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Online Auction Industry In A State Of Limbo

theodp writes "It seems the online auction industry is in a state of limbo after last week's ruling that eBay violated patents belonging to MercExchange. MercExchange said it will file an injunction against eBay to keep them from using the technology, eBay said it will file motions to overturn the verdict, and MercExchange is ultimately looking to sell its entire portfolio of auction-related patents. Names being bandied about as possible acquirers include Amazon, Yahoo and eBay itself. Whoever holds the patents may require other sites to pay them licensing royalties."

34 of 329 comments (clear)

  1. Intellectual Property for Auctions by Revvy · · Score: 5, Funny

    ...now available to the highest bidder.

    1. Re:Intellectual Property for Auctions by RajivSLK · · Score: 3, Funny

      Why doesn't MercExchange just sell the patents on ebay?

      That's how I get rid of worthless crap I don't want.

    2. Re:Intellectual Property for Auctions by theancient1 · · Score: 3, Insightful

      Intellectual Property for Auctions ...now available to the highest bidder.

      There's a bit of truth to that statement that nobody seems to have noticed yet. Take note of the following statement from the story:

      MercExchange is ultimately looking to sell its entire portfolio of auction-related patents. Names being bandied about as possible acquirers include Amazon, Yahoo and eBay itself.

      Doesn't it seem like MercExchange is using the threat of litigation in order to coerce eBay into purchasing these patents? A week from now, I expect to read the following story: "MercExchange has settled its lawsuit against eBay. eBay will acquire the intellectual property from MercExchange for an undisclosed amount of cash." eBay can then go after Yahoo and Amazon, if they so choose.

      Alternatively, Yahoo or Amazon could purchase the patents, and then go after eBay. We know from past experience that Amazon isn't beyond suing its competitors over trivial patents.

      MercExchange doesn't seem to have a competitive position. Personally, I've never heard of them -- eBay, Yahoo, and Amazon are the big players in the online auction market. Any of these players might be interested in acquiring the MercExchange intellectual property in order to use against the other two.

      As for MercExchange, since they're aiming to sell their patents anyway, they can probably fetch a higher price by using a lawsuit as a bargaining chip.

  2. such is the fate of humanity by Anonymous Coward · · Score: 4, Insightful

    to suffer from selfish individuals bent on thwarting innovation of technologies.

  3. Ya think? by rjamestaylor · · Score: 5, Insightful
    • Whoever holds the patents may require other sites to pay them licensing royalties.
    Going out on a limb with that one, huh? Yeah, I can't think of many reasons for a company to buy the patent portfolio of a company whose patents on a key Internet technology were just upheld in court. Besides pulling a SCO, that is.

    Can we just refer to this kind of manuover as "pulling a SCO" from now on?

    --
    -- @rjamestaylor on Ello
  4. what is the world coming to? by derrith · · Score: 3, Interesting

    I've never understood the relevance of such silly patent battles. If they've let ebay and all hte rest of these auction sites get away with patent infringement thus far, why are they finally deciding to "stand up and defend our IP"?

    --
    why does the porridge bird lay his eggs in the air?
  5. The Solution... by drayzel · · Score: 5, Funny

    Ebay should just take the easy road and remove online auctions from their business model.

    They could turn themselves into a a portal, or maybe maybe a search engine. Maybe they could sell groceries and have them delivered. I wonder if the CEO has heard of push technology? Push will be the wave of the future! Why surf around for content when it can be delivered via a cute little cartoon caharacter.

    I doubt this whole 'auction' thing will ever catch on anyway. None is ever going to buy a piece of junk from an unknown person over this here new fangled internet.

    ~Z

  6. This is ridiculous by rsilvergun · · Score: 5, Insightful

    How the heck do you patent doing something that's been done for generations just because it's on the internet. It'd be like patenting giving stock quotes over the phone. It really ticks me off to see all these companies with nothing real to offer humanity getting patents for using other peoples technology. If I were ebay, I'd try and kill this patent based on the shear obviousness of it.

    Still, I can't help but wonder if the reason America is so patent crazy lately is to get a leg up on the rest of the world. I'm pretty sure large parts of Europe will be tricked/cajoled/forced into honoring this crap eventually, and I know Iraq will (whether they want to or not).

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:This is ridiculous by Troed · · Score: 5, Interesting

      The European Parliament will vote on patents in EU in just a few weeks - having a case like this go public _before_ that happens will only help us from having equally relaxed restrictions on software patentability as seen in the US.

