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PanIP's patent on
all websites
posted
9:47am EST Fri May 17 2002
submitted
by Thomas
NEWS
Patent law suits are not
a new thing in the computer industry, nor is the misuse of the legal system.
One company, though, is making a reputation for itself for "exploiting
the system." Pangea Intellectual Properties(PanIP) has filed suit against
11 small businesses and claims that countless others could all be sued
next.
PanIP holds patent number
5,576,951, a patent for "composing individualized sales presentations created
from various textual and graphical information data sources" using "the
retrieval of interrelated textual and graphical information." As most Web
pages fall into this category, PanIP claims millions of Web pages infringe
on its patented methods.
PanIP also holds patent number
6,289,319, a patent for a "financial transaction processing system," in
which category the concept of online payment goes. According to PanIP,
if you sell anything on the Internet and use an automated Web interface
to collect payment information, you are infringing on two of its patents.
Part of the controversy around
the situation is the method which PanIP used to pick the first companies
to sue. While there are potentially millions of websites that could be
sued, including such rich companies as eBay and Yahoo!, PanIP has sued
11 mostly smaller companies. For example, it has filed against Dickson
Supply Co., a plumbing and heating supply business. Dickson is family-owned
and operated and employs 25 full-time employees and 10 part-time employees.
PanIP claims to have chosen the cases at random, and says "the patent and
trademark laws don't say you have to go after the biggest fish first."
Many believe, however, that
PanIP is going after smaller companies because they cannot afford the legal
proceedings it would take to get the charge dismissed. PanIP demands a
one-time fee of $30,000 from each business to settle out of court. For
most of the small businesses that fee is less expensive than hiring representation
and paying court costs. For most of these 11 businesses, paying the fee
is the only option because they cannot afford an attorney, court fees,
and lost time.
This is not the first time
PanIP has behaved in this manner. In 1994 PanIP went after American Airlines,
claiming its SABREvision ticket reservation system also infringed on its
patents. PanIP lost that case, and an appeal in 1997. As a result, some
of the patents involved in that battle were invalidated.
The new defendants have until
June 10 to reply to the suit in U.S. District Court. After that, the cases
will go before a magistrate judge who will try to settle the matter without
trial. If that does not work out, the case will go to discovery and on
to trial.
Read more at IDG.net.
THOMAS'S OPINION
You may recall a Slashdot
item about this a while back. One of the guys from Dickson wrote in to
"Ask Slashdot" about whether PanIP had a case. The overwhelming response
was "No," but Dickson employee Matthew Cantalano, who wrote in, had already
explained his company could not afford to sue.
This is horrific. There is
a large population of people within the United States who are not happy
with U.S. patent laws and the fact that they are misused so frequently.
Slashdot is a haven for many such people, as Open Source advocates are
typically keen political creatures who take an interest in IP law. One
Slashdot reader wrote in not long ago to brag that his son had just patented
"Sideways Swinging," which can be seen at the USPTO site.
Think about PanIP's name.
"Pangea Intellectual Properties." They have made a business out of owning
and defending IP. Something must be done to put a stop to this behavior.
A company that simply cannot afford to pay the court costs it would take
to defend itself against a stupid charge should not be so helpless. It's
tough, though. You can't really require qualification for lawsuits, because
that's basically what the trial does. You can't look at the claim and say,
"No, I think this is a dumb case," because you haven't seen any evidence
yet.
In this case I think the
only course of action for these companies is to band together. There are
11 of them. If they all pitched in and counter-sued they might be able
to invalidate PanIP's patent claim, as American Airlines did in the '90s.
They also might appeal to larger companies like Amazon and eBay, which
might benefit from nipping this in the bud.
What do you think about the
misuse of copyrights and patents?
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