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

This is the second time...

[i_want_you_to_throw_]

This has erupted. First USA Bank sued PayPal in September 2002. A year later PayPal countersued the company (now known as Bank One) and Bank One Delaware, also on patent infringement grounds. The companies settled those suits last month without disclosing the terms.

Apparently this would also cover 2checkout and other paying services as well. The question is, can Microsoft and other browser makers be sued for being able to submit credit card info through their browsers? It seems overly broad but then again aren't all tech patents?

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?

[Anonymous Coward]

Unless you go out an buy some ATT stock, then its friken great.

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?

[u-235-sentinel]

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

That's a scary thought. Sounds alot like what SCO is doing (I know but I had to say it). IANAL however I have spent some free time reading through the laws regarding this sorta junk. I'm getting the impression that suing a 'user' of a product for use of a product isn't legal.

For example, if I read the New York Times and come across material I have no right to read am I liable? From what I've gathered it's not my fault nor my problem. The New York Times will be liable for their product not me the consumer.

On topic now... most of these patents look rather vague. I've looked over a couple of them already and it's about as undefined as you can get. What is the patent office doing? Accepting money and issuing a patent without looking at what they did?

Re:What's next?

[eggstasy]

Bzzt. Wrong. Telecommunications comes from the greek "tele-" which means far off, distant, remote. Television - seeing stuff that is potentially far away. Telephone (-phone = sound, as in gramophone) hearing sounds, in particular voices that are supposedly distant from you.
"Telecommunications" are thus non-medium-specific. They can be wired or wireless, and consist of sounds, images or data in general.

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?

[danielsfca2]

I'm pretty sure you can sue the government. Unless you're in China.

Here's a judgment from a (totally unrelated) case where somebody did.

Re:What's next?

[steve_l]

the first claim is way too broad and vague; the later ones focus too far on voicemail systems.

And: the best bit, the sequence is too tight. It says

1. get id known to the approving entity (like a visa card) from the customer

2. get a debit value from the vendor

3. send (id,debit) to the auth system

4. get approval from the auth system

5. forward that to the vendor.

Here are some easy workarounds

a) get a range like (4.00 and 4.03) from the vendor; pick one.

b) get a limit from the auth system, then OK it with the vendor while sending the full debit to the auth system (bit of a race condition here)

c) get auth for a bit more than the debit value from the auth system

d) always grant provisional approval to the vendor, then send a refusal if it wasnt authed; 'silence' within a timeout implies granted. brittle.

e) dont forward auth information at all. Send the vendor an authorisation token (maybe a URL) that is handled by the auth system, and it is up to the vendor to probe that URL to complete the auth.

(e) is my favourite, as it gives the vendor the extra ability to make more SOAP/REST calls on the URL, like commit the transaction, or cancel it.

Overall then: easy enough to work around, no need to pony up big numbers of $$.

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...

In one word:

[Anonymous Coward]

e-vil.

Re:In one word:

[machine of god]

e-vil.

That's it. I'll see you in court.

I can't fucking believe this crap. I'm outta here.

[Ayanami Rei]

Tell the Indians they can deal with this bullshit. I'm going to grow Alpalcas or something.

e-Sex???

[attobyte]

Please tell me they didn't patent e-sex....

PLEEEEEEEASE Please please NOOOOOOooooooo..... :)

Re:e-Sex???

[Monkelectric]

Please tell me they didn't patent e-sex....

I think you're talking about Teledildonics? ;-)

Get done with it, already!

[TopShelf]

Since he invented the damn Internet to begin with, why don't all these lawsuits and settlements just get redirected to award Al Gore??? Seems like that would save us all a lot of time...

I've got a great idea!

[the_mutha]

I wonder when someone will patent thinking and breathing. Geez. When will the madness end?

Re:I've got a great idea!

[cgranade]

I wonder when someone will patent thinking and breathing.
In today's society, finding a prior art for thinking would be tough, so I'd say that's a safe patent... breathing, now that's a different matter...

Thanks!

[DraKKon]

I would like to take this opportunity to say "Thank You" to the USPTO, for fscking up just about everything. Last I heard they revoked the Patent on Swinging Sideways, but crap like this still stands.

I thank you from the core of my anus.

semantics to the rescue!

[vena]

the patent office should just change every instance of "a system" to "this system"

problem solved!

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.

Re:Courriel

[Gyan]

Does this mean that my $2 million dollars in my PayPal account will be lost?

Are you from Nigeria, by any chance?

