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Online Auctions Patented, eBay Sued 614

Posted by CmdrTaco
from the where-will-I-get-old-d&d-books dept.
mattfusf writes "This article from News.com talks about a guy who has filed a lawsuit against eBay for patent infringment. Patent 5,845,265 covers a "method..for creating a computerized market for used and collectible goods""
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Online Auctions Patented, eBay Sued

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  • You know (Score:5, Funny)

    by Anonymous Coward on Thursday September 05, 2002 @09:35AM (#4199572)
    Thomas Woolston could just auction those patents off on eBay. He'll make a killing and save on lawyer fees.
    • by melquiades (314628) on Thursday September 05, 2002 @12:16PM (#4200514) Homepage
      Heck, come to think of it, I should have filed this one:
      A patent for the use of patent law to claim ownership of broadly applicable and largely obvious and unoriginal ideas, thereby allowing the user of this patent to file frivolous suits against major corporations for personal monetary gain.
      Judging from recent news, that patent would make a killing on eBay these days!

      Alas, there's too much prior art now to file it -- unless, of course, the patent office were to start approving patents with no regard whatsoever for their validity....
  • One more ... (Score:3, Insightful)

    by Koyaanisqatsi (581196) on Thursday September 05, 2002 @09:35AM (#4199574)
    And can you imagine "what if" someone had a patent on *normal* auctions?

    This whole issue of patents for "doing things with computers" is getting a bit out of hand. I'll be curious to see the outcome of this.
    • Re:One more ... (Score:3, Insightful)

      by Kierthos (225954)
      The outcome will most likely be that eBay pays an undisclosed amount in a settlement. Frankly, from reading the article, this patent-filing jackass is yet another example of a lawyer abusing the system, rather then using it. At least one of his patents should not have been granted, probably all three mentioned.

      And in his filing against Priceline, it's pretty obvious that they were already engaged in that business model before he filed the patent.

      Hopefully, however, common sense in the judge will reign, and he will not only throw out any case against eBay, but hit this lawyer with extremely large financial sanctions and strip him of his license to practice law.

      Kierthos
    • I think you hit the nail on the head. I'm going to patent "a process by which you use a computer to perform a standard task."

      I'll make billions.
    • Obviousness (Score:5, Interesting)

      by nuggz (69912) on Thursday September 05, 2002 @09:48AM (#4199675) Homepage
      The trust issue is the key to the online patent, not the auction.

      Online auctions are obvious, a trustworthy auction is the innovation.
  • This one is interesting, since it does not seem, on the face of it, to be one of those patent squatters-key in this is that EBay approached the patent holder to try and buy the patent (as opposed to one of those out of the blue lawyer letters asking for millions) Will be interesting to see where this goes-DP
    • by cshotton (46965) on Thursday September 05, 2002 @10:22AM (#4199902) Homepage
      Judging by the tenor of comments here, it doesn't seem like many people took the time to actually read the relevant patents before providing opinions.

      eBay's lawyers may be quite right in saying they have a reason to be hopeful. The patent numbered 5,845,265 [164.195.100.11] has a relatively vague abstract that makes it sound like eBay's business model. But if you read further in the claims, you'll see that what this guy is claiming is something entirely different.

      Claim #1 describes a basic system for an on-line auction house where the actual, physical good is escrowed by the auction house, bar-coded, photographed, and placed on a Web site to be bid on. This process is elaborated on in claim #3 with sufficient detail as to make clear that the intent of the patent is to mediate a traditional auction of physical goods by replacing bidders' paddles with on-line terminals.

      The mechanisms described for inventorying auctioned goods comprise a major portion of the claims, in particular #15. Subsequent claims from 18-22 do sound more like what eBay does at the conclusion of an auction, but even so, it's up to the buyer and seller on eBay to consumate the transaction. This patent assumes the auction house is clearing the transaction before releasing the physical goods. Seems like another difference with eBay's model.

      In my own, particular opinion, I think that it will be settled out of court because eBay will likely be able to demonstrate it can potentially prevail if it goes to trial. Prediction: $10M in one time, go-away money. No royalties, no court case.

      • by shren (134692) on Thursday September 05, 2002 @10:36AM (#4199990) Homepage Journal

        Patent claims are judged individually. If EBay violates one claim and it is decided that said claim is valid, then EBay is at fault. The claims do not have to all fit, or even all be valid.

        • by Software (179033) on Thursday September 05, 2002 @11:57AM (#4200423) Homepage Journal
          If EBay violates one claim and it is decided that said claim is valid, then EBay is at fault.

          OK, but the problem for Woolston is that not even one claim matches what eBay is doing.

          Claims 1-7 do not fit because of eBay doesn't use bar code scanners to scan the product (eBay doesn't even touch the product). I doubt "posting terminal" would be taken to mean every computer owned by anyone who connected to eBay.

          Claims 8-14 are close "... said posting terminal apparatus having means for creating a digital image of a good for sale, means for creating a data record of said good for sale, a tracking number printer means, a tracking number scanner means" but not close enough.

