eBay in 'Buy It Now' Patent Dispute

smooth wombat writes "The Office of the Solicitor General of the United States has filed a brief with the Supreme Court, taking the side of MercExchange who is in a patent dispute with eBay over eBays Buy It Now feature. Two lower courts have already upheld MercExchange's patents including finding that eBay had willfully infringed on the Buy It Now patent. Later this month the U.S. Supreme Court will hear oral arguments. The Office of Solicitor General is arguing eBay should be barred from using Buy It Now due to the decision of two lower courts that upheld MercExchange's patents. eBay is arguing that infringements should not automatically result in injunctions and shutdowns."

Comments

The Details

[eldavojohn]

What MercExchange LLC (US) has are a handful of patents that are titled as "consignment nodes" which seem to be completely centered around electronic auctions and commerce.

Where I think eBay is in trouble is that in a few of these patents, MercExchange references the idea of two different specified prices, with "buy at" or "sell at" similar to eBay's "Buy it Now" price. Taken from their patent on dynamic pricing information:

The bid control 614 may provide a link to a web page that allows a participant to place a "buy at" or limit type order to bid into a dynamic pricing system. Here, for example, the navigational dynamic instance may appear at the sub-sub-topic or brand level and the bid control 614 may provide a link to a branded web page 632 of a brand participant that is participating in a dynamic pricing system.

There is a lot to read in their patents but the reason this case is so compelling is that MercExchange patented a very descriptive and complete dynamic pricing scheme and hierarchy to auctioning online in patent US6856967. I'm very confused as to why the date on the patent reads 2005-02-15 unless this is a renewal date.

I'm not a lawyer but I do wish that articles covering patent cases would link to the actual patent documents themselves so that the public can become aware of the extreme legalese that enshrouds patents.

What will be interesting is what the lawsuit may entitle MercExchange to receiving. eBay has had this feature for quite a few auctions and I wonder if MercExchange is going to demand a cut of eBay's cut for each auction transaction completed where this feature was available. That's quite a bit of cash.

Honestly, it looks to me like this will hold up in court. Any real lawyers out there have any comments to make? I'd ask you to read the patent and tell us what you think but I lack the $250/hour you charge.

Re:The Details

[dnoyeb]

How is this different from a market order or a limit order? Are they going to sue the NY exchange or the NASDAQ next?

Re:The Details

[LeonGeeste]

It's not just that; the patent in the story covers every single retail outlet in the world. All of them have "buy it now" prices for their merchandise.

Re:The Details

[PortHaven]

It's all fuckin' bullshit.

In fact, there is ton of prior evidence. Shoot, I myself have said "I'm selling my xyz thing, to whoever offers me the most for it. But if you give x $$$ I'll give it to you now."

I don't see the validity of patents like these. The workflow already existed. Just cause it's incorporated in a different medium does not seem to have validity before my eyes.

It's crap, everyone knows it....and in some ways, I am just waiting for enough of these crappy patents to happen that we say !@#$% the whole patent system and re-write the whole damn thing.

Re:The Details

[KarmaMB84]

The patent seems rather focused on e-commerce and on there being both an auction (best offer) and a "direct buy" (buy it now) price. Retail outlets online or otherwise generally aren't auctioning items so their price is just that: a price. Since there's no auction price or otherwise, then this "direct buy" price wouldn't infringe. The killer for eBay is that they actually negotiated with the patent holder; therefore, they knew about it and are infringing willfully.

Re:The Details

[russotto]

"Buy it now" isn't a "limit type order", which would be on the bidder side, not the sellers side. It's a slight variant on "or best offer" -- that is, "I'll sell this for $50 or best offer", the variant being that the $50 offer is only good until the first non-$50 offer. The idea that this is patentable merely because it's done as part of an online auction (as opposed to an online classified ad) is ludicrous (like much of the rest of the patent system).

Of course, MercExchange has dressed this simple idea up in excess verbiage to disguise the fact that it's neither novel nor non-obvious. EBay would probably rather not point that out as they have a bunch of similar patents on non-novel ideas.

Re:The Details

[servoled]

I'm very confused as to why the date on the patent reads 2005-02-15 unless this is a renewal date.

The 2005-02-15 date is the issuance date, i.e. the date at which the application became a patent. The real date(s) you want to look at is the application date (and the priority date if there is one). In this case, the application date is 1999-10-21 and there is no priority date. Therefore, to qualify as prior art someone would have to have been published or sold to the public prior to 1999-10-21.

Re:The Details

[terrymr]

You're free to offer any amount you like to buy something in a store, most store staff will look at you funny, but who hasn't tried to haggle for a free something when buying a high $ item.

The price on the tag could be considered the "buy it now" price at which the store owner has already indicated they'd sell.

Re:The Details

[ClamIAm]

How is this different from a market order or a limit order? Are they going to sue the NY exchange or the NASDAQ next?

This is the great thing about software patents. Change three words and voila, a new patent.

Re:The Details

[eweaver]

I'm not a lawyer, exactly, but I have some law school under my belt.