Re:they'll know we want a pizza!

[Vaevictis666]

the penny arcade crew knows what's up!

and here's a link that will still work when they put up friday's comic in 7-10 hours.

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!

e-patents

[cheebie]

From the headline, it appears that AT&T has patented the letter 'e'.

In related news...

[Hogwash McFly]

Amazon sues AT&T for suing PayPal and eBay with Amazon's 'One-Click-Sueing' technology. Full story at 11.

Covers E-voting?

[AmoebafromSweden]

Well, wouldn't that solve all the problems America have with their E-voting systems? Goodbye Diebold and others...

Patent system saving the free world who could have thought....

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.

Re:Frivolous McDonald's lawsuit

[ewhac]

"Hot stuff can burn you." Duh. However, there are three things to keep in mind about the infamous McDonald's coffee lawsuit:

• The burns were very serious, requiring skin grafts, because,
• McDonald's coffee was really fscking hot at 190 degrees Fahrenheit -- 22 degrees shy of boiling -- because they claimed it tasted better that way; and,
• Many other people had experienced and reported the same problem to McDonald's in the past, and they did nothing about it.

It was principally those factors that led the jury to find against McDonald's. McDonald's now serves their coffee at a cooler temperature.

Schwab

Scope of patent

[watchful.babbler]

The patent (USPTO link here) covers any system in which a purchaser provides credit information to a mediating party, who then approves the payment and provides authorization and an identifying value to the seller. IANAIPL, but this patent covers a whole lot of ground. Obviously, if you as an e-vendor are processing credit card claims yourself, the patent doesn't apply. But the patent pretends to apply to a whole set of services, an argument that doesn't to my untrained eyes seem to follow from the claims:

Another use for such a system is a gift or donation registration service. An entity seeking gifts or donations would provide a list of what it needed to the registration service. Entities wishing to make gifts or donations would call the registration service and the service would mediate a transaction between the donor and the source of the item to be given or donated.

Still other uses involve assigning available resources of a given type to clients who call for assistance. One example of such a system is a lawyer referral service. The referral service would maintain a database of lawyers and would assign lawyers to clients on a basis which assured that each lawyer would get a fair share of the referrals. The system would determine from the database which lawyer was to get the referral and would connect the lawyer with the calling client.

Additionally, a communications system may be advantageously used to mediate a transaction such as an auction. Customers could make bids. The communications system would validate the bids and provide them to the auctioneer, who would know only the mounts, and not the identities of the bidders. The communications system could then indicate to each participant the current highest bid and solicit new bids until a single highest bid remained. In some embodiments, the communications system itself might play the role of auctioneer. In such an embodiment, the transaction manager would keep track of the current highest bid, would inform the participants of that bid, and when bidding had ceased, would complete the transaction with the highest bidder.

eBay itself seems to be safe as (from what I understand of the auction site) it doesn't handle any payments directly, PayPal excepted. The claim over a lawyer referral service doesn't make much sense to me, since it doesn't suggest that the mediating service handle billing and payment, while the gift service ... well, it seems a stretch to call a recipient of a gift a "vendor" (as in claim 1).

I remember a book from several years ago in in which a cyberpunk lawyer (it was a very strange piece of fiction, yes) used the theory of adverse possession (What's that?) to claim title to a piece of intellectual property left unimproved by its owner. I'm starting to think that implementing such a theory in IP law, as insane as that is, would be an improvement over the current situation ....

Re:Scope of patent

[justMichael]

...covers any system in which a purchaser provides credit information to a mediating party, who then approves the payment and provides authorization and an identifying value to the seller.

This could possibly be the saftey net for most e-commerce sites.

Most sites collect the card info and pass it off to the processor (mediating party) and get an approval (authorization) so this "should" not be covered under this patent as the customer does not directly provide information to the mediating party.

Of course I'm no lawyer, so I could be wrong.

ATT patent is without merrit

[Anonymous Coward]

If you read the patent, it talks about using telephone numbers, etc.

PayPal does not use telephone numbers as part of their security mechanism.

Re:I can't fucking believe this crap. I'm outta he

[jpmorgan]

Tell the Indians they can deal with this bullshit. I'm going to grow Alpalcas or something.

No you're not. I've got a patent on that:

Claim 1. A method by which you tell the Indians they can deal with this bullshit.
Claim 2. A method by which you grow Alpalcas.
Claim 3. Or something.

(OT.) Re: Get done with it, already!