          Claims 15-22 are also not likely to fit: "posting terminal apparatus, said posting terminal apparatus having a digital camera for creating a digital image of a good for sale, a record maker module for creating a data record of said good for sale, a tracking code printer, a tracking code scanner".

          Claims 23-25 mention some of the thing eBay uses, but not all of them are owned by eBay: "said system comprising:
          a digital camera for creating a digital image of a good for sale;"
          ...and...
          "a printer for printing said digital image of said good for sale and said textual information from said user; ", so I doubt these claims would be valid.

          The main problem for Woolston is that eBay doesn't own all of the items listed in the claim. eBay doesn't own "posting terminals", because its customers do. A similar argument holds for claims 26-29. Woolston apparently had first in his mind a proprietary auction system (the internet is mentioned though), not a system where everyone owns a digital camera and can put stuff up on eBay.

  • by syd02 (595787) on Thursday September 05, 2002 @09:37AM (#4199583)
    This might actually help in the effort to get people to rethink the role of the patent office in the digital era. I welcome this nonsense...the higher the profile (eBay!), the greater the impact.

    What's that saying? The worse the better?
  • Is it just me, or does this look a little bit like some greedy guy who managed to sneak a patent in under everyone's noses during the dot-boom? The timing of this is rather suspect...

    What's next, anyway? Everybody and teir dog online is trying to get auction systems off the ground... This guy gonna sue em all?
    • Re:Face Value? (Score:3, Interesting)

      by EvilAlien (133134)
      You are just jealous that you didn't think of it first =P

      In all seriousness, this is akin to domain prospecting, at least if you stretch logic a little. We have a little nobody taking advantage of a loophole in an attempt to gouge an organization with deep pockets. The /. crowd may instinctively side with the little guy on things like this, but the businesses that employ us need to be protected from this kind of thing.

    • If you define "sneak a patent in" as in apply for a patent half a year before ebay was founded, yes he snuk it in.
      Read the article.
    • Is it just me, or does this look a little bit like some greedy guy who managed to sneak a patent in under everyone's noses during the dot-boom? The timing of this is rather suspect

      It's just you. From the article:

      he sued eBay in 2001 after negotiations broke down over the auction site's offer to purchase his patents.

      The company first contacted Woolston in 2000 with an interest in buying the patents.

      In other words, eBay knew about the patent and had read it and knew they wanted to licence it. Then they went ahead and used the technique anyway without completing the negotiation. Remember that a patent documents a single technique in great detail, it cannot be something vague and generic like "auctions" - he must have solved one very specific problem that eBay encountered and could not solve on their own.

      If eBay had infinged the patent inadvertantly and had by coincidence come up with something identical, that would be a whole different matter. But that's not what happened here.
  • I have a new idea for a business model:
    Come up with a really generic idea, wait, say, ten years for another company to come up with the same idea and become successful and then sue them!

    Part 2 of the business model is to sue people who sue companies under the above premeses for patent infringement. Oh wow! Looks like I got my first target!
    • Step 3: PROFIT!!!
    • Yes, but MY new business model will be to come up with a really generic idea, wait 11 years, and sue you for sueing them!

    • I have a new idea for a business model: Come up with a really generic idea, wait, say, ten years for another company to come up with the same idea and become successful and then sue them!

      If you put a little thought into it, one could come up with a whole raft of "speculative patents" and conceivably make a killing in the future. All it takes is a little thought.
      1. 1. come up with an idea for a money-making business that is currently impossible due to technological limitations.

      2. 2. patent the impossible notion
        3. wait for:
        1. (a)technology to make it possible

        2. (b)someone to start a business using some variation on your idea
          (c)them to start making money
        4. sue the bejeezus out of them for "stealing" your business model
      of course, the REAL trick to this is coming up with a business idea that can't be done yet, but WILL be possible before the patent expires. Here's one off the top of my head:
      "method of extending cellular communications" - a cell phone not in range of a cell tower instead merely connects to the nearest other cell phone which is in range and uses it as a relay for the call. I'm sure this idea has been thought of, but has it been patented yet? Could one write up a vague patent spec that would cover any future implementation of the concept? maybe...
    • 1) File patent
      2) Sit back while patent is adopted
      3) Sue the crap out of everyone
      4) ???
      5) Collect underpants!

      .
  • by Joel Ironstone (161342) on Thursday September 05, 2002 @09:40AM (#4199605)
    patent method of acquiring money solely from exploiting patent institutions. In this way I can sue everyone who tries to sue anyone for patent infringement. I can even sue anyone who tries to sue me.

    • I think there is prior art [slashdot.org].
    • Sorry, it would never hold up... too much prior art.
    • There's about 600,000 instances of prior art :-)
    • by Anarchofascist (4820) on Thursday September 05, 2002 @10:58AM (#4200123) Homepage Journal
      I have already filed a patent for the business process which involves patenting a business process for filing a suit against anyone filing a suit for patent infringement.

      And of course, before you think of it, I have also patented filing a patent for the business model of filing patents against people filing patents for any business process involving patenting a business process for filing a suit against anyone filing a suit for patent infringement.

