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Patent Cases Hurting Small Businesses

smudge writes "An Information Week article states that multiple small businesses with Web presence are being sued by PanIP LLC. The claims in these patents being asserted in the lawsuits refer to 'a computerized system for selecting and ordering a variety of information, goods and services' and 'an automatic data-processing system for processing business and financial transactions between entities from remote sites.'"

39 of 320 comments (clear)

  1. Vague? by Manhigh · · Score: 5, Insightful

    I'd think any patent that uses phrases like "a variety of" is too vague.

    --
    "Open the pod by doors, Hal" > "I'm afraid I can't do that, Dave" sudo "Open the pod bay doors, Hal" > alright
    1. Re:Vague? by g4dget · · Score: 5, Funny

      Obviously, they didn't have a good patent attorney. Good patent attorneys know that they should say "a plurality of"--it makes the patent sound more serious.

    2. Re:Vague? by krazyninja · · Score: 4, Interesting

      Actually, there are many patents out there which extend their claims this way. And having come across several patent lawyers myself, it looks like its standard procedure. All patents end with phrases like "experts well versed in this field would know that this invention is not limited to (whatever the patent mentions) but also to related fields". I am forced to believe it now :(
      I have a list of such patents here

      --
      "Do something man. Right now."
  2. Vending machines... by thenextpresident · · Score: 4, Insightful

    "The patents, No. 5,576,951 and No. 6,289,319, cover, respectively, an "automated sales and services system," and an "automatic business and financial transaction-processing system."

    Vending machines anyone?

    --
    Jason Lotito
    1. Re:Vending machines... by cei · · Score: 4, Interesting

      Sorry. The same guy patented computerized vending machines too, back in 1986...

      --
      This sig intentionally left justified.
  3. Okay - this is getting stupid by raydobbs · · Score: 4, Insightful

    Patent abuse should really be punishable. I mean, patents were made to stifle innovation, they were made to promote it. Now we've got every tom-dick-and-harry patenting blatently prior art things, or just commonplace market things, and attempting to sue people out of existance.

    Let's just make it that if you patent something that is reviewed, and sounds like a dug-headslap type thing - you get a toenail pulled out with a pair of pliers. On severe cases - just bring back public stoning (no, not drug induced bliss - bludgeoned to h*ll with big fu***** rocks) for the offending numbskull, and his/her lawyer.

    1. Re:Okay - this is getting stupid by Soko · · Score: 5, Funny

      Let's just make it that if you patent something that is reviewed, and sounds like a dug-headslap type thing - you get a toenail pulled out with a pair of pliers. On severe cases - just bring back public stoning (no, not drug induced bliss - bludgeoned to h*ll with big fu***** rocks) for the offending numbskull, and his/her lawyer.

      Sorry, but I already have a patent pending on this exact method. You'll hear from my solicitor in the morning (never liked him anyway). :P

      Soko

      --
      "Depression is merely anger without enthusiasm." - Anonymous
    2. Re:Okay - this is getting stupid by Raw+Ostrich · · Score: 5, Insightful

      There is a bright side to this. When it comes to immaterial rights, thigs need to get worse before they get better. The inertia of the status quo has to be overcome by unbearable stupidity and cost of the current legislation. I would urge everyone to seek patents whenever possible, as broad as possible and as harmfull to development as possible. Lets get it over with and move on...

    3. Re:Okay - this is getting stupid by nemesisj · · Score: 5, Interesting

      I've got a friend who has a friend that works in the USPO and he was telling me how ridiculous it is to work there. Basically, you're supposed to nail predatory patents like these obviously are, but this guy who works there gets creamed by his boss whenever he tries to deny a patent. His boss is involved in all sorts of payoffs and dirt - I literally couldn't believe the stories he was telling. He later got put on a committee that was trying to track fraud and they figured out that some really high percentage (don't remember exactly, but it was over half) of the patents are frivolous and completely bunk. One tactic lots of patent filers like to use is to send in a 25 page document, and the first 24 pages are garbage designed to lull the reviewer to sleep, then they slip in a couple of paragraphs that involve what they're really trying to patent at the end. So to sum things up, its his opinion that the whole system is completely out of control, which is too bad, and he also thinks its so broken it can't be fixed, which is where things REALLY begin to suck.