That said, I think the patent in question would be US5845265: "That when a bona fide purchase price is tendered by a participant 900 or another retailer 902 the legal title to a good as represented by the record will transfer to the buyer with an immediate or nearly immediate finality to the transaction." That is, the listing closes the instant the fixed price is met.

Note that this is one of the earlier ones listed; the patent you gave actually references Ebay as prior art.

There are a couple of interesting things here. What I find most unique in MercExchange's patent constellation is the idea of virtual transfer of ownership of items among possibly competing virtual stores which all exist within the same patent system. This would be just like ebay stores, except they would exchange goods electronically between each other and relist them in hopes that better advertising or a new virtual store location will bring a better sale. Also, they have some fairly hilarious stuff about using a "sound blaster" for "audio stream cues" of an actual auctioneer announcing bids. Thanks, but no thanks.

I take the limit price that you mention as a buyer submitting a quantity and maximum price for an item, and if a suitable item is posted at a below price, a buy will automatically take place. This is sort of a reverse auction, not a buy it now.

That aside, I side with Ebay regarding the injunction issue. Companies which purely license patents, as opposed to create products, should not be allowed to halt the businesses of operating companies until the patent dispute is finalized. That's not necessarily how the law sees it, though.

In my quick review I didn't see anything about combining fixed price offerings with auctions, and especially the ebay model of offering the fixed price only until a lower bid is submitting, at which case the fixed price offer is withdrawn and a regular auction continues. I think this makes ebay's system sufficiently unique. I'm sure ebay's lawyers are on top of that one, though.

All that aside, patents suck ass. And it's a slow day at work.

~e

Re:The Details

[jacksonj04]

I believe this is correct - the 'offer to tender' is the price on the label. There's nothing which says it actually has to be sold for that price.

Re:The Details

[cwgmpls]

ALL retail sales are an auction with the list price being the "buy it now" price. That is called the "free market". I walked into Best Buy last year, told them I wanted to buy a washer, dryer, fridge and stove all at once, and asked if would they take 10% off of the total list price for me. The salesrep looked through his books, and agreed. In some countries, negotiating over listed price for consumer products is common practice. In the U.S. it isn't -- except, oddly, for cars.

Certainly the sticker price for a car is the "buy it now" price, even though the vast magority of people will make a counter-offer that the car dealer will accept.

Re:The Details

[shaitand]

"The patent seems rather focused on e-commerce and on there being both an auction (best offer) and a "direct buy" (buy it now) price"

This concept is not exclusive to e-commerce and is likely as old as the concept of auctioning. It is certainly as old as the concept of haggling. Regardless, an existing concept does not become unique or non-obvious simply because it is implemented online.

Any practice that has been used in trade for over 100 years is obvious and has over 100 years worth of prior art. Using such a practice on a website does not suddenly make it a new patentable practice.

How can someone even claim "buy it now" is a tangible invention in the first place? Concepts and ideas are not supposed to be patentable!

Re:The Details

[OnlineAlias]

You are so right. Back before Ebay even had a "Buy it Now" I would look at an auction and think, "Damn, I wish I could just buy that now".

Maybe there should be a clause in the patent code that says, "if it is so stupendously obvious that any fucktard would have eventually thought of it you can't patent it."

Re:The Details

[jaaronc]

Exactly. In classified ads, it's common practice to list a price as "$xxx OBO" (OBO meaning Or Best Offer)... in other words, buy it now for $xxx, or put in your bid. Making this common practice a part of an online auction site seems pretty obvious to me, so what's with giving out a patent for it?

Re:The Details

[jaaronc]

There is. One requirement of a patent is that it be non-obvious.

Re:The Details

[hey!]

Every invention involves using using other things that are already invented. Otherwise it wouldn't be possible ot make head or tails of them.

It's using those pieces in novel ways that constitutes invention.

Consider: a lever is one of the "basic machines". It occurs in copious numbers in a wide variety of machines. But supposing I find a place in the drive train where adding one doubles fuel economy. Would it not be an invention because it combines two things that already existed?

By analogy (which is how legal precedent works after all -- analogy to paradigmatic cases), just because some commercial mechanism already exists doesn't mean that you can't patent adding that mechanism to a business method, provided it hadn't been done before or is not otherwise obvious.

Re:The Details

[AlterTick]

It's all fuckin' bullshit. In fact, there is ton of prior evidence. Shoot, I myself have said "I'm selling my xyz thing, to whoever offers me the most for it. But if you give x $$$ I'll give it to you now."

Indeed, if you've ever looked through the classified ads and seen something listed for sale at "$50 OBO", then you are looking at an informal auction with a Buy It Now price. The idea that they can patent it because it is via an automated web-based system is just more of the same asinine "[old idea]...on a computer" patent nonsense.

Re:The Details

[davebarz]

Well, I am not a "real lawyer," but I am a law student.

The district court and the Court of Appeals have already decided that eBay is infringing the patent. The patent is a business method patent, and as with most business method patents, it is fairly obvious. Nevertheless, the Patent Office is in the unfortunate habit of granting these stupid patents.

