Priceline & Expedia Patent Battle Heats Up

swilson writes "Not to be outdone by Amazon, Priceline has sued Microsoft and Expedia for patent infringement of their "name-your-price" business model. You can check out the story on The Standard." To get the facts straight, Priceline sued Expedia in October, and now Expedia/MSFT is filing a motion to dismiss the suit. MSFT is saying that Priceline stole the idea from someone else originally, which is an interesting argument in itself. I think we should make a comic book called "Patent Wars". It'd be like "Secret Wars", except duller.

Stupid Patents

I haven't ever done it before, but I think this is an apporiate response. I think many of us agree in this forum that the US patent laws need serious re-vamping. I don't think I have ever seen (though I may be wrong) anyone suggest writing their congressman/woman. If something in the government doesn't work, let them know about. If many senators get lots of emails/letters about this, maybe someone will take a hard look at it.

My 2Cents

Wow, add a computer, get a patent

It seems that adding a computer to any old way of doing business is worthy of patent or trade secret protection these days. Priceline's model doesn't strike me as radically different from the bidding that takes place on stock exchanges, other than the fact that they have expanded it to a variety of products and services.

If Microsoft had stolen unpublished code, customer lists, internal design documents or the like, I would wish Priceline well. But from where I sit, it looks to me like MS is simply trying to compete in the market niche that Priceline defined.

The name-your-price is terrible anyhow...

I went to priceline.com to check out plane tickets earlier this year as I was planning a trip, and I was totally turned off by the way they wanted to conduct the transaction.

There was no way I was going to name my price, enter my credit card number and automatically buy the ticket before I even was saw what airline it was on. Priceline gave me no way to just shop around for prices - you name the intenerary, name a price and bam, you are charged and you have no choice about anything after that. So, I went to travelocity, where I could actually shop around a bit.
I think this name your price thing is lame, and I can't imagine why anyone would want to fight over it. Especially since they are planning on extending the paradigm to commodities such as groceries - who wants to haggle over a can of soup? Or lose out becaue they were willing to pay more than the going rate, without ever knowing the going rate?

Anyway, this is another case where MS shines in lack of originality. Have they ever thought of anything for themselves? Good ideas or bad, I don't think they have.

The use of patents

One guy, working for a pretty big software corporation, told me the reason why all these stupid patents exist (it was before all these amazon-b&n, priceline-expedia, etc. wars started). Basically, companies used to file them as defensive weapons, pretty much like nukes in the cold war. Everybody realized that most of those patents were idiotic, and nobody was going to start patent wars. But they made it clear that if someone started to sue them for patent infringement, they would couter-sue for some other patent, so it would be a lose-lose situation.

Looks like the new guys don't completely understand such a system. Too bad...

Time for anti-patents? (Maybe a bit OT)

This doesn't really have much to do with this particular case, but with patents in general: especially the fear that they can impinge on the freedom of free software.

Some people have suggested the idea of having an online database of ideas, as a way of providing ammunition to fight patent suits: if you can provide evidence that such-and-such an idea existed prior to such-and-such a date... you get the idea.

I like the idea, but the big problem is that a database in and of itself doesn't really provide much evidence. So I've been trying to think of a practical way of implementing what (for lack of a better term) I call an anti-patent. It would essentially be just like a patent, except that it would be used to prove prior art in patent infringment cases. That way, anything that is covered by an anti-patent you can use with impunity in free software with little fear of litigation (hopefully).

The way it would work is that you would make a submission (like an application) and some research would be done to verify the viability of the submission, then if it "passes", evidence would be collected, dated, notarized (or whatever is legally neccessary), and put into a searchable database.

So far the main problems I've run into revolve around financing the system. How can you make the system cheap enough to be practical, but still provide enough revenue to administer the program? I know that some people would probably volunteer for the project, but in addition to the administration costs, it would be necessary to build up a war chest to fund legal challenges/defenses. How much would people really pay for this (especially since they might already be sacrificing potential income from patenting their idea)? How else can this be funded?

Pantenting business ideas?

This is getting daft. This is roughly equivalent to patenting the "process" of shopping. Patents were meant to encourage the development of gadgets during the industrial revolution. They were never intended for abstract ideas, and certainly not business models. Businesses are meant to compete in the marketplace, and not cushion themselves with artificial legal barriers.

It's clear that there are enough bullshit patents filed for slashdot to run one of these stories every day. It's also clear that patents are a pointless and costly system in an information-centric world.

But it would be nice to see some of the stupidity of the patent system be aired a little more frequently outside the relatively enlightened forum of Slashdot. A bit of grass-roots evangelization is needed. Consequently, I am planning to put up a webpage with a few pointed rants about the present system, and ideas about what it could be replaced with. If you have any views on this that you would like to see aired, mail me at:

[e-mail]

Mother Goose(tm)

Are you sitting comfortably? Then I'll begin.

Once upon a time, there lived three patent lawyers - Daddy Patent Lawyer, Mother Patent Lawyer and Little Baby Patent Lawyer.

One day, Mother Patent Lawyer half-baked them a case, for breakfast, but it was too hot to handle, so they decided to go for a walk through the Trademark Woods.

That same morning, Goldybanks went for a walk through the woods, when she came across a fabulous mansion, complete with swimming pool and wraught iron gates. Being a cracker, it didn't take long to bypass the locks on the gates. (It was using Windows NT.)