[cgranade]

Lovely. Yet another attempt to bash Gore over a statement he never made. Gore said that he is the father of the Internet, from the perspective that it was his bills that gave DARPA the funding it needed to create the Internet. Whether or not this meant he was the Father of the Internet is highly debateable, but at the very least, he did not say that he invented the Internet, despite what the O'Riley's of the world would have you believe.

Re:(OT.) Re: Get done with it, already!

[GreyPoopon]

Lovely. Yet another attempt to bash Gore over a statement he never made. Gore said that he is the father of the Internet, from the perspective that it was his bills that gave DARPA the funding it needed to create the Internet.

Well, the transcript doesn't lie...

CNN "Late Edition" Transcript:

BLITZER: ...Why should Democrats, looking at the Democratic nomination process, support you instead of Bill Bradley, a friend of yours, a former colleague in the Senate? What have you to bring to this that he doesn't necessarily bring to this process?

GORE: ...During my service in the United States Congress, I took the initiative in creating the Internet. I took the initiative in moving forward a whole range of initiatives that have proven to be important to our country's economic growth and environmental protection, improvements in our educational system.

Now granted, he doesn't claim to have INVENTED the internet. Instead, he claims to have CREATED it. What he REALLY did in 1986 was articulate somebody elses vision of widespread connected computing, and he introduced a follow-up bill to facilitate more widespread access to the network. I don't want to take away from his accomplishments because they ARE significant, but claiming to have created the internet alludes to illusions of grandeur. So yes, Al deserves to pretty much be mocked for the rest of his career over that statement.

I think most people agree that, historically speaking, the Internet evolved as a result of the work done during the early 1970's on the ARPANET project, where TCP/IP was developed. The WWW concept, which makes the Internet much more useful, was developed primarily by Tim Berners-Lee of CERN.

Re:(OT.) Re: Get done with it, already!

[squiggleslash]

No, he doesn't claim to have created it. He claims to have taken an Initiative through the Senate, the Initiative being the one to create the Internet. That's all he claims.

If you want to argue he's a terrible speaker, I can't fault that. But it's absurd to suggest that he was trying to make people think that he, a politician, created the world's most significant network. That was clearly not his intention.

And Vint Cerf, who with Jon Postel can be genuinely described as one of the co-inventors of the Internet, certainly disagrees with the "He said he invented it" spin on the subject. To quote:

Last year the Vice President made a straightforward statement on his role. He said: "During my service in the United States Congress I took the initiative in creating the Internet." We don't think, as some people have argued, that Gore intended to claim he "invented" the Internet. Moreover, there is no question in our minds that while serving as Senator, Gore's initiatives had a significant and beneficial effect on the still-evolving Internet. The fact of the matter is that Gore was talking about and promoting the Internet long before most people were listening.

I think Gore is being unfairly maligned here.

Re:(OT.) Re: Get done with it, already!

[GreyPoopon]

No, he doesn't claim to have created it.

The way he worded his response can easily be misconstrued to mean that he thinks he created it. A very poor choice of words.

But it's absurd to suggest that he was trying to make people think that he, a politician, created the world's most significant network. That was clearly not his intention.

To be honest with you, I wouldn't put anything past a politician. While it's most likely that his wording was just poor, it's not entirely impossible that he had some hope that some of the less educated people out there might actually believe he created the thing and think he was the most brilliant man alive. A bit far-fetched perhaps, though. In his defense, if you look at his exact wording, it appears he was having a bit of trouble coming up with proper phrasing.

And Vint Cerf, who with Jon Postel can be genuinely described as one of the co-inventors of the Internet, certainly disagrees with the "He said he invented it" spin on the subject.

Although Vint was certainly one of the REAL figures behind the creation of the internet, his opinion on this matter is really irrelevant. What matters much more is public opinion.

I think Gore is being unfairly maligned here.

If he weren't a politician, I'd agree with you. But in the race of politics, Democrats are always looking for something to harp on Republicans about, and Republicans are always looking for something to pin on Democrats. Both of the Bush presidents get nailed for not being able to coherently express their thoughts. Clinton, probably one of the most eloquent of our Presidents, will always be remembered for "I didn't inhale" and his rather entertaining responses to questions in the Monica Lewinsky scandal. Why should Al be exempt from all this?

Re:(OT.) Re: Get done with it, already!

[Zeinfeld]

Now granted, he doesn't claim to have INVENTED the internet. Instead, he claims to have CREATED it. What he REALLY did in 1986 was articulate somebody elses vision of widespread connected computing, and he introduced a follow-up bill to facilitate more widespread access to the network.