So, eBay is infringing. The Supreme Court will not even be reviewing that fact. The real question in the case is whether or not MercExchange can get a permanent injunction, disallowing eBay from using the Buy It Now feature until they reach a licensing agreement.

The district court sided with eBay on the issue, saying that the hardship an injunction would create for eBay outweighed MercExchange's property right in their patent.

The Court of Appeals reversed, citing the "usual rule" that a permanent injunction would be granted unless there are "special circumstances" involved.

The Supreme Court is reviewing the question of whether a court should presume that an injunction should issue, or whether the court should look at the individual case and decide whether it is necessary and/or appropriate to issue the injunction. More specifically, the sole question the Supreme Court has certified is:

"Whether the Federal Circuit erred in setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement."

Here is the docket for the case, the Question Presented in the case, and a great summary of the arguments for either side.

Re:The Details

[DRJlaw]

The parent post is incorrect.

The patent issued on 2/15/2005. The patent was filed on 10/21/1999. There is no disclosed priority date that predates the filing of the U.S. application.

To "qualify as prior art"*, someone would have to show that the claimed invention was "known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent." (35 U.S.C. 102(a)). Since you cannot know when the claimed subject matter was invented simply by looking at this patent document, you cannot simply look for anything published prior to 10/21/1999. You must look for the earliest references that you can find, and if the only art you can locate is within a year of this date, there is a reasonable chance that you are throwing your money away challenging the patent.

More commonly, someone could also show that the claimed invention was "patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States." (35 U.S.C. 102(b)). This provides you with a known date to beat, 10/21/1998, and ensures that the examiner in a reexamination or the judge in a court proceeding will reach the meat of whether or not the claim is anticipated and/or obvious.

The subject matter of this patent could very well have been sold to the public prior to 10/21/1999 and not be prior art. It could have been sold in the U.S. from 10/21/1998 onwards and not be prior art. It could have been sold in Canada in the early 1990s and it would not be prior art, at least in the United States. Posters on Slashdot use "prior art" the way my parents use "CPU" to refer to the entire big beige box. Stop and think about how you think about people like my parents. Then sit down and take some time to actually read the patent statute.



*Things do not "qualify as prior art" simply because they occurred on a particular date. 35 U.S.C. 102 has a rather extensive list of what is and what is not prior art, and at what time prior art events have to have occurred. There are five more subsections that are even more complex, in general, than the ones cited above.

Re:The Details

[thparker]

You can't patent ideas and concepts after all, patents are for tangible things.

Oh, the good old days. Concepts have been fair game for years and things just got worse last September. The courts have said you can't patent abstract ideas, but business method patents have been patentable for years.

Recently, the patent office issued a ruling that removed the so-called "technological arts" requirement. For many years, business method patents have been limited by this requirement -- essentially, if a business method doesn't involve a technology component, then it doesn't qualify. In September, the appeals board voted in favor of a compensation method that can worked out with pencil and paper. This opens the door for even more business method patents.

If the current system existed back in the 40s, the only drive-thru in the country might be Red's Giant Hamburgs.

Re:The Details

[SillyNickName4me]

In the mid 90s, I went to a big store near where I live to buy a TV. Another nearby store was sellig the same TV for approx 10% less, but their service sucks.

I made the store where I bought it an offer of 7.5% below their price, and they accepted. THey asked why I did that, but noone looked funny at me, rather, the clerk had to check with his boss and then made the deal..

Oh, and if you ever get to places in South East Asia, people won't look funny at you at all for sucha thing, rather, they laugh their ass off behind your back for not doing it (you often end up paying twice or more of what you should)

At any rate, that such concepts can be patented is one of the best signs I've seen so far that the USPTO approves things that it really really shouldn't, and again makes me doubt the level of understanding and intelligence of those who approved this patent.

Prior art + prior well known motivation == obvious in the legal sense. Both clearly exist in this case (not to mention the concept is obvious in the common sense of the word as well)

Re:The Details

[Zeinfeld]

This concept is not exclusive to e-commerce and is likely as old as the concept of auctioning. It is certainly as old as the concept of haggling. Regardless, an existing concept does not become unique or non-obvious simply because it is implemented online

The root of the problem here is that the USPTO definition of 'obvious' is not the usual understanding of the term. I did an essay about this recently

In particular the USPTO thinks that taking an obvious idea and taking the obvious to any idiot step of doing it on the Internet using standard engineering approaches merits a state sponsored monopoly.

What I am trying to get at here is that there are three tracks to patent reform. The first is write new rules to make the patent system more relevant to the modern economy. The second is to abolish patents altogether. The third is to make the USPTO implement the same longstanding principles that other PTOs have always enforced and the USPTO did a good job of from about 1930 up till the 1980s.

I think that the first track is certainly necessary, some changes are needed. But this is going to take a lot of time, will be very complex and will require a lot of political capital. The second track ain't going to happen. The third track is immediately implementable and gets 80% or more of what the industry desperately needs.

At present the patent system is not only failing the software provider, it is also failing the legitimate inventor with a legitimate, defensible invention.

Non-obvious?

