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EBay Fined $29.5M in Patent Case
pigreco314 writes "As reported by Washington Post and many others a federal judge Wednesday ordered online auction house eBay to pay $29.5 million to a Virginia inventor (former CIA engineer) who accused the company of stealing his ideas." This case has been going going on for awhile, but this looks to have some finality. Patenting "Buy it Now" is almost as stupid as One Click Shopping.
If a large corporation like ebay can't win a case brought up against them for infringing an obviously frivolous patent then what chance do the rest of us have? Drastic reform in the uspto is necessary. Since the government started cutting federal funding they have started looking at the organization as a corporation in place to serve their "customers." This is a horrible model for a patent organization, their customers should be every citizen of the country, not just those who file patents. The patent clerks are overburdened and they are rewarded on the basis of how many patents they accept and file, which means any patents they find not suitable are not beneficial to their careers.
Also, how does the court system justify an award of $29.5 million? This seems like a huge amount for such a simple patent. Does the defendant own his own auction house? Is ebay's use of buy it now seriously impacting him financially? This is just absurd.
In his ruling, U.S. District Judge Jerome Friedman said he would not require eBay to abandon the disputed technology, saying Woolston's lawyers failed to show that he would suffer irreparable harm if the court did not issue an injunction.
If they failed to show that there would be irreparable harm from future use than how did they show that there was harm from prior use? I guess they don't need to prove any harm, they just need to show they own the patent and they get a huge sum of money. Wired's article says that both sides plan to appeal, maybe ebay can get a better deal in this process.
Visualize the world of wine
The jury said that eBay's "Buy It Now" option, which allows auction surfers to do the same thing, infringed on Woolston's patent.
From: Another patent of his (February 1999)...
Auctioning an uniquely identified item (e.g., used goods or collectibles) with a computerized electronic database of data records on the Internet includes creating a data record containing a description of an item, generating an identification code to uniquely identify the item, and scheduling an auction for the item at the computerized database of records. The item is presented for auction to an audience of participants through a worldwide web mapping module executing in conjunction with the computerized database. The data record connotes an ownership interest in the item to a seller participant on the computerized electronic database of data records. The worldwide web mapping module translates information from the data record on the computerized database of records to a hypertext markup language (HTML) format for presentation through the Internet. Bids are received on the item from participants on the Internet through an auction process that executes in conjunction with the computerized database of data records. Auctioning of the item is terminated when the auction process reaches predetermined criteria. The auction participant is notified of the high bid in the auction process. The unique identification code is provided to the auction participant with the high bid to uniquely identify the item.
Seems like this fool was trying to go after EBay by filing patents that were VERY similar to what EBay had already been doing. Nevermind "Buy it Now", he wanted it all.
The lawyers are going to make money, both parties are considering an appeal.
-EB
Do you ever walk alone like a drifter in the dark?
He was able to defend a patent for how a normal sale works. I guess in the context of an auction it could be novel, but it still seems odd.
Slashdotter are stupid and biased.
E-Bay will now be charging a 15,000% "We Got Sued" tax on all completed bids over the price of $0.01
Defender of Microsoft and Communism!!!
The patent system may be stupid, but he ain't if he made $29.5 million!
If this type of thing is allowed to continue, it will certainly put a damper on real innovations. Vauge patents will keep many companies from implementing anything for fear of being sued.
DeviantArt Page
NSFW...until someone sues this old coot for infringing on their patented idea to sue companies for patent infringement of frivilous patents.
Wooo man will the judges have fun with that one.
Posting as directed.
i can just imagine what it would have been like in the past if the patent office was what it is like now...
horsenbuggy: your car uses four wheels!
ford: oops
$29.5M found in favor of horsenbuggy.
Why is it that the patent office approves any obvious idea that has existed in the real world for a long time as something new if a computer is involved?
Everyone that disagrees with me is a paid shill
he has a verified paypal account!
Intelligent Life on Earth
- You click it and it charges your credit card on a random date and sends you the merchandise whenever the seller feels like it!
Or maybe not. Sshhhhh... no stealing .... sshhhh
How can you have a Jury on a patent trial?? Of course eBay lost...what person off the street would be able to realise how stupid a patent like this is.
This is like presenting a Jury with DNA evidence:
DNA Expert: "There is a 1/1,000,000,000 chance that this DNA comes from someone else."
Jury: "Holy crap! That guy wasn't 100% certain. Not guilty!"
"The market alone cannot provide sufficient constraints on corporation's penchant to cause harm." -- Joel Bakan
Just chew on some aluminum foil - that temporarily short-circuits the transmitter.