      Will most surely have patents on software soon, yes, but that will probably exclude "business methods". Algorithms will be patentable, "one click shopping" and "buy it now" will not.

    2. Re:This is ridiculous by rsilvergun · · Score: 4, Insightful

      How is this a large step? The only difference is the medium used to transfer information about the auction. If the company had at least invented the medium, they might have a point. All they did is apply pre-existing technology and knowledge. Auctions + database + web form = online auction. To anyone who grew up using computers, and for whom using computers was a daily part of their lives (and for whom a computer isn't some magic black box they refuse to understand) the idea is blatently obvious. A computer is nothing more than a tool, and it's ridiculous that you can patent the application of that tool. It's like patenting driving nails into wood in one hit. I can see it now, Amazon's new one-hit hammering.

      You'll say "why didn't you patent it then?". It's not because the idea wouldn't occur to me, but because my mind isn't devious enough to think such a thing patentable.

      --
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    3. Re:This is ridiculous by rsilvergun · · Score: 4, Insightful

      This is not a case of "Existing Invention + Existing Invention = New Invention". This is nothing more than a the application a pre-existing communication tool (the internet) being used to expedite the running of auctions. The key here is that the internet isn't some magical place where web pages pop up, it's a communication tool. Anyone with a background in computer science can see that plainly enough, and anyone who can see that can clearly imagine using this communication tool for all manner of commerce, auctions included.

      The technology may have existed in the 60's, but the tools weren't widely available or in use. The technology for printing books in mass has existed for hundreds of years. Should the very notion of printing books in mass (rather than a particular implementation of a printing press) be patentable? That's the differece between the invention of a tool and the application of it. They've patented the application of a tool.

      Oh, and the quick sort algorythm, along many complex mathmatical ideas, aren't blatently obvious in even hindsight. There's lots of things not obvious in hindsight. Using a pre-existing communication tool for communicating about auctions isn't one of them.

      --
      Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    4. Re:This is ridiculous by JPMH · · Score: 4, Informative
      The rapporteur of the committee choosing amendments - Arlene McCarthy - has said that any proposals or arguments based in the notion of software being non-patentable will not be heard:

      Not exactly

      There are already several useful amendments already down which would (unlike McCarthy) would place real limits on software patenting.

      For an introduction to some of the amendments, see:
      http://swpat.ffii.org/papers/eubsa-swpat0202/ipat0 304/index.en.html

      There is also a page (still under development) which analyses all the amendments placed so far:
      http://swpat.ffii.org/papers/eubsa-swpat0202/juri0 304/index.en.html

      McCarthy cannot stop these amendments being voted on (now expected to be the 16th June), and several have already secured majorities in votes on other, advisory committees.

      What I think the IDG article means is that she would not agree to personally recommend any new "compromise amendments" at that meeting, if they do not endorse software patents.

      It is notable that while McCarthy talks up the strictness of her proposals, they effectively amount to unlimited software patentability; as well as lower standards, they would impose the EPO's bend-over-backwards flexible approach on the national court systems of countries like the UK, France and Germany, which have all previously been much more reluctant and limited in upholding software patents.

  7. How silly by metalhed77 · · Score: 4, Insightful

    What truly is non-obvious? The fact that this can be patented is truly ridiculous. I can't see how this is a case of patents protecting the economic goals of this country. In this case the patent produces the exact opposite of its original goal, it removes competition in the sector. Yet another reason to search for alternatives to our current IP system.

    --
    Photos.
  8. Re:Non-obvious? by Beryllium+Sphere(tm) · · Score: 5, Informative

    The patents are not on holding an auction, but on the fixed-price Buy It Now feature
    [opinion]which is even sillier[/opinion].

  9. I still don't get the patent office by fireman+sam · · Score: 3, Funny

    Take an existing event, which by itself in not patentable (ie an auction) and stick it on a have the participants interact through the internet, and all of a suddent, you have just "invented" the best thing since sliced bread (Patent Pending).

    So:

    1. Take existing "thing" everyone does
    2. Stick it on the net, and patent it
    3. Profit

    Take that underpants gnomes!

    --
    it is only after a long journey that you know the strength of the horse.
  10. Re:Is this why... by cmason32 · · Score: 5, Interesting

    I'm so tired of this "let's blame the lawyers" crap. Remember that it's the actual parties who file the lawsuits; lawyers are merely advocates for their clients. And, unless it's a bench trial, it's the general public that makes the decisions regarding verdicts and damage awards.