[Anonymous Coward]

Whatever happened to the whole "non-obvious" part of a patent?

Re:Non-obvious?

[Pofy]

You missed the digital revolution. Today, as long as you add "with a computer" or "on the internet", everything turns completely non-obvious and is thus patentable. Just take any ordinary activity you can think of and slap on "with a computer". Instant patent!!

Re:Non-obvious?

[kuwan]

Well, duh! It's on the Internet! Nobody in the world would ever think to do that! New medium equals new patent!

Like email on a cell phone. I should patent that! Errr, wait, did someone do that already? OK, I'll patent auctions in space and email in space, I don't think anyone's done that yet.

It's all just a load of crap.

Re:Non-obvious?

[nickname225]

I'm a lawyer - although patents is not my area of expertise. I've been looking at the upcoming Supreme Court schedule and it is looking to be a banner year for patent cases. In addition to the Ebay case, which centers on the issue of the automatic injunction, there are several cases that will allow the court to review the USPTO practice of granting patents to business processes and algorithms. So this is going to be a very interesting year for patent issues in the Supreme Court. If they get it right - it will resolve many of these problems - of course if they get it wrong....

Re:Non-obvious?

[torokun]

I am not a lawyer, just a law student. This is not legal advice.

The nonobviousness requirement is a legal requirement that has a particular meaning in patent law. It's not the same as the ordinary words "not obvious".

Often people would take the words "not obvious" to mean "hard". But this is a mistake. For example, the term "non-increasing sequence" does not mean a decreasing sequence. It means a non-increasing sequence. Similarly, the term nonobvious simply means something not obvious, and doesn't mean it's necessarily very hard.

What it really means in terms of the law is that the invention would not be obvious to one of ordinary skill in the art, sitting in a room at the time of invention, with all the then-existing relevant references in the world arrayed around him. In practical terms, to be obvious, all the elements of the invention must have been disclosed at the time of invention in some reference, and there must be shown some motivation or reason to combine disparate references to create the invention.

For instance, if one reference taught a razor, and another reference taught a harvester with three blades and blade-guards, without more the invention of a modern three-blade razor would not be obvious, because there is no motivation to combine those references. Now, if the razor reference had said "I looked at some farming technology in developing the razor", you might be able to say it's obvious.

One problem in evaluating obviousness is that courts often improperly evaluate obviousness in hindsight, while the proper consideration is whether it would have been obvious at the time of invention. But on the other hand, it is harder to prove obviousness than other invalidity arguments, because it involves multiple references, and requires a motivation to combine them.

Re:Non-obvious?

[Danse]

Of course, a simple "buy it now" on an online auction seems obvious now. It is. Would this have been obvious in 1994? I would argue not.

The problem is that their patents are quite obvious to anyone who is a serious web developer (or any sort of developer at all really). They make them look technical and specific because they go into great detail about how a database and website actually works. But databases and websites already existed and were already being used in exactly the manner they describe. They just describe using them to accomplish something that was already being done millions of times a day all over the world, but on the web. You could claim that they were being innovative by coming up with this before it had actually been implemented, but it could also be argued (and quite strongly I believe) that many of these kinds of things hadn't been implemented because the web was still too young and not yet trusted or understood by enough people to make such a venture profitable, or at least that the first sites to start auctioning online could not yet support the level of robust development that would include every feature that people might want or use in the real world. So, I don't think that they should be allowed to patent something that would be quite obvious to anyone seeking to build such a system just because it was not yet profitable for anyone to do so. That just leads to a huge problem of speculative patents, which, coincidentally I'm sure, is exactly where our patent system is right now.

Wave bye-bye to karma...

[kbonapart]

Wait! Does this mean I'm going to lose the "Buyout" function in the AH in Og?

To be followed by...

[alexhs]

... a dispute about the patented concept of "internet commerce".

"critical mass"

[Saeed al-Sahaf]

Without getting into the actual validity of either of these groups of patents, I think these types of patent wars are both inevitable and good. They are inevitable with a system that allows for patenting the kind of obvious and basic things ours does, and good because eventually, the government and the large companies that hold sway over it may soon realize the folly of our current patent system, when everything becomes patented, and nobody can build or do anything without horrendously expensive and complicated licensing. The more patents and patent snits like this, the better. Only when the system reaches "critical mass" will it implode.

Re:"critical mass"

[LeonGeeste]

Without getting into the actual validity of either of these groups of patents, I think these types of patent wars are both inevitable and good. ...good because eventually, the government and the large companies that hold sway over it may soon realize the folly of our current patent system,

Oh, great, another one of these "bad thing X is *really* good because it could lead people to better prevent X" arguments. That rhetorical trick is good for scoring on sophomore girls who don't know any better, but not for serious intellectual discussion.

Re:"critical mass"

[Billosaur]

The more patents and patent snits like this, the better. Only when the system reaches "critical mass" will it implode.

Hate to tell you, but this is alreay at critical mass. Look at the number of big-time patent fights that are going on now:

• Lawyer insists Microsoft infringed antipiracy patent
• RIM, NTP and Patent Madness
• SCO Heading For The Edge?