      If that's not perfectly clear, I think you should just pay up now and avoid dragging this thing through the courts :)

      On second thoughts, I think I'll go away now and file a patent for the business model of patenting business models which are patents against the exploitation of business models. Or perhaps hire a good lawyer.
  • Prior art...? (Score:5, Informative)

    by Flaming Foobar (597181) on Thursday September 05, 2002 @09:40AM (#4199609)
    University of Turku [www.utu.fi] has had an online aucion server for 10 years or so. They used to e.g. auction all their old computer gear, instead of throwing them away. It was pretty popular, although I think they have taken the service offline now.
  • Ouch (Score:5, Interesting)

    by wiredog (43288) on Thursday September 05, 2002 @09:40AM (#4199611) Journal

    The company [eBay] first contacted Woolston in 2000 with an interest in buying the patents. E-mail to that effect is expected to figure prominently in the case because it indicates that eBay knew about Woolston's patents but continued to infringe them, he said.


    The patent was filed in 1995, and other companies are already licensing it. Looks valid (under the current rules) too. The only way I see for eBay to keep from getting raped in the courts is for business method patents to be tossed entirely.

    Adobe getting hit with DMCA problems, Verizon and the RIAA going at it over DMCA, eBay with patent problems. If enough large and publicly traded companies get hurt by this sort of stuff it could be a good thing. In the long run.

      • Adobe getting hit with DMCA problems, Verizon and the RIAA going at it over DMCA, eBay with patent problems. If enough large and publicly traded companies get hurt by this sort of stuff it could be a good thing. In the long run.
      Actually, it strikes me as proper that a patent would be used to protect an individual's invention (in this case, a business process, which is allowed under current rules) against a large and otherwise unasailable (sp?) u:berCompany.

      If we have patents I'd rather that they be used to help the weak than to buttress the strong.

      • if eBay had bought the patent, and then filed lawsuits?
      • by El Camino SS (264212) on Thursday September 05, 2002 @10:18AM (#4199875)
        Actually, it strikes me as proper that a patent would be used to protect an individual's invention (in this case, a business process, which is allowed under current rules) against a large and otherwise unasailable uberCompany.

        One. Patents are not made to stifle business. They are made to protect the inventor.

        However, the whole concept of inventing an "online auction" is so damnably ridiculous that there is no way that he should ever have been granted a patent for it. This whole argument is founded in the fact that the man said "uh, auction on a computer!" and got a patent. WTF ever. Auctions have been around for centuries. People can not apply the phrase on a computer on the back of every tried and true business model and expect to get royalties or the ability to sue the bejesus out of people.

        Oh, and when you use the phrase unasailable uber-company, it makes us all think of you as a useless leftie that thinks that eBay is "evil" simply because it is big. The last thing I checked that eBay did to ruin or world and our freedoms was consume electricity. So go attack Dow Chemical, Halliburton, or McDonald's. All eBay has done for me is make sure that I am not getting price gouged. At the very least, if you are going to go after corporate America, go after the ones that are fucking up people's health, the government, and the planet.

        • People can not apply the phrase on a computer on the back of every tried and true business model and expect to get royalties or the ability to sue the bejesus out of people.

          Oh yeah, well I'm going to claim:

          "1. A method of commerce comprising:


          creating a first trade channel for a predetermined good or service between a first entity and second entity, using, at least in part, an interconnected network of computers; and

          eliminating, simultaneously or nearly simultaneously, a second trade channel for said predetermined good or service between said first entity and a third entity."
          Oh wait, that's already been done in "Methods and Systems for Commerce [uspto.gov]" just one of the many business method patents that reference [uspto.gov] the auction patent, which appears to be one of the pioneers of just slapping "on a computer" or "over the internet" or "using an electronic database" onto an existing business model to come up with a patent. Look for these guys to start suing EVERYONE.

          Most of the referencing patents were filed at the height of the dot com boom and are just being approved now, including ones from priceline and lendingtree. Expect to see a whole lot more of these lawsuits as troubled and bankrupt companies, and their creditors and investors, start preying on the dot com survivors and other established businesses with their newly approved patents.

        • This whole argument is founded in the fact that the man said "uh, auction on a computer!" and got a patent.

          Actually, I have to disagree here. Quoting from the article:

          He filed his idea with the patent office in April 1995 and founded MercExchange to try to turn the idea into a business. But he couldn't raise the funding and eventually turned to the business of licensing his patents to other companies.

          So he made a good faith attempt to raise the funding to produce the item listed in the patent, but couldn't get the money for it. Just because he may have made the attempt when there wasn't billions of dollars of capital available for anyone that mentioned the word "Internet" doesn't mean that he should be punished for that fact. My gripe is the folks that file for patents without any intention of ever attempting to implement it.
          • by Deven (13090) <deven@ties.org> on Thursday September 05, 2002 @12:11PM (#4200479) Homepage
            So he made a good faith attempt to raise the funding to produce the item listed in the patent, but couldn't get the money for it. Just because he may have made the attempt when there wasn't billions of dollars of capital available for anyone that mentioned the word "Internet" doesn't mean that he should be punished for that fact. My gripe is the folks that file for patents without any intention of ever attempting to implement it.