    Whether you think society is too litigious is your opinion. But, to blame that on "lawyers" and not all the assholes who file the frivilous suits is not "insightful" at all.

  11. Re:You can't patent a business process by petecarlson · · Score: 5, Informative

    You aren't allowed to patent a business process (i.e. "the assembly line")
    Courts ruled you could in 1998. Personaly I think the courts in question were smoking crack.

  12. this is obviously the road to riches by tankdilla · · Score: 3, Funny

    My plan for retirement:
    1. Come up with a plan or method that sounds crazy, impractical, or stupid to everyone, and copyright it.
    2. Wait 5 or 10 years for someone else to find a way to make millions off it.
    3. Sue for copyright infringement.
    4. etc...

    --

    -Look lively. LOOK LIVELY!!! --Mr. Shmallow

  13. Maybe this won't be so bad in the long run by dafoomie · · Score: 3, Insightful

    This might be an important case, if ebay decides to try and challenge the legitimacy of the patents. If they win, it could set a good precident. If they lose, it'll be a disaster. I hope thats what ebay does, allowing MercExchange to make money off these absurd patents will only encourage others. Oops, it appears that I have a patent for electronicly displaying letters and numbers...

  14. So big deal by fm6 · · Score: 4, Interesting
    This would be interesting if EBay had any real competition. But attempts to set up competing auction sites have consistently failed (buyers go to EBay because the sellers are, sellers go to Ebay because that's where the buyers are), so the only real question is who gets to share in EBay's profits.

    If these patents continue to hold up, then either EBay will buy them for some stupendous price, or somebody else will buy them and charge EBay studpendous fees. Either way, EBay will continue to do business much as before -- the profits will just get divided slightly different. Big deal!

  15. Something new for the Devil's DP Dictionary by octalman · · Score: 5, Funny



    To SCO (too skoe), v.t. (1) To attempt to collect royalties or fees for services or the use of properties to which the perpetrator has no rights, or to which the alleged rights are highly dubious. (2) To bully by means of expensive trial lawyers. Also, pulling a SCO (colloquial).

    SCO-ed (skoad, skode), (1) past tense and past participle of To SCO (q.v.). (2) adj. Result of the action of a SCO-ing.

  16. yes, big deal. by Erris · · Score: 3, Interesting
    This would be interesting if EBay had any real competition. But attempts to set up competing auction sites have consistently failed

    Now they have one more reason to fail, but it has nothing to do with market forces, freedom or the American Way. You telling me I can't do something obvious because you did it first is bogus. I might like to run a trading site for the fun of it, that's they way ebay started. If it makes lots of money, like ebay did, goodie for me. If not, no big deal. Me paying you money for nothing is not something I care to do. Screw off.

    --
    DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
  17. Nothing about auctions according to the article... by evilviper · · Score: 5, Interesting
    Did anyone here read the stinkin' story??? 9 post at +3 or better so far, and all obviously only read the summary...

    Pay close attention to this (block)quote:
    a jury ruled that eBay had violated patents belonging to MercExchange, which said it will file an injunction against eBay to keep them from using the fixed price technology MercExchange had patented in 1995.


    That's right... According to the story, the only thing eBay can't do, is the "Buy it now" thing. Auctions go on as usual.

    The second article says the same thing, approximately:
    US District Court Judge Jerome Friedman had rejected eBay's attempts to throw out the claims made in the disputed patents, but limited the trial to patents involving fixed-price selling and having an integrated payment processor.

    Last time I used eBay, there was no "integrated payment processor", and "fixed-price selling" was a new feature... In other words, they were doing well before those features, so I imagine they could do without them if things don't go their way.

    I hate patents, but I hate sensationalist /. stories as well.
    --
    Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
  18. Re:Is this why... by PurpleFloyd · · Score: 5, Insightful
    Lawyers don't deserve all the blame, but they do deserve a significant portion. Many corporations (especially large ones) will employ a legal team that makes recommendations to the upper management regarding legal matters like lawsuits. Thus, a lawyer may recommend a frivolous lawsuit to the higher-ups in a company, who don't understand the situation and don't care very much. They just sign what their legal team puts in front of them and let the lawyers run free. After all, if the law allows them to file these lawsuits, then it must be okay, right?