The list continues to grow. Somewhere, someone is writing code in the warm little cocoon of ignorance and once they have released it into the wild, they will be set upon by flocks of hungry vultures^H^H^H^H^H^H^H^Hlawyers and will eventually be sued into backruptcy and destitution. Ah, it's a great time to be a programmer!

Buy it now - NOW!

[digitaldc]

This one involves eBay and a company called MercExchange LLC, which says eBay's popular "Buy It Now" auction feature violates patents held by MercExchange.

Solution, put the 'Buy it Now' patent on sale on eBay using the 'Buy it Now' feature for $50 million. Ebay will buy it then, and the problem is solved.

Perhaps not an injunction...

[ursabear]

I have not read the patent in detail. However, for a moment, assuming the article and summary are correct, then I think one of the big issues is whether or not a given business activity should be shut down/suspended when a patent challenger indicates infringement.

If eBay patently (no pun intended) infringed on the patent, then they must reach settlement with the patent holder, no doubt. But - I don't think the business activity should necessarily be shut down until such a settlement can be reached. (Please bear in mind that I'm over-simplifying to stimulate the point here...)

If a patent holder wishes to interrupt the business of an alleged infringer, there should be a fixed set of things that must occur before the alleged infringer must cease the patented activity or product. OTOH, two judges have already agreed that eBay is infringing. Are the judges' decisions enough evidence for suspension of activity or product?

Real store patent?

[ClockN]

So who owns the patent for selling items in the first place? Is the idea of having a store or a shop with item for sale inside with a price sticker patented? Quick somebody get me a patent attorney!

Waaah

[truthsearch]

eBay is arguing that infringements should not automatically result in injunctions and shutdowns.

"Yeah, we know we've been found guilty of using something illegally... but that doesn't mean we should be stopped from using it! C'mon!"

It won't go critical; it just becomes an oligarchy

[Harmonious Botch]

"...because eventually, the government and the large companies that hold sway over it may soon realize the folly of our current patent system..." Large companies will own the majority of useful patents ( when - on some rare occasion - some small company gets a good one, they will become a big company using the profits from the patent ) and will not want things to change. And governments will be influenced by the lobbyists hired by those companies.

So this is why...

[Saeed al-Sahaf]

That rhetorical trick is good for scoring on sophomore girls who don't know any better, but not for serious intellectual discussion.

This explains my inability to get laid in high school: It never occurred to me to discuss the politics of patent law with my dates...

erm ... shops

[the bluebrain]

Depending on how you lay things out, every vendor for the last, oh, 40'000 years (you know, since "you give club, I give sheepskin") has been "infringing" on this "patent". Basically what eBay is doing is they have a shop, on the web, where people can peddle their wares. The "buy it now" price is the selling price (the club, the sheepskin), and the "OBO" is covered by the auction logic.

What astounds me is that there is a person out there, who has managed to stand up on his hind legs, and is stating that this is his invention. How does this guy interface with other people? How does he stand being laughed out of every conversation where his job or his "abilities" come up? Is ripping off one of the rare successes from the internet bubble a legitimate career now? Do these guys have no pride whatsoever?

Re:erm ... shops

[the bluebrain]

I was thinking more of sociology 404. The stigma of the criminal seems to have morphed into the aura of the outlaw, sometime during the last century. Even more so if what you have done is not criminal, but merely criminally immoral. Seems that as long as you've got the moolah, you are, by definition, "good", and no doors are closed to you.

Workaround

[peaworth]

Workaround -
A button that says:
Buy it... wait... Ok, now

How is this an "Invention"?

[kuwan]

Patents should be issued for physical inventions - actual physical products that you can hold in your hand - a propeller-hat or Dippy Drinking Bird for example. Patents should not be issued for business methods - a.k.a. any idea that comes out of my ass at work. It's patents like these and the ones behind the Blackberry case that show that these types of patents are completely anti-productive and against the original purpose of the patent system.

Basically, they are existing ideas or "business methods" applied to a new medium. There's nothing novel or unique about them. Someone just said, Hey, you could do auctions on the Internet, let's patent that! or Hey, you can do email on a cell phone, let's patent that!. I might as well start applying for patents for Email in Space! or Auctions in Space! That'll make me rich.

These things are so stupid and obvious I'm surprised that Judges will uphold them. Technically I suppose they're probably just following the law and their hands are tied. But that just means that the law needs to be changed - fat chance of that though considering the lobbying power of the large patent holders.

Re:How is this an "Invention"?

[SomeoneGotMyNick]

Please Sir,

You should limit your statements to newspaper print only. You are violating my patent on editorializing via electronic media.

Re:How is this an "Invention"?

[Malor]

The reason this change was made is simple... it lets the bosses in the patent office, in the words of Dilbert, expand their tiny fiefdoms.

If more things CAN be patented, then more things WILL be patented. That means the patent office needs more people. Supervisors in the government are paid based on how many people they supervise. If they expand the job description of the bureaucracy they manage, that means raises, and eligibility for promotions into even larger fiefdoms.

Next up: patenting biological processes.

