Chocolatier Fights PanIP Uber-Commerce Patent

synerr writes "In October, Slashdot reported how PanIP sued 10 companies. Since they were so successful, they have launched 50 more lawsuits. The Ft. Wayne News-Sentinel has an article about how one local small town chocolate company, DeBrand's, is planning to fight back against San Diego based PanIP LLC's claim that they hold the patent over any automated commerce done by text and graphics on a video monitor. The owner of DeBrand's has even set up a web site to organize the different e-merchants, www.youmaybenext.com."

When will this stop?

Why is it still happening? How are these judges rewarding these people? Correct me if I'm wrong, but they're bascially saying "we invented this and let everyone use it for 10-15 years, and now we're going to sue you all for not paying us, when we didn't even charge anything in the first place." How is this not being laughed out of court?

Re:When will this stop?

Because mainly people are settling before it ever gets to court. Those of us with souls know this by the name "extortion." It's fun!

Re:When will this stop?

panIP doesn't need success in courts. It's cheaper for most of the small businesses that are being targeted to simply pay the $5000 (in the chocolate company's case) to panIP than to wage a court battle. Maybe a few companies defend themselves in the lawsuit, but panIP can afford a couple battles as long as most give in and pay the money.

That these sort of strategies work nicely is clear demonstration that the US legal system doesn't protect everyone equally, but that the great deal of beauracracy involved works to the advantage of the wealthy.

No judge has ruled so far

You can sue anyone for anything, no matter how specious. Being sued, however, does not mean that your case instantly goes to court ... or, indeed, ever will. It can take months to get a preliminary court date. Tack on more time for both sides to examine evidence. After that, both sides file motions ... yada yada yada. PanIP probably doesn't even want to go to court. They want to make a quick buck getting mom'n'pop shops to settle. They don't want to take on someone (say, WalMart) with more money, lawyers, and know-how. PanIP might win, but they victory would be pyrrhic; they'd have burned through all their cash.

However, the cost of settling a case like this for $15 or $20 000 is less than the cost of a coupla' good IP lawyers.

Sucks, but you can put your money where your mouth is and help out [youmaybenext.com].

Re:When will this stop?

The mere fact that these people are able to take existing ideas, add the phrase "on a computer", "on a video terminal", etc. and patent it as their own idea is absurd.

Is there where the phrase "patently ridiculous" comes from?

Proposal to fix some patent issues

I believe that, unlike with trademarks, there is no use-it-or-lose-it requirement on patents. You can selectively enforce, not enforce, or completely enforce your rights on patents as you wish.

OTOH, with 8 zillion patents out there designed to be as obfuscated as possible to get past the PTO, this makes engineering a minefield.

I'd prefer a specific exemption making the complaint that a "patent is unclear" becoming a complete defense against patent infringement. It'd also make it *much* easier for the PTO to administer the patents (instead of insanely complicated patents, they'd give the companies an enormous incentive to write their patents clearly and include useful keywords). It's more effective than just rejecting patents, because it means that companies can't just "retry" patents until they get a valid one.

The PTO already puts up a full-text-search search engine, so this makes patent searches much more feasible.

Obviously, this couldn't be retroactive, but it would be useful for curbing patent abuses in the future.

Re: Docterine of Laches

here [converium.com]

Its been awhile since I've read it, but I believe the thing is .. you can selectively enforce patents, but you also cannot purposely _delay_ litigation protecting your patents such that the delay harms the accused infringer.

Basically means "You are not responsible for policing the marketplace and cannot lose enforcability of your patent by not actively protecting it; however, you are also not allowed to purposely delay protecting your patent. If you become aware of an infringer, you can't sit around for a rainy day when you really need the money to commence an infringement suit."

HSN?

"PanIP LLC's claim that they hold the patent over any automated commerce done by text and graphics on a video monitor."

Couldn't the Home Shopping Network be prior art for this?

Re: Chocolatier Fights PanIP Uber-Commerce Patent

I wonder how long it will be until it's impossible to complete the intellectual property patent checks on *any* innovation before it's obsolete?

This will not be tolerated for long...

As soon as this goes into the media spotlight, PanIP's little game is going to be history. This should set interesting precedents in the realm of patent lawsuits, however..

Not how patents work

The abstract is intended to clarify the patent. The claims are what are legally significant here. Look a bit lower...anything that violates even *one* of the claims infringes on the patent.

Three words: Class Action RICO

If all of the frivolously sued parties got together, they might be able to sue under the RICO statute for treble damages plus legal fees.

Re:Three words: Class Action RICO

RICO also can allow for jail time for company officers. This is a very good option.

Re:Three words: Class Action RICO

WTF?

