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."

Comments

Intellectual Property for Auctions

[Revvy]

...now available to the highest bidder.

such is the fate of humanity

[Anonymous Coward]

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

Ya think?

[rjamestaylor]

• 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?

The Solution...

[drayzel]

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

This is ridiculous

[rsilvergun]

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).

Re:This is ridiculous

[Troed]

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.

Re:This is ridiculous

[rsilvergun]

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.

Re:This is ridiculous

[rsilvergun]

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.

Re:This is ridiculous

[JPMH]

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.

How silly

[metalhed77]

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.

Re:Non-obvious?

[Beryllium Sphere(tm)]

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

Re:Is this why...

[cmason32]

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.

Re:You can't patent a business process

[petecarlson]

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.

So big deal

[fm6]

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!

Something new for the Devil's DP Dictionary

[octalman]

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.

Nothing about auctions according to the article...

[evilviper]

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.

Re:Is this why...

[PurpleFloyd]

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.

Killing American economy

[phorm]

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.

Solution.... end it now

[zakezuke]

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.

Re:Wait, how does this work?

[silentbozo]

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?

Electronic securities exchanges

[hughk]

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.

Re:Is this why...

[Dun Malg]

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.