    4. Re:Okay - this is getting stupid by mOdQuArK! · · Score: 5, Interesting
      His boss is involved in all sorts of payoffs and dirt - I literally couldn't believe the stories he was telling.

      I wouldn't be surprised - our (very small) company has been fighting a huge company over the violation of one of our patents, and they're using the strategy of delaying the reviews of our patent so that we can't go to court (and they are hoping that our little company will eventually die).

      We've fought off their challenges to our patent FOUR times (now going on a fifth reexamination), taking over 4 years now. Each time, the primary examiner has revalidated our patent - and then his boss overrides his conclusion & throws our patent out (the same boss each time), usually without a reason.

      Needless to say, we've got some questions about the motivations of the patent examiner's supervisor - but there isn't anything we can prove, and due to the rules of the Patent Office, we can't get anyone else to look at the case.

  4. don't re-invent the wheel...PATENT it by babylon93 · · Score: 5, Insightful

    Too bad these people seem so be trying to get their money from suing others rather than perfecting the magic of E-commerce, which they basically claim to have invented.

  5. deja vu by outlier · · Score: 5, Informative
    PanIP has been mentioned in slashdot before.



    It seems that the disease that is PanIP has been spreading...

  6. Is that so? by neksys · · Score: 5, Insightful
    In that case, I'd like to assert my own patent on 'a physical system for selecting and obtaining a variety of goods and services' and 'a electronically assisted, human-run data-processing system for processing business and financial transactions between entities at a physical location.'"

    Namely - any store or business with a cashier.

  7. patent patents? by technoid_ · · Score: 5, Funny

    Some one needs to phrase the job of the US Patent office really vaguly and then get a patent on it. Then sue the patent office for patent infringement.

    hmmm, wonder if i could make this into a business plan and get some VC behind me...

    --
    Two wrongs don't make a right, but 3 lefts do - Lew of GO magazine
  8. is it just me or.... by the_2nd_coming · · Score: 4, Insightful

    is 1996 seem a little to recent to have a good claim for a patent? now if it had been around 1990 then sure I could see how they think they have a good patent, but 1996!!! my god....businesses were doing web sales for a few years before these yokels said "hey that sales system is not patented..."

    --



    I am the Alpha and the Omega-3
    1. Re:is it just me or.... by zurab · · Score: 5, Interesting

      businesses were doing web sales for a few years before these yokels said "hey that sales system is not patented..."

      Even the article states:

      DeBrand, literally a mom-and-pop shop in Fort Wayne, Ind., has been selling its homemade chocolates over the Web "practically from the beginning, probably seven, maybe eight years...

      and several paragraphs later:

      The patents PanIP bases its lawsuits on were granted-the first in 1996...

      This makes no sense. The shop has been selling stuff online since 1994-95. USPTO, with its head buried in the dumpster, approves and hands the patent to PanIP in 1996 on the obvious prior art stuff that had been going on by thousands of companies/individuals for years before. PanIP turns around and sues small companies that can't afford to defend against patent infringement and would probably rather pay $5k.

      Note the following:

      1. To PanIP: the company that you are suing has prior art to your patent if your accusation is correct that they are infringing in the first place. They have been in business longer and actually *doing* what you patented couple of years later.

      2. I hope the judge sees (a) the obviousness and numerous prior art of the patents, (b) the ill intent of PanIP, LLC, (c) the frivolous and wrongful lawsuit brought by PanIP, and dismisses the lawsuit, awards legal expenses plus punitive damanges to the defendants, and orders to close down PanIP, LLC, put all its patents in public domain, and orders its founders/owners and laywers to spend 3 months in community service and 9 months living with GNU/RMS at their own expense!

      3. USPTO will approve any patent claim that contains the word "apparatus". It seems like this is one of the qualifying criteria for approval. I can probably get an approval for a patent for an "apparatus that hammers the nails in the wood", or an "apparatus that can roll in a circular motion on any surface". Hey! why not - check out the infamous method of swinging on a swing granted on April9, 2002?