            I'll give him some credit for attempting to implement the idea. That puts him on higher moral ground than the bottomfeeders whose entire business model is based on patent extortion.

            However, the fact remains that the patent probably never should have been granted in the first place. Patents are supposed to protect nonobvious inventions, and we're seeing droves of patents granted that are patently obvious. I believe software patents and business method patents are particularly susceptible to this sort of stupidity, and should be subject to heightened scrutiny as a result.

            I'm not categorically opposed to all software patents; RSA was a brilliant invention deserving of a software patent if anything was. It was a true invention, and now that the patent has expired, it's in the public domain, for the benefit of all. This is the sort of innovation that patents exist to encourage, and the only justification for them.

            The problem is that the USPTO is out of control, granting ridiculous patents on everything from XOR cursors and one-click shopping to swinging sideways on a swing! If the USPTO actually applied the "nonobvious" test properly, very few patents would be granted, and they could serve their intended purpose. Instead, the current system is legalized extortion, and a great tool to dampen economic activity.

            Discuss the most egregious examples (like swinging sideways) with your congresscritter. That's the only way this situation might improve.
  • IANAL, blah blah, but I remember auctions on usenet groups ages ago. Specifically for collectible goods!

    I haven't read their patent, but can't some silver-tongued "law-talking-guy" (simpsons ref) spin this patent into the ground?

  • by laetus (45131) on Thursday September 05, 2002 @09:41AM (#4199627)

    But am I missing something?

    Patenting an online auction in my mind is akin to patenting the idea a selling milk in refrigerated display cases, ie,

    This patent is for a system that creates a refrigerated marketplace for milk using a refrigerator in a store. The patent also covers the use of a payment-processing service to allow purchasers to pay for the goods.

    I mean, where's the creativity that patents are supposedly supposed to protect? In my mind, virtually any business transaction can be ported to the internet. It would be like someone patenting sales calls over a telephone when telephones were first invented.

  • by fudgefactor7 (581449) on Thursday September 05, 2002 @09:42AM (#4199634)
    Personally, I think the "cure" is for patent law to be modified so that an absolute description is needed for a patent to be validly claimed rather than the woefully ambiguous "a method of performing auctions..." What kind of crap is that? Can I patent "..a method for transmitting gaseous oxygen in a liquid medium..." then sue everyone for having blood? Of course not, but that's just as silly (ok, so actually that's more silly, but you get my point.)

    Shakespear was right: First thing we do, kill all the lawyers. They're the reason this sort of mess is around in the first place.
  • Edison is supposed to have said "Genius is 1% inspiration and 99% perspiration" - today it's 1% inspiration and 99% legalese and marketing.

  • Tedious (Score:2, Insightful)

    by cd-w (78145)
    This is getting tedious. There is a patent article on Slashdot nearly every day now. Linux was absolutely right when he said that we should just ignore software patent issues. The vast majority of patents are never enforced or are overturned in any case.
  • by gosand (234100) on Thursday September 05, 2002 @09:45AM (#4199661)
    From the looks of the article (you did read the article, didn't you?) it seems that he had the "online auction" idea patented before eBay went into business. There were even negotiations for eBay to buy his patents. But that fell through, and eBay went ahead infringing on his patents.

    So LEGALLY, it appears that eBay is at fault. This doesn't address the fact that there is such a huge hole in the entire software patent/intellectual propterty concept.

    Legally, this guy has a claim, but by all rights he shouldn't. This is exactly why patenting ideas and business models is stupid. This guy is a lawyer (patent attorney no less), and has gone after priceline.com and goto.com for infringements on some of his other patents.

    As long as the system is broken, people will take advantage of it.

  • The real problem (Score:3, Informative)

    by Midnight Thunder (17205) on Thursday September 05, 2002 @09:47AM (#4199668) Homepage Journal
    There are a few problems with the patent system. Amongst them are:
    • Having to pay huge fees for patent searches. Because of this it usually ends up being cheaper to send in a patent application and then let someone else scream prior art.
    • Now with international law protecting patents of other countries, it just became even more complicated to make sure that there was no prior art.
    • The obvious is being patented (this is obvious to /. readers). Then again, when you aren't working in a given field what is obvious will vary. This means that we really need a means of public screening of patents.
    There is no such thing as a perfect system. Anything is open to abuse, so there needs to be guidelines and reviews for a system to be run as close to the original intent as possible.
  • I have a problem with those hanging eBay out to dry because they have been working on buying these patents for two years.


    Had I been smart enough to start eBay way-back-when, I would not have had the resources to examine patents, I would have just programmed the site and put up the business. As it grew, I might have been notified about the patent, and from there consulted a lawyer. There is no way I would have shut down, saying, "Well, I have found out about a possible infringement, and while in the process of speaking with a patent holder we are out of business." The company by this time is multi-million dollars a year.