No, he claimed to have taken the initiative to get the funding for us. In that he was entirely correct.

If there is anyone who has a right to get upset about the issue it would be Vint Cerf, Tim Berners-Lee and fifty to a hundred other people like me who are only known in the business. I do not know one single person with the right to make that complaint who made it.

This whole issue was a Karl Rove manufactured issue just like the stories he planted that Ann Richards is a lesbian, the claims that McCain is psychotic, calling in the police to investigate a bug found in his office he later admitted planting himself. There is a reason Rove was fires from the Bush mkI campaign.

In a little under a years time the issue will be whether Karl Rove is allowed to pull another smear stunt, get Dufus elected or otherwise installed and proceed to work out whether an invasion of Syria or Iran will pay the biggest dividend at the polls.

Re:(OT.) Re: Get done with it, already!

[Zeinfeld]

Gore's role had nothing to do with DARPA. DARPA had the funding and created ARPANet three years before Al Gore was elected to Congress.

The ARPANET was a research project to design a network. The funding for ARPANET was about to end.

The Gore bill did much more than simply continue the original research funding, it was funding for a network to be used as a tool by academics.

The term Internet predates Gore's interest, but not by much. Without the funding of the US govt the Internet would never have existed, the ARPANET backbone would have been shut down and we would all be using DECNET, SNA or OSI.

The result would have been very different.

Innovation Will Move Offshore

[Anonymous Coward]

This insane contention over software and business process patents has created an extremely hostile environment for innovation. The inevitable result is that new business and innovation will move to some other nation.

Let this be a lesson to anyone in Europe. Keep killing those software and business patent 'harmonization' attempts. This has simply become a big government shakedown racket.

The more I think about it, the more this looks like the way the Roman Catholic church used to sell indulgences. Basically it's a license by those in power to print money and shower monopoly on the 'favored'. It doesn't cost the government a cent (except for clogging the court system and they will just extract that cost from our hides).

Eminent Domain?

[braddock]

Shouldn't there be a concept of eminent domain that applies to patents? I mean, this patent seems broad enough to severely criple the internet economy. If my house was in the way of an information super highway on-ramp, it would be knocked down before I could say "private property".

-braddock gaskill

Re:Frivolous McDonald's lawsuit

[ReaperOfSouls]

McDonald's coffee was really fscking hot at 190 degrees Fahrenheit -- 22 degrees shy of boiling -- because they claimed it tasted better that way; and,

Have you actually ever made coffee before? Here is the general recipe. Boil Water and pour through ground up coffee beans...

In general there should be a reasonable expectation that the coffee is close to boiling since that is how coffee is generally made. This was not a problem with McDonalds but a problem with people who have no consept of the idea that you are responsible for your own actions. The never ending Tobacco lawsuits, Fat lawsuits are just a continuation of the principle, that common sense has no place in our courts.

Re:Can anyone think of prior art?...

[ThenAgain]

I can. I clearly remember mediating a transaction using a communications medium WELL BEFORE this patent was filed. I purchased a plastic soldier with a parachute attached to it's head at a Toys-R-Us. I mediated the transaction using a communications medium known to the technically minded as "English." It's a shame I didn't retain the documentation. Guess I'll have to let AT&T keep the patent.

Joy...

[thenextpresident]

As someone in the ewallet industry developing a new product that is different from other ewallet solutions, this is slightly disturbing. To think that a common concept such as accepting a credit card is patented. Of course, AT&T will have to go after all those credit card terminals now, because they all do the same thing. A consumer and a merchant processing a credit card through a trusted third party (the one leasing the terminal to the merchant).

However, seeing as my company is small, I have no real worries. Oh, sure, they may sue once they have something big to sue for, buy by then, I can afford to fight back. Hopefully, PayPal will fight for me. By fighting AT&T's patent, they could make it difficult for AT&T to sue for it in the future.

Of course, PayPal could also just make a deal, and this won't get taken care of in court.

Oh, the fun of e-commerce. You know, makes me want to patent some of my ideas, not to sue people, but just to make sure people don't sue me or my company. Patenting to defend yourself...hrm, maybe I could patent that? Of course, that is probably been said on /. before.

Re:ATTgoing down hill?

[surprise_audit]

I'd prefer to think that AT&T are concerned about the way voters rights are being hijacked by a few eVoting machine companies... If they really own a patent on evoting machine, maybe the next election will be honest.