      4. This has got to stop! Write to your local corporate representatives in DC and tell them this is devastating for local small and medium size business!

      5. USPTO database and website should be turned into a comedy and satire website and public entertainment source (Ok... done already), but remove most of their entries' legal implications. On a side note, when you are bored and have nothing to do try searching patents on your favorite activity. How about a tub for bathing granted on June 25, 2002 solely from the drawings?

  9. Vague and foolish by Facekhan · · Score: 5, Interesting

    Can you imagine if this lawyering tactic and blatant abuse of an overburdened patent office had taken place 150 years ago. I could patent things like "a way to use electricity for an artificial light source" and then I could have sued Edison or perhaps I could have patented "a method of towing freight along metal rails" and the railroad and locomotives would have been sued into non-existence. Its insane.

  10. To file a Patent Protest... by thenextpresident · · Score: 5, Informative

    Please file a protest for patents 6,289,319 and 5,576,951

    "1901.01 Who Can Protest
    Any member of the public, including private persons, corporate entities, and government agencies, may file a protest under 37 CFR 1.291. A protest may be filed by an attorney or other representative on behalf of an unnamed principal since 37 CFR 1.291 does not require that the principal be identified."
    http://www.uspto.gov/web/offices/pac /mpep/document s/0841.htm#sect1901.01

    --
    Jason Lotito
  11. The whole legal system needs to be changed by SexyKellyOsbourne · · Score: 5, Insightful

    In the United States, people currently can sue each other for any reason and any thing, and usually win, thanks to the corrupting influence of trial lawyers in Washington, DC.

    There is hope, however; tort reform is taking storm in many states, and it's preventing such frivolous lawsuits from taking place.

    If you don't want these small businesses to be persecuted, then drop the keyboard and write your state and federal Congressmen by snail-mail and demand that he or she fight in the Capitol for real, meaningful tort reform.

    Don't wait until tomorrow -- do it now!

    1. Re:The whole legal system needs to be changed by jeffy124 · · Score: 5, Insightful

      The problem centers around "nothing to lose" cases, where the plantiff has nothing to lose by losing the lawsuit.

      In many countries (US is not one of them), if you sue someone and lose (or get caught under perjury or something), you must pay for the defendant's legal fees, and get opened up to counter-suits from the defendant. In the US, unfortunately, the plantiff can just walk away from a lost suit as if nothing happened, despite how much work (and money) a defendant can put in to defend himself. This is especially true for lawyers that hire themselves out on contingency.

      --
      The One Rule Of Chess You'll Ever Need: Don't play someone who carries a kit in their bookbag.
    2. Re:The whole legal system needs to be changed by Billly+Gates · · Score: 5, Insightful

      Tourt reform is sponsored by the mega corps to reduce consumers right to sue. ITs all about profit for them. At least that is Bush's version of it. Polluters love tourt reform since its expensive to prove that the pollants they discharge cause damage and to prove it would cost tens of millions of dollars. Insurance companies also love it because they can charge the same price for insurance and rake in more profits.

    3. Re:The whole legal system needs to be changed by broken_bones · · Score: 5, Insightful

      The idea of "nothing to lose lawsuits" is a double edged sword. On one hand if these suits are allowed then you have to worry about the possibility of having to defend against one. On the other hand if a losing plaintiff is liable for the legal fees of the defendant it provides a severe advantage to large corporations. No little guy in his right mind would ever sue a megacorporation if he had to pay said megacorporations legal fees in the event of a loss. Losing without incurring that liability is already a very expensive proposition.

      Personally I think the key to tort reform is to remove the profit insentive to lawsuits by diverting punative damages to education. This would mean that if you sue Huge-Mega-Corp for something and win you would collect actual damages (ie restitution, money to compensate you for what you actually lost/suffered). Any punative damages (punishment, the bazillion dollar sums that are supposed to say "don't do that again") awarded would go to an education trust used to buy books, computers, college scolarships etc. for your state.*

      *This is the first time I have ever floated this idea to anyone. If you see holes in it please respond so I can avoid looking like an idiot in the future.