    When does the American dream come through? If I have an idea, I want to protect anyone that had a like idea, but don't kill my business while I am working with the original idea holder. All I can see from this is money in lawyers' pockets.

  • I remember auctions on Fidonet a looooooong time ago, which definitally falls under the realm of "a computerized market for used and collectible goods"
  • by crovira (10242) on Thursday September 05, 2002 @09:51AM (#4199698) Homepage
    (When did the USPO go "For Profit?" Who was in power, albeit not in possession of any higher cognitive abilities?)

    This type of mandated idiocy won't stop until the USPO get sued for some really big bucks and whoever issued the patent, reviewed it, supervised and made money from letting it escape it, gets their ass fired.

    I think this might be the case that breaks the camel's back. ebay should sue the patent office for interfering with their normal existing legal business operations.

    In fact, it might be fun to try taking out a patent on the information recording portions of the patenting process and sue the USPO for patent violation.

    Bill Gates was right in his 1991 memo. The application of software and process patents will bring the very concept of innovation to a stand-still.
  • by Snarfangel (203258) on Thursday September 05, 2002 @09:51AM (#4199699) Homepage
    "A method of sending out unsolicited mass electronic mailings to email addresses of individuals who have expressed absolutely no interest in the product or service being offered. Such 'spam' is to consist exclusively of worthless potions, creams, and pills for enlarging or reducing areas of the body, pyramid schemes to get rich quick, offers for clubs no one in their right mind would join, and letters from deposed heads of state begging you to help move money from poor African nations."

    If only someone would patent *that* and sue the #$%@! out of all of the infringers!
  • From the referenced news story:
    The judge has not translated MercExchange's patent claims into plain English, an important part of a patent dispute. Until he completes this step, known as the Markman ruling, it's hard to tell how big the threat is to eBay, said Carl Oppedahl, an intellectual property lawyer with Dillon, Colo.-based Oppedahl & Larson.
    Google came up with this pointer [google.com] (it's from one party in a patent dispute, but gives the general idea).

    Maybe I'm being naive, but wouldn't it be easier to require that the claims in the patent be understandable in the first place without requiring the quasi-religious intervention of the courts?

    Karma: Hopelessly naive (mainly affected by bewilderment at modern life).

  • by joncarwash (600744) <jonathanwhodges@nOSPAm.gmail.com> on Thursday September 05, 2002 @09:53AM (#4199710) Homepage

    I'm glad that the patent system protects people who have no product or service at all.

    But he couldn't raise the funding and eventually turned to the business of licensing his patents to other companies

    Instead, you can just "think" up some "intellectual property" that exists only in your brain, fail to implement any form of it, and then get a patent.

    Seems to be a trend here, especially with the recent the JPEG issue [slashdot.org], the mp3 issue [slashdot.org], and now this. Looks like all you have to do is "think up" something and patent it, sit around for a while for someone to do all the implementation work (the real work, mind you), then sue their behind off. I suppose that means lazy bums like me have a chance in this world..

  • Can someone explain how is that not the patenting of an idea without any regard to it's implementation. So what this patent means is that you can't create an auction system whatever your implementation is !?

    Are ideas really non patentables ?
    • Read the patent [164.195.100.11], it talks about "vetted bailee" and other implementation details.

      It looks to me like the patent is pretty specific, and specifies that the goods change hands but stay on the market, so I buy something from you, and then increase the price but leave it on sale "thereby to allow the purchaser to speculate on the price of collectibles in an electronic market for used goods while assuring the safe and trusted physical possession of a good with a vetted bailee". Sounds like some trusted third party safeguards the physical goods while the transaction is in progress too. Not much like ebay, really, I think this guy is clutching at straws. Then again, IANAL.
  • *sigh* (Score:5, Interesting)

    by Quixadhal (45024) on Thursday September 05, 2002 @09:58AM (#4199743) Homepage Journal
    Does no one think of the effect their frivolus patents might have on the industry as a whole? So, let's assume Woolston does indeed have an enforceable patent, and he manages to sue eBay and either get a big chunk of cash, or force them to change their business model to avoid infringement... does this guy realize the potential damange he can cause to the industry as a whole? Does he care?

    Probably not. Personal greed is the American Way. It's more important that I get MY piece of the pie, even if it means letting the rest of the pie spoil -- at least I got mine!

    eBay is one of those *few* examples of a pure internet business that is doing well and making money. Given the state of the economy today, I feel this kind of attempt is almost criminal in intent. It's pretty close to sabotage for this corner of the technology sector, way to go! Make sure your lawyer asks for the firstborn of their CEO too!

    I'm pretty certain that the exact implementation details of eBay's software (the algorithm, if you will) are pretty different than what this guy envisioned for this baseball trading-card exchange system. I'm quite sure that had he written software to do this, there would be no copyright infringement between the two... and there's the problem. He's claiming an overly broad patent on an idea, when he probably only has the right to an algorithm. Yeah, *I* had ideas about online trading in the 1980's too buddy, so did half the people who had even heard of the internet (or how about fidonet? or just plain bbs's???). Anyone remember the online trading games from those days? If anything, THOSE probably pre-dated his scheme -- they just didn't handle real products.