How is the parent post "Funny"? There's nothing funny about RICO (the Racketeer Influenced Corrupt Organizations act). By suing under this act, the people who PanIP have sued can get triple damages from the officers of PanIP and seize assets, freeze accounts and do all sorts of other kinds of nifty financial punishments. They could also try for criminal charges under RICO and have the officers of PanIP jailed.

I thought of something

I just thought of something. Why don't they sue Microsoft, they sell things online, I bet Microsoft can easily win because they would swamp them with paperwork and the laywers would quit, and they would go bankrupt. They will probably never sue any big corporation. Though I don't know why these e-merchants don't challenge the patients, or who the judge or jury thats letting them win.

If you would have read my post of 2 weeks ago...

I wrote [slashdot.org]:

...to ask about contributing to a defense fund (after reading about this on /. a few days ago). Here's what they had to say:

Thanks for your support. We are currently in the process of setting up the Group Defense and the PANIP Group Defense Fund. We hope to have it set up by the end of this week giving people a chance to contribute online through a PayPal account. The response has been very encouraging.

Stay tuned in and help us spread the word. PANIP thought they could extort money from small businesses without them making much noise. They were wrong.

Timothy Beere
DeBrand Fine Chocolates
http://www.debrand.com [debrand.com]
http://www.youmaybenext.com [youmaybenext.com]


I'll also pick up some chocolates for my wife at their site...that way I can help their business and score some points with the bride at the same time. Double bonus!

Sigh

They're giving us lawyers a bad name!

Oh, wait...

Obligatory website links

The company: Debrand Chocolates [debrand.com]

And of course, what would slashdot be without the... Obligatory Python Link [geocities.com]

Good domain

I can see that domain becoming very useful to a whole heck of a lot of subjects once this PanIP thing runs down. Heck, the EFF could turn over a ton of "hey look what X company is doing" ... like when those guys remixed Beck's music into crazy new stuff and the label for Beck tried to sue them for copyright infringement... (which was of course not true and completely ironic, since Beck himself has been questioned about his sources for musical accompanyment..;])

YouMayBeNext.com

You May Be Next... to get Slashdotted.

Re:YouMayBeNext.com

Now their legal bills can be dwarfed by their ISP bills after the slashdotting!

Dates

The Patent was granted in december 1996.

From About Amazon.com [amazon.com]:

Amazon.com opened its virtual doors in

July 1995 with a mission to use the Internet to transform book buying into the fastest, easiest, and most enjoyable shopping experience possible. While our customer base and product offerings have grown considerably since our early days, we still maintain our founding commitment to customer satisfaction and the delivery of an educational and inspiring shopping experience.

Dell.com started online sales in 1995. Shouldn't spurious use of invalid patents be a criminal offense, up there with Fraud, and Extortion?

And in a more ethereal manner, Redhat.com was doing online transactions (for $0, but a transaction is a transaction) as early as 1994.

~~

Re:Dates

Unfortunatly the filing date is March 16, 1994, so you would have to find prior art to that date.

This patent app was also a continuation to several older applications, some as early as 1984. I am not sure if you have to show prior art to those application dates or not.

Very, very sad.

Check out this list [youmaybenext.com].

Seriously, how can you sue "The Little Pie Company [littlepiecompany.com]" and still claim to have a soul?

Eureka!

I just need to patent the following process:

1) Identify an obvious "technology" that is in the public commons
2) Patent it
3) Extort small businesses via threats of expensive litigation
4) ...
5) Profits

Then I can sue PanIP ! ! !

B.

Good thing

... I still use my old hardcopy terminal then, eh?

Not A Surprise

PanIP first sued about 10 small online merchants in March. That, by the way, was the month PanIP was incorporated.

Its wonderful to see how the American way rewards hard work and Lawsuits.

you may be next

Nice domain name. Is it worth $10 for youmaybeslashdottednext.com?

Accordingly

The original Patent was filed in 1993. However, it would appear that it was directed towards travel and credit applications (i.e. Travel agent bookings and Credit applications) rather than geared towards an online "sale" of actual merchandise. [uspto.gov]The Patent can be found here, and several interesting items of note:

RIOR APPLICATIONS This is a continuation-in-part of application Ser. No. 08/116,654 filed Sep. 3, 1993, now U.S. Pat. No. 5,309,355 which is a continuation of abandoned application Ser. No. 07/396,283 filed Aug. 21, 1989, which is a continuation-in-part of abandoned application Ser. No. 07/152,973 filed Feb. 8, 1988, which is a continuation-in-part of abandoned application Ser. No. 822,115 filed Jan. 24, 1986, which is a continuation-in-part of application Ser. No. 613,525 filed May 24, 1984, now U.S. Pat. No. 4,567,359. This is also a continuation-in-part of abandoned application Ser. No. 08/096,610 filed Jul. 23, 1993, which is a continuation of abandoned application Ser. No. 07/752,026 filed Aug. 29, 1991 which is a continuation of abandoned application Ser. No. 168,856 filed Mar. 16, 1988, which is a continuation of abandoned application Ser. No. 822,115 filed Jan. 24, 1986 which is a continuation-in-part of application Ser. No. 613,525, filed May 24, 1984, now U.S. Pat. No. 4,567,359. This is also a continuation of the combination of the above-cited applications Ser. No. 08/116,654 filed Sep. 3, 1993 and Ser. No. 08/096,610 filed Jul. 23, 1993.

