AT&T Sues PayPal and eBay for Patent Infringement

theodp writes "AT&T on Thursday fired the latest shot in the escalating Web patent wars, filing suit against PayPal and eBay. AT&T issued a press release alleging that the PayPal and BillPoint payment systems infringe on AT&T's 1994 patent for the mediation of transactions by a communications system. Besides e-Payments, the AT&T patent purports to cover e-Voting, e-Auctions, e-Gifts, e-Donations, e-Wishlists and e-Referrals. e-Gad! e-Yikes!"

Comments

What's next?

[mandalayx]

Read the patent.

There are 28 different claims as to what the system patented by ATT is. A cursory layman's look gives the impression that it covers all kinds of commerce done over telcommunications networks.

I am seeing a situation where ATT would require licensing for every credit-card accepter on the Internet. That's not so fun.

Re:What's next?

[zoloto]

the internet isn't a telcom is it? the breakdown of the word is telephone communications. so shouldn't this be relevant to dialup account users and not broadband... right?

AT&T has tried to screw the american public since it's inception and the usual /. rant of "clinging to an old business model"

Most of these companies had better shapeshift some of their mindsets and reasoning or they'll just die, and take out the rest of the interconnected world as they go.

just my 2 bits.

Re:What's next?

[SpaceLifeForm]

You pay for the right to make a credit card transaction with a credit card. It's recursive. The banks love it.

Re:What's next?

[steve_l]

the patent doesnt start of with telecoms.
Claim 1 says 'a communications routing system of a type which functions generally to establish connections with arbitrary ones of a plurality of entities'. That could cover yodelling credit card info over the alps as much as anything else.

Later on it gets into 'special phone numbers' -the core of the patent is really about humans-on-phones, but unless those primary claims are junked then we are in trouble.

Claim 5 says "the communications routing system is a switching portion of a telephone system;"; the internet may or may not be this, depending upon implementation details. If you disprove this and the previous claim 'any routing system' then ebay have a problem.

On the bright side, I think claim 1 is way too broad. There are lots of places -like many italian shops- where the payment person is split from the billing person, so the mechanism claimed for has existed in the physical world for ages.

Re:What's next?

[D'Sphitz]

wouldnt the telephone be considered prior art? how about the use of pen & paper?

not overly-broad at all...

e-Bullsh!t.... Did that on Usenet back in 1990....

[thewiz]

I've bought and sold items on Usenet as early as 1990 using a go between to make sure the sale completed properly (and I'm sure other people did that even before I did). AT&T is trying to patent a method that has been used since the creation of telephones, credit cards, and credit card processors. Just because it's over the Internet doesn't make it patentable; you are STILL using the TELEPHONE.

USPTO in complete and utter chaos

[MikeDawg]

If we haven't posted it once, we've posted it a million times; the USPTO is in complete and utter chaos with these tech patents. I don't the USPTO is equipped, or ever has been equipped to handle these technological patents (at least in regards to say computers and/or the internet technologies).

They need to set up a separate repository of information to store for computers, computer programs, and internet technologies that are looking for patents. They need to hire a staff that can handle the various searching for prior technology (prior art) for this very advanced stage of patent registrations. They probably also need to setup a complete different sort of organization of information to do/handle this.

Until the USPTO gets straightened up, I see a never-ending line of lawsuits for copyright and patent infringement with regards to computer technologies and internet technologies!

Inevitable

[WatertonMan]

As soon as some of the more minor silly patents were allowed, it was only a matter of time before broad sweeping patents were inforced. However think of it this way. When someone tries to enforce a patent this outrageous it is only a matter of time before the government steps in and rethinks things.

Patent reform is long overdue. There was an article on Slashdot a couple of weeks ago from a few government agencies suggesting reforms. But until we get our representatives to pay attention not much will happen. This isn't a democrat or republican thing. There are "bad guys" on both sides. However this really does that the potential to slow the growth of innovation especially in the tech sector.

It's an Obvious patent

[vistic]

I don't sincerely think that any of these websites were even aware of AT&T's work as they developed online payment systems, etc. - much less copied the idea from AT&T.

I think the key is that it was obvious at the time that payments would be accepted online. The same goes for a lot of the technologies they claim are covered by this patent. So a bunch of people found a means to accomplish this obvious goal that was almost *expected* at the time simultaneously.

I don't know much about patents but might this fall under the category of "obvious" which I think is supposed to be unpantentable?

Western Union should sue

[SparklesMalone]

It seems someone writing a check to Western Union back in 1880 to wire money across the continent on a telegraph line was "process(ing) payments over a communications system"

The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.
Ecclesiastes 1:9

Compare these patents with drug company patents

[darnok]

If drug companies could patent their products with the ease that the USPTO seems to allow IT patents, then the first company to apply for a patent covering "something that makes sick people better" would pretty much have the market cornered.

a better IP system

[Nick haflinger]

What we ought to do is have a property tax copyrights and patents. The owners of intellectual property could set the price of their inventions then anybody that ponies up the scratch can take it from them unless the inventor ups the price and pays a huge penalty and some back taxes. If the tax is to onerous one can always lower the cost or even release the IP to public domain. You could also get rid of time limits with this since the cost of protecting IP indefinately would be general prohibative. The increased revenue could fund an effective and staffed USPTO.

Bad trend

[lurker412]

We need to think hard about the consequences of becoming a litigation based society. One can imagine a day in which the US does not produce anything at all but merely sues the shit out of everyone who does. I guess there will be a few techies left--only those with 15 years experience supporting law firms need apply. Everything else will be outsourced off-shore. The only jobs left will be for lawyers, para-legals and judges. If we get lucky, we might be called upon to serve on juries once in a while.

I used to be cynical, but reality has overtaken me.

What about banks?

[macdaddy]

All bank transactions are conducted over telecom lines of some sort, not to the Internet mind you be directly to their parent branch or HQ. They still are making a financial transaction via telephone communications.

Needs to satisfy all claims, not any

[cgenman]

Of particular interest are claims 5 and six, which sets forth

5. The method set forth in claim 1 wherein:

the communications routing system is a switching portion of a telephone system; and

the step of receiving a transaction specifier includes the steps of:

receiving a special telephone number in the switching portion; and

using the special telephone number to derive the transaction specifier.

6. The method set forth in claim 5 wherein:

the step of receiving a transaction specifier further includes the step of using the special telephone number to derive a telephone number of the vendor and

the step of responding to the transaction specifier includes the step of using the telephone number to obtain transaction information concerning the transaction from or provide transaction information to the vendor.

Claim 7 is similar.

In other words, to be a valid patent violation, the parties must use a telephone number to identify eachother. I don't know about you, but I've never given nor received anyone's telephone telephone numbers on paypal.

Now, AT&T may argue that IP addresses are a "special" telephone number... Which is utter bunk, as VoIP is after 30 years of IP just starting to exist. But even then, Paypal does not connect independent parties with eachother via IP address, but rather e-mail address. Any respectable judge would throw out of his or her courtroom a lawyer that attempted to argue that "telephone number" meant any system that involved routing, including IP, E-mail, Telegraph, AIM, Kazaa, and Shared Printers.

Overall it looks like the original patent wasn't quite that bad... A shared telephone authentication system based upon the telephone company's then-new caller ID system as an identifier. As AT&T noted in their patent application, this is a way to mediate a transaction over the telephone while shielding the buyer's information from the seller. What's bad is then taking this and attempting to apply it to all internet transactions.

You filed your patent application. It was accepted because it was sufficiently narrow. Don't go whining now because it wasn't as broad as you would like.