Going in, she found three bowls of cooling* bowls of legal cases.

(* Cooling is a process patented by the Santa Claus Christmas Corporation)

She tried the first bowl, and it was too hot. Too much Microsoft. She tried the second bowl, and it was too cold. No money in it. But the third bowl was just right. A dash of e-commerce, and a sprinkling of good PR opportunities.

Control of creative ideas by legislative fiat

The fundamental problem with patenting information is that you cannot exclude other people from having the same (or similar ideas) independently. Technology comes in waves and each wave of ideas builds on the previous infrastructure/memeware left by the previous. Creating a rigid legislative framework for a fluid medium is cause for trouble and only enriches only lawyers. There are a number of problems with the current system. The holy mantra of network effects (ie Metcalfe's Law that the utility of a network increases as the square of the number of participants) encourages companies to create Ponzi schemes to try and create the maximum customer base for their wares (can we say .con here?) on the hope that they can exclude any competitors (a la AOL instant messaging) and sell their customers to advertisers. Patents are just one weapon in this scheme as the speed of penetration translations to market share and any delaying tactics on your competition hurts their growth rates. There are actually some rather interesting theoretical work on modelling word-of-mouth effects as quantum waves but in practical terms, a patent system designed for manufacturing is just not suited for creating new services. Imposing a slow moving legislative process (and there are good reasons why people prefer time to think over complex issues) over a fast mutating technology market is like controlling hot air with a piece of string. I would argue that if Amazon really thought their idea was so hot, they should create the software and license it to other players and let them reap the benefits. If the idea is so simple that people can implement it without paying then it must not have been that novel or distinctive in the first place. Now what are worthy things that deserve protection? I would probably nominate file formats (ie anything stored in permanent form) as in return for making it non-proprietary, the community can award the firm some rights such as naming and/or leadership/respect role. Here one can contrast the reputation of Adobe (Postscript -> PDF) vs SGI (GL -> OpenGL) in their efforts to foster the wider market. IMHO Adobe had a chance to compete with Microsoft in defining desktop document standards (ie interface to printers, especially industrial ones) but blew it while SGI has gone whole hog and freed up their GLX [sgi.com] and Performer [sgi.com] APIs.

Unfortunately companies can measure #patents but not intangibles like goodwill but which is more important in the long-term?. Unfortunately (or maybe deliberately so) consumer education for complex technical stuff like computers has still a long way to go when people can still confuse MHZ (effectively the RPM of the CPU) with the total software/hardware package (ie motor + comfort + millage). Perhaps consumer education is one area where Linux can be more effective, especially in warning against the long-term hard that frivilous patents can cause.

LL

kids.

Sounds remarkably like another set of rules I heard about...

• If it looks like mine, it's mine.
• If I say it's mine, it's mine.
• If I put my name on it, it's mine.
• If I can beat you up and take it from you, it's mine.
• If I got it first, it's mine.

Now I see here at the top it says "Children's rules to toys"... somehow though I don't think it applies to children anymore...

Open Source Patents Project?

Didn't I hear about an Open Source Patent Project? Does anyone know how it's going?

We all know that one way to break a patent is to demonstrate "prior art". However, this doesn't have to be an actual implementation of an idea, it can be a description of an idea placed in the public.

Mighty corporations all have a patent process in place. They encourage their staff to generate patent applications for monetary reward. These applications are then assessed by specialists in said mighty corporations to see if they are worth pursuing seriously. The ones chosen get sent on to the Patent Office.

But the rest don't get thrown away ... they get published - either in technical journals or (publically accessible) online bit-buckets. The idea here is that if they missed a real patentable idea then at least they screw up the patent process for another (competitor) firm by pointing out "hey, prior art, here!"

The OSS community should do they same thing. Have an Open Ideas Database where potentially patentable idea (however "obvious") can be made public and thus no longer patentable.

You don't need to invest the $$$s to get a patent yourself to stop someone else getting one. If the OSS community is serious about long term survival then we need such a database. (Remember MS's Halloween threats to use the "patent weapon".)

Regards, Ralph.

Info from USPTO

Per the USPTO doc Intellectual Property and the NII: Discoveries, laws of nature, mathematical algorithms, methods of doing business and the like are not eligible for patent protection. What the hell's up with the USPTO anyway?

Nonsense. Invalidity is determined case by case.

Microsoft has already been on the business end of a few patent infringement matters, lost one of them (STAC) *IN SPADES*, won one of them (Rehman) with a determination of invalidity on techical grounds, and bought the company (Apple) to settle another.

Here in /.land, invalidity is determined by lockstep ideology and naked allegations of obviousness. In practice, however, one does not argue invalidity in those terms -- you would lose ab initio.

It is common for companies in patent-intensive businesses to be both plaintiffs and defendants, with little consequences derived from positions they have taken in earlier matters. Microsoft will win or lose based upon prior art they actually find and demonstrate, or upon inequitable conduct they can show, or upon proof of non-infringement. These things are argued case by case and things stated in one rarely have an impact on another, unless it is another case relating to the same patent or family of patents.

Arguing merely that the patent is a *bad*, nasty software patent is not something that they will do for three important reasons: (i) it cannot win the case; it cannot win the case; and (ii) it cannot win the case.