Re:How is this an "Invention"?

[cpt kangarooski]

No, actually it was the courts. The law is very permissive, but the courts had interpreted it rather narrowly for decades. Then, in the 80's, and especially the 90's, the courts decided to stop doing that. Since they were the ones with the rule against software and business method patents, when they stopped, the rule went away.

Re:How is this an "Invention"?

[bogie]

Yesterday my wife was telling me that she was talking with a group of people recently and they were all talking about things they have thought about inventing when they were younger. And also they commented how some of those ideas were actually turned into products. I told her they should have all filed patents. She said "Well you can't do that because you have to actually make a product. You can't just patent an idea or an idea about a method of doing something." I just smiled.

The average person has no idea fucked up the patent situation is in this country.

Re:How is this an "Invention"?

[canajin56]

A biological process can be patented. A gene can be patented, even if it occurs naturally. A corporation can look at your DNA, say "Hey, that's a neat gene, it might help cure cancer one day", and patent it. That way, if anybody ever discovers some medical cure based on that gene, or the protein it encodes, they can wait 5-6 years, then sue them for 125% of their profits for patent infringement.

The good news is that biological patents are granted special exceptions. A living being cannot be charged for infrigement of a patent that it violates naturally. So you can still breath if they patent breathing, and you can still grow new cells if they patent your DNA. Yay!

In other news. . .

[AcidLacedPenguiN]

In an effort to curb any patent infringement issues, Walmart Corporation removes cash registers in all stores opting instead for making customers wait 3 days and 12 hours and 39 seconds before paying for merchandise.

Business Method vs. Business Technology Patents

[Gallenod]

I can see patenting a cash register. That's technology someone had to develop and produce. But isn't claiming a patent on "buy it now" a bit like patenting the use of a cash register instead of the register itself?

If you can "patent" a method of doing business, isn't the first company to ever use a cash register entitled to receive business method patent royalties from all the copycats who started using them later?

Re:Business Method vs. Business Technology Patents

[Scarletdown]

I don't know if the auction is capped at the fixed price though. I'd assume so.

No. The auction is not capped at the BIN price. Once a bid has been placed (provided the reserve price, if there is a reserve has been met or exceeded), the Buy It Now option goes away, and the item goes to the regular auction format with no upper limits.

I myself have been pleasantly surprised the few times I have had items end up going for higher than what the Buy It Now was. And in a few instances, I have been amused to discover that the winning bidder in those instances ended up being the one who initially bid and popped the Buy It Now, paying more in the end than what he would have paid had he just made the purchase with BIN.

Re:Involve consumers

[KarmaMB84]

Should court proceedings hinge on who has the biggest customer base?

Patents -- the true evil arm of government

[dada21]

I'm anti-patent in every way (even for the drug companies). Patents were initially meant to help the individual invent. Instead, we see it being used as device used to create new legal force where none existed before -- and it is never used to protect an individual.

Look at any average device patented today -- cell phones, TV remotes, even your fob for your remote keyless entry. How many of these patents really protects something completely unique that was invented without using a previous invention as a source? How quickly do other companies use the exact same technique with a slight change to work around the patents of others, and then patent this technique with the change?

Patents can not work to help the individual -- there is no ability to fix this system. In the long run, this will work counter the original intent: instead of protecting individuals, it has created a cartel of patent attorneys who will be happy to help the ultrawealthy find ways to keep the average inventor out of the market.

Patents create incredible high costs to enter any market nowadays. When I sold paintball markets ("guns") at retail, I was amazed at the amount of lawsuits between various manufacturers all protecting the same basic idea. Do a search for "Smart Parts Patent" to see the most ridiculous patent around -- the electric switch.

Want to level the playing field? Just give up the patent schemes entirely. Let people admit that their inventions are based on the prior inventions of others. Making something better doesn't create a marketable product: the invention itself is only a small part of bringing something to the consumer. I believe the patent process is the reason we see fewer inventors and less research and development. $1 for R&D means $5 for the patent attorneys.

Re:Patents -- the true evil arm of government

[cpt kangarooski]

AFAIK, we've always allowed for patents on inventions that consist of improvements upon other inventions. Of course, the improvement patent is limited to the improvement, not the underlying invention it builds on. Why would we want to stop that? Such improvements, to be patentable, have to be novel and nonobvious just like any other patentable invention. And presumably we do want to encourage the creation, disclosure, and marketing of such inventions, right?

I'm against software and business method patents, but only because I don't think we need patents to encourage these things; those areas are very active anyway, at least for now.

Re:Patents -- the true evil arm of government

[0123456]

"Because lots of companies are going to throw millions of dollars into R&D when the company next door can just wait for them to produce something, then produce an exact copy."

Companies do that all the time.

Company A has a dozen patents on manufacturing widgets. Company B has a dozen patents on manufacturing widgets. Neither Company A or Company B can manufacture widgets without infringing, so they cross-license their patents to each other.

So patents don't prevent Company B from 'copying' Company A's products. They're just a government-mandated monopoly to prevent Company C from entering the market, because they have no patents to trade. Patents then become a subsidy to company profits and a major cost to consumers who have to pay higher prices than they would in a free market, nothing more.