      --

      Never disturb your enemy while he is busy making a mistake.
    4. Re:The whole legal system needs to be changed by cybermage · · Score: 5, Insightful

      Personally I think the key to tort reform is to remove the profit insentive to lawsuits by diverting punative damages to education.

      A few of problems with that:

      First, as I see it, the truely disenfranchised (i.e., flat broke) victims of Huge-Mega-Corp's actions would not be able to attract lawyers willing to sue on purely contingency basis; and the lawyers who do so would be taking their cut out of the actual damages.

      Second, the flow of cash into an education fund like you describe would likely create a government agency to administer it. Give the government a source of money to play with and two things will happen: Much will be allocated as pork, and revenue will be sought to maintain the pork programs when the fund runs low.

      Third, restricting the punative damages to a single geographic area, if small enough, may give the tax payers who make up the jury a bias toward the plaintiff as it may reduce their school taxes.

      Instead, what might be better, would be a statuatory compensation rate for lawyers who are granted punative judgements (say 10%, up to $500/hour.) The jury could then allocate the balance of the punative judgement to government (local, state, or federal) and/or 501c3 charitable institutions suggested by the plaintiff(s). Obviously, the plaintiff's list would be submitted only after the jury reaches a verdict and determines the amount of the penalty.

    5. Re:The whole legal system needs to be changed by canadian_right · · Score: 5, Informative
      The loser should pay the winners legal fees to prevent abuse. It works great in Canada. We also have caps on punative damages. This means there NEVER billion dollar awards for pain and suffering. You can get back whatever is required to make up whtever loss your are suing for, plus reasonable damages (the cap is around $100,000). These two simple rules make silly lawsuits very rare up her in the Great White North.

      This in no way stops the little guy from suing - when he is in the right. It makes it easier because when he wins he has NO LEGAL BILLS to worry about. Of course, if you are sure you are going to win you think twice about starting, but that is a GOOD thing.

      Big coprs still try SLAPP suits, but many jurisdictions have anti-SLAPP legislation. All in all, this system works very well, not just in Canada, but in many countires whose law is based on English Common Law.

      --
      Anarchists never rule
  12. Granted != Applied by Gerry+Gleason · · Score: 4, Interesting
    The patent office takes a while to actually grant a patent (not that I know how long this is, but probably several years).

    It boggles the mind to think about what kind of qualification process would keep letting through all sorts of patents that any semi-competent engineer would recognize as obvious and/or prior art. Maybe it is just easier to rubber stamp the applications so they can get to the bar early.

  13. That's it. Call your Uncle Tony... by certron · · Score: 5, Funny

    OK, Amazon.com, Buy.com, bn.com, and anyone else who wants in should set up a fund to hire someone to club the kneecaps of everyone involved in this stupid, stupid lawsuit. My usual style would be to hit them in the face with a frying pan, since it is almost impossible to misinterperet that action as anything other than sheer and utter revulsion and hate, but sometimes the frying pan just doesn't do the job.

    I mean, seriously. This is one of those 'just when you had accepted the fact that things couldn't get any more stupid or pointless, you were harshly proven wrong' things. I'm going to patent candy and beachballs and start collecting royalty payments from kids, those pathological users of unlicensed intellectual property... (No, don't even try and apply logic to that one. Trust me, don't.)

    I'm ready to put in $20 for the hitman. Who is with me? Hey, it worked for the blender source code.

    (OK, I'm not an evil person. I really just wish they would drop the lawsuits and grow a spine and some clue. That would be far preferable to having to spend money on a hitman. I mean, uh, I hope nothing bad happens to them. But I'll probably smirk if something does. No, wait... If the police ask, I had nothing to do with it. Yeah, that's the ticket...)

    --

    fair.org counterpunch.com truthout.com indymedia.org salon.com
    eff.org guerrilla.net debian.org gentoo.org
  14. How does he make a living? "I enforce my patents" by sssmashy · · Score: 5, Interesting
    PanIP's principal owner, Lawrence Lockwood, previously had filed suit against American Airlines in 1994, charging that the company's online reservation system infringed on other patents he holds. Lockwood lost that lawsuit, which went all the way to the U.S. Supreme Court

    This Lockwood guy sounds like a real pro. He's been at it for at least 10 years. He sniffs out broad new technological trends in business - the kind of thing you might read about in a Forbes article - and then cynically abuses the weakness of US Patent Law by patenting a vague expression of that trend. He never intends to produce anything with his "ideas"... he just slinks into his hole and waits for the real innovators to come along so he can extort money from them.

