be the worst kind of patent abuser: one with the legal patent knowledge to exploit obvious applications with the intent of holding them hostage once the people with the guts to actually risk capital unknowingly tread on them.

    His next target will be force feedback joysticks--on his website is listed Patent No. 6,162,123: An electro-mechanical device for providing an input to a computer program and said computer program providing a tactile output through said electromechanical device to a user. More specifically, the present invention provides an electro-mechanical virtual sword game apparatus that receives positional information from sensors on the sword apparatus and the sword apparatus contains a propulsion gyrostat that under the control of a computer process may be toppled to provide a torque on the housing of the sword apparatus that may be used to simulate the impact of sword blows.

    And I wouldn't count on patent reform any time soon. The economic world is a food chain, with law firms at the top. In this case the industry of patent law would have a lot to lose. Our legislators (who are bought and sold every day) will consider that first, though of course the fact that they are mostly lawyers themselves won't in the slightest way affect their judgement...

  24. Re:Why not? by FreeUser · · Score: 4, Insightful

    What reason can you offer to distinguish methods that can be moved to the computer from those that cannot be moved to the computer?

    The original poster can't, and shouldn't. He could have spared some verbiage and made the much more accurate statement:

    "Dammit, BUSINESS METHODS SHOULD NOT BE PATENTABLE. " Period. The same goes for mathematical algorithms, conceptual ideas (which are supposed to be unpatentable in theory but for which patents are regularly granted), or even any specific idea or design which the patenting party has not built themselves first. No more patenting a matter-antimatter motor unless you've built and operated the damn thing first.

    --
    The Future of Human Evolution: Autonomy