Re:Patents -- the true evil arm of government

[Danse]

Either patent something new or pay the licensing fee.

Hard to patent something new if you don't have the cash or existing patents to defend yourself with. They can tie you up in very expensive litigation for years. Hardly an incentive for innovation. The patent system is out of control now. Someone needs to seriously reign it in. Getting rid of business-method patents, probably software patents, and going back to the working prototype requirement would be good starts. Raising the bar (a lot) for obviousness is essential as well.

Constitutional Import

[NoData]

I think one of the big issues is whether or not a given business activity should be shut down/suspended when a patent challenger indicates infringement.

Yeah, I think you've hit the nail on the head. This case would not be heard by Supreme Court unless there was a matter of law that needed clarification in regard to its constitutionality. From what I gather this is the only matter that the Supremes will be considering. From the article:

EBay filed an appeal with the Supreme Court, which will hear oral arguments later this month. In its filing with the Supreme Court, eBay argued that infringements should not automatically result in injunctions and shutdowns. The company also pointed out that MercExchange has not been in the online auction business since 2000, so eBay's use of Buy It Now was not sufficient to merit an injunction.

So it sounds like the issue is "when is an injunction a fair remedy?" Unfortunately, it does not sound like they will be considering whether business methods, virtual devices, etc. are patentable, which is of course what most Slashdotters are debating here. If someone has more detailed insight, that'd be great to hear.

Re:Constitutional Import

[dpille]

From reading this Amicus brief, it appears the issue is that the rule in the courts has evolved from authorization to issue injunctions "in accordance with the principles of equity" to a situation where a patent holder is entitled to an injunction "absent exceptional circumstances."
 
The brief makes a pretty good point about why that's not appropriate in terms of the financial services industry. I'm not sure that the fact that ebay has a ton of customers who could continue to auction things without a 'buy it now' price means an injunction would be inequitable. If ebay is considered a willful infringer, it seems like you have to enjoin them in circumstances short of huge disruptions to non-parties.

Patent Link

[Crilen007]

http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PT O2&Sect2=HITOFF&u=/netahtml/search-adv.htm&r=2&p=1 &f=G&l=50&d=ptxt&S1=MercExchange&OS=MercExchange&R S=MercExchange

Patent information.

Buy It Now and dealers are killing eBay

[smooth wombat]

While I know there are many on here who will say that these patents are bogus, eBay screwed up both by violating someones patent as well using the Buy It Now feature.

The article clearly states that eBay was in negotations to license this patent but negotiations broke off. eBay then went ahead, knowing that someone else held the patent to this service, and instituted Buy It Now anyway.

Further, Buy It Now is becoming the norm rather than the exception. When eBay started they were an online auction company. People put up stuff to sell and let the market determine the price.

Now, Buy It Now is overtaking the auction feature and dealers are holding sway. For example, I'm looking to add to my camera equipment. When I do a search for my particular type of lenses I get 11 pages back. Of those pages at least half are Buy It Now from dealers.

Do a search for lens accessories and 3/4 of the pages are from dealers. Camera cases? 90% of the listings are from dealers using Buy It Now.

I was fortunate enough to pick up a lens last weekend. I took a look at the bid history and checked the last person to bid (2 seconds before the auction closed). Sure enough they were a dealer and everything the person had for sale on their site was Buy It Now.

This is alot like flea markets nowadays. In the past the people selling stuff were like you and I. Now when you go there are dealers galore.

I'm not against the market system, that's what eBay was originally founded on. However, by allowing people, particularly dealers, to set a specific price, defeats the whole purpose of an auction.

Yeah, yeah, I know. If you don't like it, don't buy from the dealers. I don't. The point is that when dealers control the vast majority of the listings that will drive the price up for everyone else since there will be fewer true auction listings for people to choose from.

Personally I can't wait to see Buy It Now be done away with.

Re:Buy It Now and dealers are killing eBay

[scharkalvin]

Ebay is BOTH an auction house AND an online store. Dealers selling with buy it now are not really using the auction feature, but rather the online store. The problem comes with an auction that has both the biding AND buy it now enabled.

There is nothing wrong with the buy it now in an auction, provided that the feature dissolves as soon as the first bid above any possible reserve price is received. Also, buy it now should NOT be allowed (in an auction) when the reserve price is equal to the buy it now price (or less than it by an amount less than the bid increment). This case is NOT an auction, it is an online store, and the seller should be forced into such (with higher selling fees).

Finally Ebay should allow the buyers to have the search engine ONLY find auctions, online stores, or both at the buyers choice.

Re:Buy It Now and dealers are killing eBay

[CGP314]

Now, Buy It Now is overtaking the auction feature and dealers are holding sway.

Speaking as an eBay seller, it seems that eBay wants it to be this way -- at least for small items -- and I'm not happy. I, for one, would prefer to use the classic bid option to sell my photographs but with the way eBay nickel and dimes you to death, it's just too costly by the time I'm done with gallerly fees, category fees, initial price fees, final price fees and paypal fees. I'm hoping the ebay killer comes along soon so I can switch ships.