    I got called to pay my "voting tax" next week (Jury Duty), and I would dread being on a case like this. While common sense would have me acquit on the basis that a broad "patent" like this is a mockery of the Office, and that even if eBay were abusing it with intent, I'd still not have much sympathy for this guy -- it's still the law, and I'd still have to vote according to what the law says, not what it means (since laws are no longer by the people -- if you need a lawyer to explain a law, there's something WRONG!).
    • I got called to pay my "voting tax" next week (Jury Duty), and I would dread being on a case like this. While common sense would have me acquit on the basis that a broad "patent" like this is a mockery of the Office, and that even if eBay were abusing it with intent, I'd still not have much sympathy for this guy -- it's still the law, and I'd still have to vote according to what the law says, not what it means...

      I would have to differ with this argument here. In my mind, a juror has the power to overturn a bad law with his/her verdict of "not guilty".

      If someone is being sued/prosecuted over a bad law, and you feel they did nothing wrong, you, as a juror, do indeed have the power to have that law re-examined, and possibly repealed. The problem is, you need to get the other jurors to understand agree with you.

      A verdict of "not guilty" does mean a lot in these kinds of cases.
      • Re:*sigh* (Score:3, Informative)

        by rossz (67331)
        Yes, the jury has the right (and in my opinion, the duty) to disregard a bad law.

        "...the jury has the power to bring in a verdict in the teeth of both law and facts," Oliver Wendel Holmes, 1920 Homing v DC, 244 US 135.

        "...The jury possesses "the undisputed power to acquit, even if its verdict is con- trary to the law as given by the judge and contrary to the evidence." 1969 U.S. v Moylan, 417 F2d 1002

        "...The jury has an "unreviewable and reversible power... to acquit in disregard of the instruction on the law given by the trial judge." 1972 U.S. v Dougherty, 473 F2d 1113

    • Re:*sigh* (Score:4, Insightful)

      by donutello (88309) on Thursday September 05, 2002 @12:19PM (#4200527) Homepage
      Disclaimer: Personally, I think that this patent is ridiculous and obvious and therefore should not have been granted. For the sake of this discussion, let's assume it was some other kind of thing that was patented and infringed upon by eBay.

      Probably not. Personal greed is the American Way. It's more important that I get MY piece of the pie, even if it means letting the rest of the pie spoil -- at least I got mine!


      What a bunch of crap! There is nothing wrong or immoral with asserting your rights. There's two models of society: One where everyone works only for the greater good, not caring about personal gain. The other where everyone focuses only on satisfying their personal goals.

      The first is the communist system. It's a great idea in principle, but as anyone older than 15 will tell you, it just doesn't work.

      The other is the capitalist system we are in - which has been proven to work great. Individuals assert their own rights and work to benefit themselves and in doing so, benefit society at large.

      eBay is one of those *few* examples of a pure internet business that is doing well and making money. Given the state of the economy today, I feel this kind of attempt is almost criminal in intent. It's pretty close to sabotage for this corner of the technology sector, way to go! Make sure your lawyer asks for the firstborn of their CEO too!

      Someone fighting for CEO's rights - on Slashdot! That's when I begin to think this is a troll. eBay is a business. The CEOs and shareholders are getting rich off what they do. Now, if it turns out that they are doing so by infringing on someone elses patents, then it should be the patent holder not the CEO's who should be profiting from it. If as you say, it would be impossible for eBay to succeed without infringing the patent, I see nothing wrong with eBay sharing some of their profits with the inventor who they owe their success to.
      • The other is the capitalist system we are in - which has been proven to work great. Individuals assert their own rights and work to benefit themselves and in doing so, benefit society at large.

        No. The robber barons of the early steel and oil industries did not work to the good of society. They amassed massive personal wealth in order to create personal dynasties that still last to this day (Rockefeller, Carnegie, etc.). This was done to the detriment of the mass of society (low wages, child labor, massive numbers of industrial accidents, union busters, etc.). It is an inverse proportion: the smaller the concentration of wealth, the greater the rest of society is screwed. Look at every accumulation of massive person wealth through history and you will see the exploitation of societies for the gain of a few.

        The first is the communist system. It's a great idea in principle, but as anyone older than 15 will tell you, it just doesn't work.

        And that same person will tell you the same about capitalism. We live in a complex world and any simple model will eventually break down. Sure, capitalism works great at first (as does communism). There is a level playing field, lots of entities competing, fast innovation in the industry. But then one or two players emerge as the strongest and the competition dies away. The industry consolidates, barriers to entry are raised, and there is a hardening of the arteries. At this point, capitalism fails because the barriers to competition are prohibitvely high and competition dies. And this is the best case; if some players start with an unequal advantage, the hardening and consolidation can occur before the industry even begins. E.g., Microsoft entering a new industry and using its billions to bar others from competing by giving away the product or the broadband providers using legislation to make it harder for competitors to compete.