As it appears this has been trying to be processed for quite sometime before it was accepted, and also relies on several prior works.

Good thing I'm using an LCD!

Having skimmed the text of the patent claim, it appears to me that using an LCD monitor would be completely outside the scope of the patent:

The satellite facilities are sales and information terminals, each equipped with a CRT (Cathode Ray Tube) for receiving and displaying requested customer information from the computer's data sources at the data processing center.

So I guess all the web retailers have to do is add a disclaimer that only customers using LCDs or OLEDs are allowed to access the system!

Re:Good thing I'm using an LCD!

it appears to me that using an LCD monitor would be completely outside the scope of the patent

That reminds me...I have to go file a patent...I'll be right back.

One thing that we all can do...

I am sure I won't be the first to say it, but there is one thing that all of us can do here: Remember to stop by www.debrands.com sometime in the next couple of weeks after this Slashdotting has died off, pick out a nice $20 chocolate set for your {girl|boy}friend / your mother / yourself, etc., and support DeBrands. The "why" needs no explanation.

Telling quote from PanIP's lawyer.

From a story [computerworld.com] back in May:

'Though the patents may seem broad, "when you seek a patent, you try to get it as broad as possible," said Walker [PanIP's lawyer]. "You don't want to limit it to just what you think it's going to be used for."'

In other words, the point of filing for patents is to undermine innovation by making them broad enough to cover things you never thought of. To see it put so plainly into words by someone who actually supports this approach makes me sick.

_-_-_

Write to the San Diego District Attorney

I wrote a letter to the San Diego DA (posted it on my web site). You should too. The email address is "[e-mail]". I told a bit of the story, included some hyperlinks and suggested that the DA lay down the law on PanIP. If not for extortion, then for jaywalking, or speeding, or littering, or anything to make these assholes stop extorting money from the public.

Respond with Criminal Charges.

It looks like a pretty good case could be made for extortion under the Hobbes Act. More details are available here. [usdoj.gov]

The gist of it is something like this:

1. Did the defendant induce or attempt to induce the victim to give up property or property rights?
   
2. Did the defendant use or attempt to use the victim's reasonable fear of physical injury or economic harm in order to induce the victim's consent to give up property?
   
3. Did the defendant's conduct actually or potentially obstruct, delay, or affect interstate or foreign commerce in any (realistic) way or degree?
   
4. Was the defendant's actual or threatened use of force, violence or fear wrongful?
   

Naturally item #4 is the tricky one, however: Generally, the extortionate obtaining of property by the wrongful use of actual or threatened force or violence in a commercial dispute requires proof of a defendant's intent to induce the victim to give up property. No additional proof is required that the defendant was not entitled to such property or that he knew he had no claim to the property which he sought to obtain. See United States v. Agnes, 581 F.Supp. 462 (E.D. Pa. 1984), aff'd, 753 F.2d 293, 297-300 (3d Cir. 1985) (rejecting claim of right defense to defendant's use of violence to withdraw property from a business partnership).

So it would seem that PanIP has already behaved criminally by collecting money from other businesses through through the treat of financial damage! Arrest the bastards and throw them all in jail!!!

What about the NABU Network in Ottawa

They did "e-commerce" with NAPLPS terminals, and Ohio Scientific CP/M systems. Surely this is "prior-art"!

ttyl
Farrell

PanIP is just one of many

There is a large Chicago based company owning a patent for shopping carts. All of them. This company is sending demand letters to extort money from small online businesses to supplement their revenue, which is down significantly due to the dot.com bubble bust. Allegedly the small businesses are rather paying the five figure sum than fight it out in courts. The company is purposedly avoiding going after bigger businesses that would have the money and the means to fight back.

Amazon owns a patent for "one-click-shopping" and a bunch of other simple processes having to do with online commerce and is using its power to extort money from its competitors.

What you can do about something like this is to boycott the services and products of such companies. Amazon has plenty of competition, so does the Chicago based company.