Note that I said temporarily. In order to keep them from hearing you all the time, you've got to chew on the foil all the time.
That, or rip all your teeth out with a rusty set of vicegrips or light an M80 and stick it in your mouth.
Cruising the internet on my TI-99/4A @ a whopping 300 baud!
I hear that you can avoid litigation yourself by leasing his IP for $699 for small auction sites, $1499 for sites utilizing 20 servers or more.
...the judge:
;)
1.) Reduced the jury award from $35 million to $29.5 million. Not a LOT, but a few million here, and a few million there, you're soon talking REAL money.
2.) Did NOT make the case "special" even though the jury found that eBay was a "willful infringer." The judge COULD HAVE tripled the award AND added attorney fees.
3.) Ruled that eBay could STILL maintain their "infringing ways" even though patent law clearly provides that a patent holder has the right to excluded others from practicing their invention. Of course, the reports could have failed to notice that eBay was required to post a bond pending appeal and that that's the reason they can keep "infringing" the patent, at least until the Federal Circuit rules on this in a year or two.
These facts lead one to believe that the judge didn't agree with the jury in this case. While it most certainly will be appealed, I still wonder if the judge is concidering overturning the jury verdict, not withstanding the verdict.
So, while the posted comment seems to make it look like the judge is "going after eBay" and this now has some "finality" it actually appears to be quite the opposite.
And as to it being "stupid" to patent this? I can site 29.5 million reasons it wasn't for the inventor to patent it.
Stop undressing me with your eyes. I'm ugly naked.
I may be interpreting the original patent wrong (IANAIPL), but it seems like the intent of the patent was to establish a series of franchised nodes throughout the US through which consumers would put up items, buy items outright, or bid on auctioned items. Sort of like a little kiosk at a local store that you would go to visit (the patent used the example of a man visiting a card store and putting up one of his cards for sale, while the owner was using it as an online storefront), complete with a digital camera and a printer to put out a bar code that could be affixed to the product to track the order (I'm guessing for purposes of sales fraud). It doesn't even seem to be very similar to EBay's business model.
:)
Then again, I could be misinterpreting it
Actually, if a company doesn't find that their aspect is "patentable" they can file a statutory invention registration under 35 USC 157.
Also, if a company can show that their "aspect" has been made public for more than a year before the filing of the putative patent application, then the patent will be invalidated.
Finally, considering all of eBay's financial wherewithall, it's pretty clear that their isn't any evidence that this process was out their prior to the patenting of the invention.
Remember, in the US, the patent right goes first to those who invent the process/apparatus, not to those who file first, as in most other countries. So, if anything, this protects the "small man" that didn't have the money to hire a patent attorney immediately, or pay the fee to expedite it.
Finally, as you seem to have a dislike for big business, doesn't this case show that the little guy can still win?
Stop undressing me with your eyes. I'm ugly naked.
former CIA engineer
Of course it's a dumb patent.
And if so, could it be construed as a conflict of interest? Perhaps they could have settled out of court with the "buy it now" option?
My company recently applied for two patents for which I am named the "inventor". the patents are pretty obvious ideas. In my opinion, there is nothing there worthy of a patent, in other words, there is nothing that is not obvious about the ideas.
While speaking with the patent attorney and describing the details of the "invention" he said that his job is to make the patent as broad and general as possible (read vague) to make it easier to litigate an infringement. You could see his mind working as he worked out the patent application in his head.
While I agree we need patents to protect intellectual property, patenting obvious ideas, not even actual working inventions, is amazing. Customers have been able to "Buy it Now" at any retail store in the world since the dawn of time! Why is it that when we get a computer involved we need a patent and ~$30 million USD in compensation for this idea?
The attorney would constantly look at other things we were doing and ask about them. The only plus to this is that I'll have my name on a few patents soon, if you call that a good thing. I was also told that if in a few years the need to litigate the patents arose I would be deposed. I'm imagining myself at a different job in a different location getting a letter saying I need to be present at a law office some where!
The jury said that eBay's "Buy It Now" option, which allows auction surfers to do the same thing, infringed on Woolston's patent.
No worries. Since there is no single instance in time, how can one claim to have a patent to buy something "now"?
ebay plays the exact same game here. They are banning people from using vauge e-commerce buzz phrases from advertisements regarding to ebay, claiming a patent. They have even started a business group to sell the rights to use these words. They get what they deserve./ m08/i07/s0 2 (the banning)2 4/rtr10094 38.html (about the selling of words)
http://www.auctionbytes.com/cab/abn/y03
http://www.forbes.com/newswire/2003/06/
I clicked on the article and all it really says is that the jury found that eBay willingly infringed on his patent. If we take this to actually be true then this settlement sounds about right. The Buy Now feature is something that eBay uses to attract people. By attracting people eBay makes money, tons of money. If they did see this first somewhere else then they should pay that person for his work.