        The same thing happens at a societal level. Face it, if a person is born rich, they have a large head start on everybody else. If the gap between rich and poor becomes too great, it doesn't matter how in-bred, weak, and dumb a blue-blood gets, no one can catch up. Government (societal) regulation is needed to help narrow the gap between rich and poor, to ensure that we all start on a somewhat even playing field no matter who we are born to. No society will be perfect (imperfect world again), but the society that gets closest has the best chance of success because it is less likely that their next Einstein will be shot dead in a ghetto at 15. Competition is great and the best competition occurs when everyone starts from the same place.

        If...it would be impossible for eBay to succeed without infringing the patent, I see nothing wrong with eBay sharing some of their profits with the inventor who they owe their success to.

        Ah, but there is an incongruency in that statement. eBay infringing the patent and owing their success to it are two entirely different things. Yes, your disclaimer says you are using a fictional patent (not very sporting, changing the subject of debate halfway through). But you don't say that it is any more meritorious than this one, only different. I do agree that the original poster's argument is flawed, but your's is equally so.

        It used to be that patents were for inventions; patent applications required a working model or plans for the invention being patented. Some good examples of this (and the patent system at its best, although there were also abuses) are provided by the American gun industry in the 19th and early 20th centuries, such as the lever-action repeating rifle (the Winchester). Anyone could invent a repeating rifle, but they couldn't use the same lever mechanism to eject the spent shell and load a new one (which was an ingenious solution, both reliable and elegant) unless they licensed it (for a period of time).

        Now, however, an applicant can be so abstract as to patent a general idea and not an invention. There is a level of specificity missing. You should have to provide source code, a UML design, something that goes quite a bit beyond what "software" and "business plan" patents require.

        How many ideas are truly original? We are all standing on the shoulders of giants, afterall. What is important is the application of an idea, the creation of something unique.

        So, eBay can not avoid infringing the patent and yet does not owe any of their success to the "inventor" (a misuse of the word) of the patent. That is a telling sign that our patent system needs some revision. Besides which, the patent was filed a couple months after the first post on eBay. Another problem with our patent system.

        Yours,
        Nathan
    • Re:*sigh* (Score:3, Insightful)

      by poot_rootbeer (188613)
      it's still the law, and I'd still have to vote according to what the law says, not what it means

      This is a common misconception. If juries were obliged to base their decisions on literal interpretations of the law, what would be the point of having juries at all? Juries are made up of people, and people have common sense. This is intentional.

      Of course, if the attorneys on either side find out you know about this during juror selection, you won't be serving on that case -- lawyers don't like presenting to unpredictable jurors.
    • Re:*sigh* (Score:3, Insightful)

      I got called to pay my "voting tax" next week (Jury Duty), and I would dread being on a case like this. While common sense would have me acquit on the basis that a broad "patent" like this is a mockery of the Office, and that even if eBay were abusing it with intent, I'd still not have much sympathy for this guy -- it's still the law, and I'd still have to vote according to what the law says, not what it means (since laws are no longer by the people -- if you need a lawyer to explain a law, there's something WRONG!).

      Ahhh, but "obviousness" is a valid defense against a claim of infringement. _Proving_ obviousness seems harder.

      And, since you read slashdot, you obviously know too much to be allowed to sit on jury for a software patent infringement case. One side or the other would insist you go...
    • Even though the judge and every lawyer in sight will disagree with this... Your purpose on the jury is to judge the law in the context of the accused. The jury is the last check and balance in the system. Use it when you get the chance.
  • NASDAQ as prior art (Score:4, Interesting)

    by GGardner (97375) on Thursday September 05, 2002 @09:58AM (#4199744)

    The Nasdaq has been running on-line "auctions" for quite some time now. The patent claims the autions are for "used goods and collectibles", and stocks probably don't count as "used goods or collectibles" (except for my portfolio...) but come on, that's a pretty small difference...
  • Isn't there a clause in patent law about making an effort to protect your idea or losing rights to it? Or am I thinking of trademark/copyright law?

    It sounds to me like this guy was sitting on his patent until the time was right to sue, which should force him to lose his rights to the idea. (the ethics of which I will not go into as I'm in agreement with 99.999% of /. on the concept of software patents)
  • In this brave new age of patent ambushes, I need to be reminded...

    Tell me again how using open source's evil viral licensing might one day affect your company's valuable IP and business processes at some future date?


  • If we can patent "business methods" that come about because of new technology, what's to stop me doing a bit of crystal ball gazing and patenting things that might be possible in a few years time?

    Let's see... In a few years time, mobile phones with video are likely to become commonplace. So, what new business method might arise because of that? OK, how about this. Florists where you can phone your order through and actually see the actual bunch of flowers that are going to be sent in your name, and perhaps make changes to the arrangement via the phone. That will probably happen. And now I can patent it!

    Hey that was easy. Think of an idea and sit back and wait. In a couple of decades I might be richer than Bill Gates!

    • Re:Nonsense (Score:3, Informative)

      by lunenburg (37393)
      You kid, but I remember a story from a year or so ago about this guy who has made his career by looking for trends in industry, filing a very broad, generic patent, and ammending it to become more specific as the technology solidifies, and going after the people who invented the technology for patent royalties.

