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?

[SpaceLifeForm]

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

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.

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.