The $30m is stated as punitive, a pretty good slap on the wrist. Maybe next time eBay will actually license a patent from the little guy and save some money in the long run rather than have a free lunch
i'm serious. the way patents are going is out of hand. a new, more stringent patent system is probably needed, and it seems the best way to achieve that is to simply scrap the USPTO and start over with it.
grey wolf
LET FORTRAN DIE!
"Ideas" are not property, to be bought and sold. And, if you and I invent the same thing at about the same time, but you patent it and I do not, you have essentially stopped me from profitting off my own work, which was most likely equal to the work you did.
Just because two people have the same idea does not mean one stole it from the other.
This is especially true when the patent is about a concept, instead of a method; and double-especially true when the concept is a simple or obvious one.
The rant isn't about patent infringement; it's about how silly patents have become (such as the "concept" patent of "buy it now"), thereby undermining the whole meaning of patents.
Legal 101 there's no in betweens in the law or else it wouldn't be fair.
Since when has the law been about being "fair?"
People shouldn't rant on about something which is not trivial,
Near as I can tell, this patent is trivial, as in, given frivolously to a trivial concept which is neither unique nor innovative.
Now some of you may not agree, but to follow the law to the letter eBay was wrong.
Not really. If the patent office followed the law to the letter, they would not have issued this patent due to its obviousness.
Microsoft is to software what Budweiser is to beer.
Hey! I already patented the idea of sticking an M80 in my mouth!
See you in court, buddy!
Lately democracy seems to be based on the skybox, the Happy Meal box, the X-box, and the idiot box.
It seems like a lot of people are filing patents that simply combine 2 or more already existing technologies. This case is basically a patent combining online auction with online purchase, two separate things that the patent owner didn't invent, but simply called the combination his invention. Then there's the RIM case where NTP patented sending email over a wireless device. NTP invented neither email or wireless devices. There's also a guy trying to sue people for compression in streaming video, who didn't invent either streaming video or compression. It seems to me a patent that talks about combining 2 technologies in a vaugue way is not fair. All you're doing is patenting an application of an existing technology. It seems unfair to be able to restrict the use of a technology for which you don't own the patent by coming up with a specific application of the technology and patenting it. For instance, if I owned the patent for a streaming video system, and someone came along and sued me because I decided to use compression technology to stream the video, they're limiting what I can do with my own invention.
Vote for Pedro
I don't think anyone is arguing against patents, only against patenting obvious ideas. The patenting of business models, obvious algorithms, and so forth should not be allowed, especially for software. I should know, I'm currently going through the patent process.
I also think it is important to see how the patent holder deals with patents. For example, the company I work for is after as many patents as they can get. This is not to go out and sue everyone, but to protect itself against other companies like IBM, which holds so many patents it's impossible to not infringe on.
Patents should be for non-obvious solutions. Buy it now is pretty obvious, as is Amazon's one click shopping. Obvious software algorithms and methods should also not be patentable.
The problem in the US is that since the patent office is underfunded they leave the settlement of patents up to the courts. The problem here is that judges and juries are not technical people and aren't qualified to make these decisions. The bar for accepting a patent needs to be raised significantly IMO.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
I just had a look at Patent 5,845,265. The bit covering online auctions says:
At the auction date, perspective participants log onto the consignment node auction mode locally or through the consignment node network and await the first good to be auctioned. It is understood that in the best mode of the invention the participant will have a data terminal with a digital to analog converter such as a "sound blaster" and speaker, the digital to analog capability may be used in the auction mode to bring the aural excitement of an auction, e.g., the call of the heckler, the caller and bidders, home to the auction participant. This is discussed in more detail below.
The consignment node takes the first item to be auctioned and posts the image of the good and the good's text record to the participants. The consignment node then posts the opening bid. It is understood that the bid postings may be in a protocol that invokes the generation of an auctioneer's voice at the participant terminals. The participants may then respond with a higher bid. The consignment node mode scans electronically the participants for bids and accepts the highest bid. If bids are tied the consignment node may take the first highest bid by the participants log on order. A particular bidding participant receives a special acknowledgment from the consignment node that her bid was accepted. The consignment node then posts the higher bid to all the electronic auction participants. The consignment node repeats this process until no higher bid is received for a predetermined amount of time and closes the auctioning of that particular good.