      I searched the archives and google, but wasn't able to find a link to the story. Maybe someone else remembers the story, too.
  • It covers collectible or used goods auctioing which is automated in a local area. Sounds like it is a U-Scan type system for a small auction house or something at the mall. Not a WWW enabled auctioneer. Gotta love it when people patent things and don't do anything other then sue, isn't America great. Oh well back to work on that "Bubble Sort" Patent of mine.
  • Why did it take him 4 years since he first got the patent to do something about? He got his first patent in 1998, and in 2000 eBay came to the guy and tried buy access to his patent.

    eBay didn't get what they wanted so they went out, improved on the concept[not the patent] and made money.

    Sounds like this is more about sour grapes then patent infringement.
  • I think we are looking at an entirely new business model here and a new field that is rapidly growing! Move over dot coms here come the big players of the 21st century and the beauty of it is that you don't have to work to meet your goals all you have do is have an idea and get the patend first.

    I wonder if this is not the single largest problem with a service economy, defining the value that you produce. Put another way, if this guy sold shares in his company, MercExchange, publicly would you buy them? And what would that say about you?
  • by hrieke (126185)
    Okay, so what about online games?

    In some MMRPG ther are market places where characters meet, sell items to one another or have items up for bid.

    Even though it might be for an imaginary currency for an imaginary object, the system is still the same, so would this guy be able to collect from Sony, EA, Microsoft, etc? Or would the game companies drop the public market place model where this type of action could happen?
    Anywhere where 3 or more characters could meet could be a problem.

    Mighty Hero: I have a magic sword +10 DM that I no longer need. Who wants to buy it from me?
    Newbie: 10 zenny
    Hero wantabe: 20 zenny

    ...

  • So when is this guy putting his patent up for auction on Ebay?
  • by Brian_Ellenberger (308720) on Thursday September 05, 2002 @10:13AM (#4199851)

    Here is the first ebay post dated 1995/09/12 from google groups: http://groups.google.com/groups?selm=pierre-120995 2317370001%40pierre.vip.best.com [google.com]

    The patent was filed November 7, 1995. Sorry, two months too late!

    • by youngsd (39343) on Thursday September 05, 2002 @01:46PM (#4201097)

      It doesn't work that way. If the "inventor" can show that he had the idea prior to someone else publicly disclosing it, he can still win. He has up to one year after public disclosure to file a patent, so something that shows up two months before his filing is very unlikely to dispose of the patent.

      Also, this patent may claim priority from some earlier patent application(s) (haven't looked, don't know) -- it can be difficult to figure out the actual priority date. It may be earlier than one year ahead of the filing date.

      And yes, I am a former patent attorney, although I have since seen the light and no longer do that.

      -Steve

    • "It's not our goal to put eBay out of business. It's our goal to provide just compensation for the patent owner", Robertson said.

    -Yeah, riiiight !

  • Who cares... (Score:3, Insightful)

    by jsonmez (544764) on Thursday September 05, 2002 @10:14AM (#4199854)
    Who cares if he had the idea patented before Ebay. Who cares if Ebay knew about it and willfully violatd the patent. The big thing that matters here is the fact that someone can patents something like "online auctions." That's not what patents were designed for. Patents were designed to protect inventors... inventors of new ideas, not people looking to make a quick buck or own a group of ideas. Auctioning something offline or online should not make a difference. If you can't patent something offline you shouldn't be able to patent it online, it makes no difference. A good majority of these stupid patent claims come from the patent office to allow people to patent things that they normally wouldn't be able to patent, just because they are doing them online.
  • Right is Wrong (Score:3, Interesting)

    by deblau (68023) <slashdot.25.flickboy@spamgourmet.com> on Thursday September 05, 2002 @02:19PM (#4201374) Journal
    Having looked at the MercExchange web site, they don't actually make products, their entire business seems to be about acquiring IP. Even if this guy is right legally, he's still wrong morally. The purpose of a patent is to allow the creator of a new process to develop that process for the purpose of selling the product it develops, without interference from competitors. In other words, it doles out artificial monopolies in exchange for being creative.

    Patents should be unenforceable if the holder of the patent does not try to implement the patent process themselves, in the same way that trademarks must be actively defended. If you aren't going to make the thing you created, get the hell out of the way and let someone else do it, because you're breaching the part of the agreement that gives you the right to the monopoly. This doctrine would still allow the purchase and sale of patents. In fact, it would force such sale, because if the patents weren't being used for productive purposes they would be worthless. It would also eliminate patent squatting.

  • by emarkp (67813) <slashdot&roadq,com> on Thursday September 05, 2002 @02:24PM (#4201406) Journal
    Note that eBay was negotiating to buy the patent, not license it. What could they do if they had purchased the patent? Why, sue all their competitors, just like this guy is doing.

    Sigh.

  • by SkewlD00d (314017) on Thursday September 05, 2002 @02:45PM (#4201613)
    Patent# 1,234,567: "A method and means for disposing of a useless and ignorant government entity creating unfair legal monopolies."

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