    The job of these lawyers is to find and exploit legal loopholes to benefit the corporation they work for. A lot of them are scumballs. That's not to say that all lawyers are bad; that's an attitude I don't understand. There are many lawyers committed to things like bringing criminals to justice or fighting for the poor. They just aren't the ones driving brand-new Porsches. Still, many lawyers are willing to take a pay cut to work in the DA's office, because they simply can't stand the "do-it-for-money" attitude of many big law firms and corporate legal departments. If people were willing to look at the entire legal picture, they would find that it's like many others: a few high-profile assholes, and many people who toil away for good causes in relative obscurity.

    By the way, I'm not a lawyer, but I do know several. I do not associate with assholes. End of story.

    --

    That's it. I'm no longer part of Team Sanity.
  19. Re:Is this why... by utd-blaze · · Score: 3, Interesting

    Behind every sleazy lawsuit is a sleazy lawyer.

    Consider the number of utterly despicable lawsuits that are filed every day. Every one of those lawsuits represents a lawyer who is willing to take advantage of somebody else for his own and his client's financial gain. That MercExchange are assholes for making lawsuits their business plan goes without saying. That lawyers are assholes for screwing over society for their own financial gain has to be said.

    --
    Do me a favor and double it!
  20. Killing American economy by phorm · · Score: 4, Insightful

    I'm thinking more along the lines of businesses moving out as opposed to citizens. How about ebay moves its entire operations to Canada, or maybe Aus? We have decent webserver pricing, there's already ebay.ca, etc. Swap the domain name to a Canadian nameserver.

    Such an incredibly stupid patent would have less chance of surviving Canadian court... not sure about Aus... but it seems that America is slowly poisoning its own economy. I mean, X years from now America will be so bogged down by bad patents and innovation-stifling technology/laws that it will be far behind the rest of the world in a technological sense.

  21. Solution.... end it now by zakezuke · · Score: 4, Interesting

    Rather then use "buy it now" technology, perhaps e-bay would move tward "end it now" technology, where users who are trully interested in an item can select to buy it, rather then the seller selling it. This way it should resolve the trivial issues of the IP of "buy it now".

    Now if that sounds fucking stupid, it's no more stupid then someone claiming they hold the IP to "buy it now".

    Near as I'm aware... OBO [or best offer] technology has been in use for as long as I can remember, employed by a vast amount of private citizens when selling things via news paper classifieds.

    For those "unfamilar" with OBO technology... basicly a person is selling goods or services and lists an ideal price under the terms that you can buy it for that price, otherwise the selling will accept the highest offer they recieve. What we forget is offers can be higher or lower then the asking price.

    For example, I was selling a 486 overdrive some years back. I put it up for sale for like $50 OBO, and I got offers higher then what I posted it for. Basicly I explained to all involved that my best offer was like $75 but a higher offer would be accepted and sold. Needless to say this pissed people off, dispite the fact I was trying to conduct the transation in a fair and honest fasion, and taking the "best" offer.

    I would have taken $50 for it, but someone was willing to pay me more money in order to assure that they got it, as well as some assurance that it worked.

    Now... I am not the inventor of OBO technology, in fact i'm not sure who is, I would *THINK* it's in the public domain, the fact that it's in common use.

    --
    There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
  22. Re:Wait, how does this work? by silentbozo · · Score: 4, Interesting

    eBay was founded by Pierre Omidyar (who was a programmer working at General Magic at the time) as an online community (hence, e-Bay, for the Bay area up in San Francisco.) For quite a while, eBay was pretty much a personal website/community bulletin board for him, not a business (in fact, some cool code he hacked together for MagicCap devices lived at the eBay domain for a while - if anyone remembers the e-mail gateway for retrieving web pages.) I think auctions were just a feature of the site that just happened to grow into a big business.

    Based on when most of eBay's current corporate officers joined (97-98), it is quite likely that eBay as we currently know it did not exist until probably 1996. Certainly, the Buy-it-now feature that eBay uses, which was ruled as violating at least one of the 3 patents that MercExchange is supposed to own, probably didn't get implemented until at least a year or two after that.