-CGP

add ".. on the internet" to fortune cookie

[GodWasAnAlien]

This is similar to the "add 'in bed' to fortune" joke.
Except this is the business model.

Add "on the internet" to your fortune or anything else.
It is patentable, unless someone beat to to it.

Examples:

Fortune says: "Don't wait for happiness, buy it now"
Patent: Buy it now ... on the internet

Fortune: Do not sell your horse, if you can instead sell you cat.
Patent: Online cat bidding system

Would it be possible...

[Blazeix]

Would it be possible to avoid ths entire dispute by having a button that had a programmed time delay of around 2 seconds? It would essentially be a "Buy it now" button, but it wouldn't be conflicting with other companies!

How about patenting "look both ways"?

[erroneus]

Right now I am unsure about whether or not I should be safe when crossing the street. Someone just might have patented the obvious "look both ways" activity prior to making an attempt at crossing.

"Buy it now" is just OBVIOUS and should be revoked as a patent. It's ridiculous that business methods are patentable in the first place. Who ever thought "You can't do business in the same way that I do!" was a good idea? Has someone patented the idea of "do a good service for your customers?" That would go a long way to explain why so many industries do not seem interested in good customer service.

I'm hopeful that the business method and software patents are continually blocked in the EU. The EU is our last real hope as possibly reversing the damage that has been done to the system in the U.S.

Re:How about patenting "look both ways"?

[erroneus]

that's another issue that bugs me.

I'm thinking I should patent the use of a crescent(r)(tm) wrench as a hammer!

Does it REALLY matter that much which tool you use? The whole "...with a computer..." rings like that joke where you add "...in bed" to the end of anything you read on a fortune-cookie (which I have already patented). ...one day I'll be best known for the guy who sat outside of the patent office and threw rotten fruits and vegetables at the people.

In other news...

[just_forget_it]

MerchExchange and Ebay are both being sued by the ghost of Adam Smith for Intellectual Property theft of "Economics."

Look over there!

[dtfinch]

Someone's using an innovative idea. Lets punish them!

Re:My new patent is the best of them all

[Scarletdown]

I've called this process "taking a crap" and any American wishing to produce a bowel movement will shortly be in breach of my patent.

Would just calling it something different such as deploying the troops or dropping the kids off at the pool be a way around your patent?

Also, you could probably get this patent passed easier if you make it "Taking a crap on the Internet." Then again, there's some prior art for that (spammers, AOL, and Internet Explorer, for example). ;)

Can I patent this?

[grumpyman]

"Do not pay until 2007"!!!

Getting someone to invent it again?

[Anonymous Coward]

IAMANAL, but isn't there a law or principle that, if a second set of inventors with no likely or remotely possible link to or knowledge of the previous patended invention makes a similar invention, they can also make use of it?

I seem to remember a case where company Y considered patented method A so vital that it screened engineers/programmers (I believe the latter) for those who had never heard of method A, and then employed them, without any guidance how, to solve the problem, and in doing so they came up with method A? Which was subsequently allowed?

If this is the case - isn't it just a matter of scraping together a focus group of punters from somewhere who have never used Ebay, and ask them to design a feature-rich online auction system?

Prior Art

[Volante3192]

Doesn't this conflict somehow with the patent Amazon has on it's One-Click cart?

USPTO link for 5,960,411

Then again, Buy It Now does involve more than one step...

Easy way around this.

[jocknerd]

Change the "Buy it now" to "Buy it in 5 minutes"

These patents are just so f'ing stupid.

Well I'm an inventor

[cdn-programmer]

I'm an inventor and I have invented a very simple product that I would like to put in the market. In many respects the product is obvious and the best way to do it is a little more expensive than a poor boy solution and has been used for probably 1000's of years. However I'm afraid that some dumb ass will think that its non-obvious and the patent office will of course have agreed so if I create the product and hense create some jobs I'm afraid I'll be sued.

OTOH there is a poor boy solution that probably is patentable and probaby has not been patented and is actually easy to do but not quite obvious. If I spend my time and money and get a patent then I cannot defend a patent attack.

Purely and simply the system acts as a restraint on trade. The consequence is that people who are aware of the legalities may choose to not do business and the obvious consequence of this is higher prices and fewer jobs. A not so obvious consequence is that the product I am looking at is really a very effective saftey measure and without it people can get injured!

Patent Requirements

[bmh129]

This patent is obviously invalid. It falls into two categories which violate major rules of patentability:

-Nonstatutory (method of doing business)

-Obvious (does not take an inventor to "buy it now" at a predetermined price)

Yet somehow, they have a patent, they've managed to fight a long court battle over it, and apparently, the government educated morons running the Solicitor General's office think it's valid!

You're completely right!

[Just Some Guy]

It's using those pieces in novel ways that constitutes invention.

Without question, you are correct.

Now, please tell me how assigning a retail price to an item is novel and I'll gladly concede that MercExchange isn't a pack of frickin' thieves that would have been dragged out and shot in less litigious times.