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

Re:Western Union should sue

[waveclaw]

Ecclesiastes 1:9

<OB_SOUTHPARK:BUTTERS>

Translation into American:

"the Simpson's did it."

</OB_SOUTHPARK:BUTTERS>

I think I'll patent applying for silly patents....

[venom600]

...that ought to put an end to this kinda crap.

Where's the surprise?

[djupedal]

AT&T has the bridge...why is everyone surprised they're trying to control the toll fees?

The real facts.

[AzrealAO]

McFact No. 1: For years, McDonald's had known they had a problem with the way they make their coffee - that their coffee was served much hotter (at least 20 degrees more so) than at other restaurants.

McFact No. 2: McDonald's knew its coffee sometimes caused serious injuries - more than 700 incidents of scalding coffee burns in the past decade have been settled by the Corporation - and yet they never so much as consulted a burn expert regarding the issue.

McFact No. 3: The woman involved in this infamous case suffered very serious injuries - third degree burns on her groin, thighs and buttocks that required skin grafts and a seven-day hospital stay.

McFact No. 4: The woman, an 81-year old former department store clerk who had never before filed suit against anyone, said she wouldn't have brought the lawsuit against McDonald's had the Corporation not dismissed her request for compensation for medical bills.

McFact No. 5: A McDonald's quality assurance manager testified in the case that the Corporation was aware of the risk of serving dangerously hot coffee and had no plans to either turn down the heat or to post warning about the possibility of severe burns, even though most customers wouldn't think it was possible.

McFact No. 6: After careful deliberation, the jury found McDonald's was liable because the facts were overwhelmingly against the company. When it came to the punitive damages, the jury found that McDonald's had engaged in willful, reckless, malicious, or wanton conduct, and rendered a punitive damage award of 2.7 million dollars. (The equivalent of just two days of coffee sales, McDonalds Corporation generates revenues in excess of 1.3 million dollars daily from the sale of its coffee, selling 1 billion cups each year.)

McFact No. 7: On appeal, a judge lowered the award to $480,000, a fact not widely publicized in the media.

McFact No. 8: A report in Liability Week, September 29, 1997, indicated that Kathleen Gilliam, 73, suffered first degree burns when a cup of coffee spilled onto her lap. Reports also indicate that McDonald's consistently keeps its coffee at 185 degrees, still approximately 20 degrees hotter than at other restaurants. Third degree burns occur at this temperature in just two to seven seconds, requiring skin grafting, debridement and whirlpool treatments that cost tens of thousands of dollars and result in permanent disfigurement, extreme pain and disability to the victims for many months, and in some cases, years.

Excerpt from: Courtesy Legal News and Views, Ohio Academy of Trial Lawyers

Also see Van O'Steen and Partners

Newsaic : Mirrow Law

Re:The real facts.

[Bob9113]

[Many examples of McDonald's not taking accountabillity for the coffee issue]

Reports also indicate that McDonald's consistently keeps its coffee at 185 degrees, still approximately 20 degrees hotter than at other restaurants. Third degree burns occur at this temperature in just two to seven seconds, requiring skin grafting, debridement and whirlpool treatments that cost tens of thousands of dollars and result in permanent disfigurement, extreme pain and disability to the victims for many months, and in some cases, years.

So what's your point? Ford sells cars knowing full well that those cars are capable of killing the driver and numerous other people in the vicinity.

But McDonald's sells really hot coffee?

So is Ferarri liable for selling really fast cars?

Is Pontiac liable for selling the new GTO, which is really fast and doesn't have a compensatory increase in handling?

In practice, I guess the answer is yes - if lots of people buy the GTO and then slide it off a freeway interchange, Pontiac will be held liable. I see that as a bad thing. I prefer to make my own choices about what I believe is safe.

Should parents be allowed to sue their ISP for making pornography available to their children? Should the RIAA be allowed to sue 2600 for making available a tool which can be used to crack DVD encryption?

Who should be liable? The company that makes a potentially dangerous product available, or the person who uses it dangerously?

Who should be liable? The person who makes DeCSS available, or the person who uses it to pirate DVDs?

Who should be liable? The company that sells really hot coffee, or the 81 year old that tries to drink it while driving?

The very reason the McDonald's case comes up so frequently is because it is currently the canonical example of where the dividing line between personal accountability and public protection is crossed.

Me? I'm with McDonald's (and 2600) on this one. I would much rather have the freedom to buy a gun and shoot myself in the foot.

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.