Doesn't sound anything like Ebay to me. If the patent is meant to cover every single conveivable form of "competerized auction house" why don't they just say so? If they were really honest they could say "Joe bloggs has thought of something to do with auctions and computers. He isn't going to do anything with it, but has provided enough techno-babble to convince non-technical people that he could do something with it. Therefore, if anyone else tries to do something remotely similar they must give him money."
I work for a small company that has managed to survive the tech downturn so far. So, from a small company that currently employs about 25 people, let me just say really loud: this kind of landmine would kill us dead.
Whilst nothing in our systems is so exceptionally original or complicated that it should warrant a patent, this news now means that all the obvious problems we've solved in developing our product so far are potentially vulnerable to being extorted by paper-idea profiteering sleezebags-- and it's all legal and fair according to Uncle Sam.
The only good thing that might come out of this situation is it might wake up america's sleeping legislators and force them to face and solve this situation that is quickly escalating to an environment lethal to REAL innovation.
Why should anyone try to start a business on the internet in this climate? Every idea you come up with is susceptible to having a prior patent claim the way things seem to be currently working. It's already bloody hard enough to start a business without having to worry that the processes you want to implement are owned by USPTO licenced crook who is going to wait until it hurts-not-to-pay to come collect on you.
Do not spread "09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0" over the internet, thank you.
Why do people always use the wrong words? You can not steal an idea, except perhaps in some far-out science fiction where neuron transplants occur (Spock's brain?).
Now you can copy my idea, you can be inspired by my ideas, you can derive the same idea I had by examining some tangible expression of the idea (e.g., product reverse engineering), or you can have the same idea as me all on your own. The later is actualy the most likely reason why two individuals have the same idea, they just had the same thoughts. Thoughts are not mutually exclusive.
Now, you can steal blueprints, computer printouts, prototypes, webservers, money, or even customers; practically anything that's tangible and where ownership is by nature mutually exclusive. But you can not steal ideas.
If I actually could steal your idea, then three things must be true:
Short of that, it's simply not stealing. So the headline should have more correctly read:
If a large corporation like ebay can't win a case brought up against them for infringing an obviously frivolous patent then what chance do the rest of us have?
"obviously frivilous" how? Why would you possibly imagine a patent is obviously frivilous after surviving a jury trial? Certainly, the patent may, in fact, be invalid, but where do you come off suggesting that the patent is invalid at all, let alone obviously frivilous?
If they failed to show that there would be irreparable harm from future use than how did they show that there was harm from prior use?
You are confusing apples with oranges. "Harm" comes in many flavors, and the law remedies the harm of patent infringement in various ways.
One way, that is at law, is an award of money damages to the plaintiff for the infringement, in no case less than a resaonable royalty as determined by the Court. However, sometimes a plaintiff cannot be made whole by money damages alone, in which case such irreparable harm is remediable by an injunction -- a court order to stop practicing the patent.
This result is unusual, because irreparable harm is usually presumed, not irrebuttably, in a patent case. Ebay must have satisfied the Court that it reasonably relied upon an effective license due to the conduct of the other side.
True, the /. crowd likes to complain about patents. And it's likely most of us don't know a lot about the patent process, or the legalities involved. Unfortunately in this case the jury was not made up of Professional Patent Examiners either. It was made up of people who probably have no clue about either the technology being used or the patent process. More than likely they did not raed the relevant U.S. codes, but got each lawyer's interpretation. I don't put a lot of faith in their decision, and I am waiting to see how the appeals play out.
Most people would die sooner than think; in fact, they do.
But at least Bezos had the balls to call for reform afterward. Straight from the horses mouth. But does anybody honestly think eBay would do anything that would harm their precious portfolio? Somehow I can't see Meg coming out against the whole patent system.
Oregon Health Sciences University has been using the exact same system to sell surplus equipment since at least 1991. When you go to one of their auctions, on some items you have the opportunity to purchase the item before the auction for a set price, or else bid on it once the auction begins. Maybe this bozo went to an OHSU auction before he "invented" this idea.
If professional patent examiners stopped accepting laughably obvious patents written in vague 'legalise' by lawyers, I would agree with you.
As it stands now, however, there are even websites out there listing 'absurd patents of the week'.
Patents are there to encourage people to innovate knowing that their ideas are protected, rather than what seems to be going on often, namely people making an obvious patent, not applying the idea in any practical sense, then suing anyone later who does use it.
Would you believe someone patented the making of peanut butter and jelly sandwiches? Things like this are ridiculous but the USPTO allows them.