    He's going to lose any court case--that's almost a given--but in the meantime he's hoping that enough of his small, carefully picked victims cave in and throw him $30k, or at least a few grand to make him disappear.

    The key to wiping the smirk off his face is to make sure no more of his victims cave. Sure, lawyers aren't cheap, but the 30 companies have to realize that there is no way they can lose this disgusting and frivolous lawsuit, especially if they work together.

  15. Re:Why not just take out a patent on ..... by Soko · · Score: 5, Funny

    A system for the disabling of logical, rational thought; a system that creates random decisions and has no method of control or accountability?

    Sorry. I really don't think you can patent the U.S. Patent Office itself.

    Soko

    --
    "Depression is merely anger without enthusiasm." - Anonymous
  16. Re:The patent office has looked stupid for years by D+iz+a+n+k+Meister · · Score: 5, Funny

    I was talking to a friend about a more libertarian or maybe even anarchistic legal system . . .I think there really is a constructive role for government to play, if only they were effective and actually represented the people. . .I forget the technical legal term. . . and he was telling me about an example (which I also forgot).

    Yeah, I like smoking weed with my friends too.

    --

    He painted a unicorn in outer space. I'm askin' ya, what's it breathin'?
  17. Well, kind of. by ubernostrum · · Score: 4, Informative
    A good friend of mine's dad works at the USPTO as a patent examiner...he's a very intelligent, well-read and well-rounded engineer. Unfortunately, due to budget constraints, when all the guys like him retire (and there arent many left even now), that's the end; they can get three or four cheap idiots fresh out of college with no experience for the salary a qualified examiner can command, and that's common practice for replacing an examiner.

    So please don't put all the blame on the patent examiners; while there are plenty of idiot examiners, a lot of this also has to do with bureaucracy's normal functioning: higher-ups trying to cut corners and save a buck.

  18. Re:Vague? - nah, just lame by wanton · · Score: 4, Informative

    Actually, I checked out the patents, they do use the word plurality, however :) ...

    They're retarded. Both require that the 'textual' and 'graphical' content of the site be from a 'CD-ROM' or 'optical device'. I know of very few sites that do this. Additionally, the first patent defines that the device which essentially serves contents require a device for displaying graphical content. I guess the patent doesn't take into affect that some people host their shiznit on boxes without a monitor.

    So, fear not the whores.
    (I hope the lawsuits backfire on that blasted company)

  19. PanIP targeting companies not in California? by richard-parker · · Score: 5, Insightful

    The PanIP Defendants web site mentioned in the article has a list of the 50 companies that have so far been sued by PanIP. Interestingly, despite the large number of e-commerce companies in California, none of the defendants are located in California.

    Since the patent holder, PanIP, is located in San Diego the cases are taking place in the U.S. District Court for the Southern District of California. Since all of the companies being targeted are small out-of-state companies they are unlikely to already have an established relationship with an attorney licensed to practice in California. I wonder if PanIP is specifically targeting companies that are not in California, perhaps on the theory that out-of-state companies will be more likely to settle when faced with having to litigate a case far from home?

  20. 25 pages? Amateurs! by pommiekiwifruit · · Score: 4, Interesting

    Biotech companies have been submitting patents of 140,000 pages in length. These may take some time to examine thoroughly.

    1. Re:25 pages? Amateurs! by jdiggans · · Score: 4, Informative

      For biotech patents on genes or proteins the USPTO requires you include a 'sequence listing' describing the sequence of the gene(s) or protein(s) you're patenting. This must be submitted in a very structured format that increases the vertical length of the submitted content by a great deal, especially for long sequences (so I imagine this 140k page application was a small app with a giant sequence listing trying to keep the claims as biologically broad as possible).