Re:Frivolous McDonald's lawsuit

[Oddster]

In general there should be a reasonable expectation that the coffee is close to boiling since that is how coffee is generally made. Actually, the court involved in this case determined otherwise. I believe the court determined that the expected temperature for hot coffee is either 120 or 140 degrees F, whereas McDonald's was serving coffee between 180 and 200. This was (partly) the grounds for the ruling - nobody should have to expect that the coffee being *served* to them is near boiling, as in normal home-brewing, it never reaches near that degree.

USPTO - my corrective actions

[paiute]

Some time ago I was looking into the USPTO job openings. (Aside - They are always complaining that they can't get enough examiners, that they don't have enough money, they can't retain employees, etc.) It occurred to me that one of their main problems is that they require everyone they want to hire to be in the DC area and drive to work every day in that traffic.

Why not distribute the examination positions around the country? Submissions are mostly electronic now, at least at my company. I'd take some training - even if I had to travel to DC for it - to look over patents and applications in my specialty and be paid per piece. Maybe with thousands of part-time examiners to complement the regular staff, more specialists would be available to point out prior art way before it gets to the lawsuit stage.

Oh yeah - remember, this is my IP. It has no Unix code in it.

Re:Frivolous McDonald's lawsuit

[Karadryel]

This was not a problem with McDonalds but a problem with people who have no consept of the idea that you are responsible for your own actions.

IIRC, the issue wasn't just that the coffee was too hot. The coffee *was* too hot (as other replies have posted here, you don't actually keep the water at 212 to make coffee, so it should be cooler), but beyond that McDonald's had received similar complaints about the same issue and (roughly) paid them off via settlements. Unsurprisingly, their records of those settlements made it much harder to argue that they didn't know the coffee was too damn hot.

The damages weren't recompense, they were punitive. McDonald's had a documented history of ignoring this issue and people being burned, so the courts encouraged them more formally to fix the problem.

The courts are screwed up in many ways, as I think anyone will agree. However, the perception of how screwed up they are is affected also by the sound-byte culture that's reporting these cases and the 15-second attention spans that're listening. The less information you have, the easier it is to argue that it's stupid/wrong.

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.

Re:I am so glad,

[Mr. Troll]

Is it just me or does this seem to cover all business everywhere.
<br>
<br>
<i>
mediation of transactions by a communications system</i>
<br>
<br>
Just think about that phrase for a moment. I mean, LANGUAGE is a system of communication-----pardon me while my head explodes for the stupidity of this---

What about Western Union?

[mabhatter654]

Surely they were "electronicly" transfering funds long before 1994?

zerg

[Lord Omlette]

Read the letters section of this week's Economist, the USPTO claims "Patent reform pending".

Good grief

[emarkp]

I e-think I'm going to be e-sick.... (apologies to Foxtrot)

Prior art a gogo....

[Felinoid]

A patent on online transactions issued on 1994?
CompuStore dates back to what 1980s? 1970s?
Anybody use Fantacy plaza? I bought a book on how to make a CBB (Computer Bullitan Board.. I know.. BBS but it's what the book calls em) back in like 1983 or 84 a decade before this patent was issued.

By the sound of it looks like they are trying to clame the transaction of all forms of data.

FIDONET, Xmodem, TCP/IP.

Maybe it's just a patent on database interaction?
Ok I'm at a loss but this seams highly likely to have some prior art some place.

Yet annother technical patent so the patent officers wouldn't actually know what they are signing off on.

This is why we need a moratorium on Internet patents. So the general public (or at least public officals) can catch up.
Same with Internet laws...

IP and the loss of all that is good

[Anonymous Coward]

This crap is going to destroy all that is good in technology unless someone puts a stop to it soon. It has alreay gotten to the point where people can't even HAVE an idea without getting sued. It's the American Way(tm)!

Here's what I see about the US right now:

-Individual rights? Nope. That could possibly infringe on the rights of a company or other profitable organization.

-Corporate liability? Nope. Companies go bankrupt all the time and STILL manage to take home record wages for their executives.

-Government representation? No f*in way. The only thing your government represents is itself and the interests of the businesses that support them.

Get a grip America(tm), you are losing control of your own machine.

not so fast AT&T...

[some damn guy]

They obviously forgot about MY patent (#101,936,345)

"A method of maximizing the returns of any large-scale finanical-enrichment scheme which utilizes courtroom-based justice-mediated settlements as a method for increasing cash flow, increasing the possiblities for success through the aquisition of patents for the most extremely fundamental and obvious aspects of every-day existence."

Nice try though.

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.