Proletariat of the world, unite to kill unethical businesses

what irony...

correct me if im wrong, but is USPTO's website http://patft.uspto.gov/ violating the patent it issued?

if you go to to http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PT O1&Sect2=HITOFF&d=PALL&p=1&u=/netahtml/srchnum.htm &r=1&f=G&l=50&s1=%275,576,951%27.WKU.&OS=PN/5,576, 951&RS=PN/5,576,951 [uspto.gov]

now click add to cart and check out. isnt that violation of the patent right there? wtf?

Web Site Insecure

I was half-way through the checkout process at debrand.com, buying some nice chocolates to help support these guys in their fight. Then I noticed on the page where I'd put my credit card number...It's not encrypted. I sent them an e-mail about this and hopefully it'll be fixed soon. Just a warning to those who have also had the good idea that we can support them and score points with the wife/girlfriend/mom/grandmom/etc. at the same time!

San Diegeo Union Tribune article

The San Diego Union Tribune has an article in today's edition about PanIP. The writer asks questions why PanIP is only suing small companies outside of CA.
Here's a link to the article http://www.signonsandiego.com/news/business/bauder /20021105-9999_1b5bauder.html

Someone's got to stand up to them

PanIP's nothing but a bully, and they won't stop until someone stands up to them.

I know of a roughly analogous situation from a few years ago involving Starbuck's. This isn't precisely analogous because unlike PanIP, Starbuck's is an actual company doing actual business selling actual products that acutally has to worry about its reputation. But the point is that they continued what they were doing until one of the little guys they were beating up on stood up to them.

I am acquainted with the monks of the All-merciful Saviour Russian Orthodox Monastery [vashonmonks.com] on Vashon Island, Washington. Like many monasteries, they have to have some source of income to support themselves. Generally this is a handcraft of some kind, but in this case it's coffee [vashonmonks.com]. Really good coffee, too. Among other roasts, they offer a seasonal blend called "Christmas Blend." So do many other small roasters. Trouble is, Starbuck's had trademarked "Christmas Blend" even though it sounds like a perfectly generic conbination of words, and a few years ago they decided to go after all the small roasters in the country who were using the phrase. Typically they would not only demand they cease and desist, but would demand all income (not just net profit) from the sale of anything called a Christmas blend. One of their victims on the East Coast overheard one of the Starbuck's lawyers remark, "We're going after the monks next," and gave the abbot a call.

The financial effects of this on the monastery would have been disastrous. Fortunately for the monastery (but unfortunately for Starbuck's) the abbot is a reformed Berkeley hippie who knows perfectly well how to put together a grass-roots campaign, and so forewarned he prepared to do just that. His PR skill, their status as a nonprofit, public disgust with a huge corporation going after a bunch small businesses, the draconian nature of their demands, and the absurdity of a group of Christian monks being forbidden to use the name of one of their own holy days for one of their products, all combined to good effect. Editorials were written, cartoons were drawn, letters of support for the monks poured in, threats of boycott were made and carried out. In the end, Starbuck's wound up abandonning their campaign entirely and threw "Christmas Blend" into the public domain, which is where many thought it should have been in the first place.

This, incidentally, is the sole reason I occasionally walk into a Starbuck's. Having once threatened to boycott them even though I had never been a regular customer of theirs, I feel I owe them some of my business since they capitulated.

The point of all this (besides trying to put in a plug for the monk's coffee [vashonmonks.com]) is that it took only a single "little guy" standing up to Starbuck's to stop them in their tracks. It worked in this case, and it may very well work for DeBrand's against PanIP too.

UPDATE: PanIP sues the chocolatiers again....

I donated $5, and got this in reply:
Wow! I was feeling pretty discouraged today after evaluating how much time this fight is taking me away from our business. I go from day to day wondering if the media is going to stay interested in this.

After getting the slashdot post late in the day there was an outpouring of support including many financial contributions totaling over a thousand dollars. And more are coming in as I'm typing this. I can' begin to thank you enough for your support.

I have a lot of fight in me because I believe in what I'm doing and I believe what PanIP is doing is wrong...if not criminal. The defendants that are joining me in this fight have no guarantee of the financial risk we're taking. We simply believe that if we don't stop PanIP now, it will only get harder after they've stung several hundred companies. I'm committed to fighting this so others won't have to deal with the disruption and hassles that I'm dealing with in our business.

I was notified today that PanIP has sued me with a second law suit claiming basically that my web site is defaming their reputation. Can you believe that! Apparently they think they have a patent on free speech as well as e-commerce.

Please stay tuned and help me spread the word. I need your help. We will win!

Timothy Beere
DeBrand Fine Chocolates
www.debrand.com


These guys really are pig-f*ckers, huh? Maybe someone can clue PanIP into the notion that you can't sue someone for telling the truth.