      The PTO has finally gotten wise to the act of including everything but the kitchen sink in a patent listing (as was the industry's habit a few years ago) and now charges on a per-page basis for patent submissions. This ensures that if a company files a 140k page patent, they really mean it and are willing to pay for it.

      One of the FEW good ideas out of the USPTO in a long time; let's hope there are others.
      -j

  21. Re:The patent office has looked stupid for years by mcrbids · · Score: 4, Informative

    I forget the technical legal term

    Writ of Mandate. aka Writ of Mandamus A court order to a government agency, including another court, to follow the law by correcting its prior actions or ceasing illegal acts.

    (BTW, IANAL, but more details can be found here in a legal dictionary)

    --
    I have no problem with your religion until you decide it's reason to deprive others of the truth.
  22. prior art by dnight · · Score: 4, Interesting

    I was implementing EDI 15-17 years ago.

  23. Re:Job Requirements for patent office by ProfBooty · · Score: 4, Informative

    there are general divisions for chemical, electrical, mechianical, biotech and business methods. from there, there are breakdowns into specific technologies, such as sporting equipment, telephones, tyres etc, nearly every catergory of invention.

    At least BS is requried, for some techonolgies, more is required for education/job experience.

    the people who work at the PTO probably know far more than you do about a specific technology. The problem is you have to read how the claims are written. The claims define the actual invention. If the law firm does a good search prior to filing a patent, they can word the claims so that the examiner can't find it. Likewise after a non-final rejection, the attorney can ammend the claims to not read on the art the examiner cited.

    "Imagine if people start claiming necessary carpentry skills like 'the process of putting a a variety of small steel spikes in a piece of wood' - that'll cover hammering, screwing, etc. Or 'method of subdividing wood into smaller pieces.' - sawing."

    The article poster only quoted the preamble, not the actual invention, so the slashdot article is misleading. Likewise the passage from the above poster is inaccurate. That is called the preamble and is not the actual invention. The actual invention portion of the claim would likely read something like this:

    1) A method if inserting small steel spikes in a piece of wood, wherein said wood is composed of pine. ETC with more and more detail AFTER the preamble portion

    I'm pretty tired of slashdot people, who are entirely uneducated in the patent process, critizing a process which they don't even fully understand.

    --
    Bring back the old version of slashdot.
  24. Re:The patent office is looking pretty stupid by Zeinfeld · · Score: 4, Interesting
    It seems to me that anything claimed in these patents was nothing more than obvious applications of HTTP technology. Maybe CERN could have patented it all in the beginning, but they made it available to all of us, and some idiot is claiming he owns some piece of that.

    For prior art see the Internet Shopping Network (now part of HSN) which was operating in '94, Also the UK Prestel system which operated in the early 80s.

    I don't doubt that we could have got a patent for HTTP, but it is only a more efficient transport than ftp. There used to be quite a few sites that used ftp to serve HTML.

    This type of extortion should be punished. In the UK you would be hit with a crippling legal bill for the defendant's costs if you lost so there is little point in filing vexatious patents. Also prior review means that the probability of getting a vexatious patent is much lower.

    The problem with the USPTO is that it speaks with a forked tongue. When it is justifying its racket it claims that a patent has to be 'novel', when justifying the actions of its franchisees it claims that their legal definition of 'novel' is 'anything at all, even something completely obvious'.

    Actually cases like these are the ones that might lead to reform. A corrupt senator bought by USPTO franchisees can ignore the complaints from the likes of Microsoft or slashdotters, but it is harder to ignore small business owners. And no, the judgemet against Microsoft on the disk compression patent was not any more justified than the present scam. What was being claimed there was not LZW but the idea of a compressed disk.

    Don't you think Amazon would be well served to help these little guys squash this thing in the first round before it gets any momentum.

    They have their own problems in this area, there are something like 2000 odd patent extortion scams going on and Amazon have their fair share.

    --
    Looking for an Information Security student project suggestion?
    Try http://dotcrimeManifesto.com/
  25. Re:Vague? - nah, just lame by gmack · · Score: 4, Insightful

    Optical device== Camera ?

    So I'm guessing they think the patent covers anyone who took pictures of their product and put them up on their website.