    My question is whether these ideas (as detailed in Guaranteed Electronic Markets - 1999) appeared in print prior to the 1995 application date for the patents in question, given the existence of technologies like AOL, AT&T, and BBSes at the time. To be valid, none of the ideas embodied in the patents filed must have been published. I find that hard to believe - that the concept of haggling over a product with the option of a set price, as extended to a network (for example, over the phone network) did not exist in print prior to 1995. As for software agents, that seems like an obvious extension of existing software agent work prior to 1995. I mean, if you look at the patents in question, they cite lots of prior art which makes it clear (at least in my mind) that what they were trying to patent was neither novel nor non-obvious to someone skilled in the field in question.

    Seriously, there wasn't any literature - even fiction, that featured the idea of auctions over a networked computer system,with software agents?

  23. Re:It's pulling AN SCO by Tuxinatorium · · Score: 3, Informative

    if you pronounce it "sco" as in "scope" instead of spelling it out then it's "pulling a SCO"

  24. Electronic securities exchanges by hughk · · Score: 4, Insightful
    The biggest precedent should be the use of electronic securities exchanges. These have existed since the eighties, matching buyers with sellers. A financial security is essentially an intangible represented by a document, but it is easy to swap that intangiable for something tangiable with very little change to the technology.

    This has been going on since the eighties. Maybe not on the Internet, but definitely within private networks of cooperating organisations.

    --
    See my journal, I write things there
  25. Karma by Lonath · · Score: 3, Troll

    Remember when Ebay got those retarded patents on showing thumbnails of items for auction? I think their whole schtick was that they had items from more than one database being presented in a single webpage or something. :P Well, this is karma.

    I don't want to see anyone win here. I want to see the award reduced massively, and I want to see the person who filed the lawsuit vilified by everyone. I want the injunction to be granted and I want them to fight it out as long as possible while their online auctions taken down. I don't wany Ebay to sell out to another company. I want Ebay to enforce its online auction patents against everyone else doing online auctions and I want all online auction sites taken down.

    I want this to be a big fucking huge giant mess that pisses every Internet user in the entire country off and has them asking: Why can't I sell my <worthless crap> anymore? How dare the government tell me I can't do this? You mean a bunch of *lawyers* can just take away the Internet?

    It's wishful thinking, but I hope that Ebay goes all the way with this and tries to drag everyone down with them.

  26. How often do you hear : by DrSkwid · · Score: 3, Funny

    Client : So, should we sue him, send a letter or what?
    Lawyer : Nah, that's just being too litigious, lets wait a few weeks and see what happens.
    Client: Hmm, okay.

    --
    There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
  27. Re:MercExchange selling? by Dun+Malg · · Score: 3, Informative
    gasoline manufacturers putting MTBE in their product, even though it causes serious water pollution.

    I don't know about other states, but in California the addition of MTBE was mandatory. It's an oxygenating additive intended to reduce air pollution. Now that the dingbats in state gov't realize they've traded a minor air pollution reduction for a major water pollution increase, they're "phasing it out". Not that I like oil companies (the gouging bastards), but the MTBE fiasco is a case of state stupidity.

    --
    If a job's not worth doing, it's not worth doing right.
  28. Re:Is this why... by Dun+Malg · · Score: 4, Insightful
    Are there asshole lawyers? Sure. But there are assholes in every profession - why single lawyers out?

    Because lawyers have actually encouraged the creation of a legal system where advocates must use any dodge or ruse they can cook up under the rationalization that "the other guy's doing it too". Law school seems to encourage this sort of rationalization. I have two cousins and a high school friend who're lawyers and they've basically admitted to this, albeit under the rationalization that "they owe their client the best representation they can provide". One cousin, at least, also admits to the fact that it's rationalizing; but the other, he still proudly tells the following story: as a lawyer in the Army, he defended one soldier who robbed another soldier at gunpoint, which was seen by a third soldier. This third soldier was a key prosecution witness and repeatedly affirmed that yes, the gun was clearly a real gun. So my cousin gets the guy on the stand and, for forty minutes asks him a series of questions, all of which had been asked before, all of which were answered yes. So he's firing off these useless queries, and the guy is getting bored answering "yes...yes...yes...yes..." ad infinitum. So then my cousin slips in the question "is it possible the gun wasn't real?" and the guy says "yes...oh, sorry. I mean 'no'". He then hammered on this totally contrived "witness uncertainity" and got the guy down from "armed robbery" to just "robbery". He tells this story proudly at family gatherings. The fucking scumbag.

    That's the problem with lawyers: they're encouraged to believe that the ends justify the means.

    --
    If a job's not worth doing, it's not worth doing right.