Will new data affect Amazon patent case?

ITworld.com –

Does online bookseller Barnesandnoble.com Inc. now have the smoking gun it needs to defend itself against a lawsuit filed by arch rival Amazon.com Inc. over alleged infringement of a controversial patent on one-click shopping technology?

That's the question facing both companies after a Web site that lets companies offer cash bounties in an effort to find information for use in patent disputes said yesterday. A $10,000 reward is being paid in return for so-called "prior art" that potentially could have a bearing on the case between Barnesandnoble and Amazon.

But it remains unclear whether the newly uncovered information, which is said to point to the possible existence of earlier patents similar to the one held by Amazon, will actually be useful to New York-based Barnesandnoble when the infringement suit goes to trial later this year.

"This may play a role in the court case, or it may not," said Tim O'Reilly, founder of Sebastopol, Calif.-based computer book publisher O'Reilly & Associates Inc. and an investor in the patent search Web site that was launched last fall by BountyQuest Corp. in Boston.

O'Reilly personally put up the $10,000 reward for prior art related to the U.S. patent held by Amazon, which covers technology that lets online shoppers place multiple orders without having to re-enter their billing and shipment data. After Amazon was awarded the patent, O'Reilly and others argued that the Seattle-based online retailer didn't invent the one-click process and was merely the first company to register a patent on the technology.

After seeing the submissions made to BountyQuest, O'Reilly yesterday posted a letter on his company's Web site saying that all the prior-art information "submitted specifically for the Web confirms Amazon's belief that they were doing something original" with the development of the one-click technology.

Amazon "appear[s] to have been staking out new territory in ease of use for Web shopping," O'Reilly added. But, he said, Amazon's case in favor of enforcing the patent "is not entirely watertight" and could become more difficult because of his belief that the new prior-art information "sufficiently narrows the scope of what Amazon can claim."

Amazon received the patent in October 1999 and sued Barnesandnoble for alleged infringement two months later. A court injunction barring Barnesandnoble from using one-click shopping technology was issued, but that was overturned on appeal last month. A jury trial in the case is now scheduled to start in September in U.S. District Court in Seattle.

Barnesandnoble officials yesterday declined to respond to questions about the information released by BountyQuest. But in a statement that was released as part of an announcement by BountyQuest, Ron Daignault, an attorney who represents Barnes & Noble Inc., said it and Barnesandnoble didn't have any of the prior art submitted to BountyQuest when their appeal of the injunction was being considered.

"When the clock was ticking [on the injunction appeal], having BountyQuest on our side would have been a real asset," Daignault said. "And of course, the art they found is now available for others to use." Barnes & Noble owns 50% of Barnesandnoble; Germany-based media giant Bertelsmann AG owns the other half of the company.

But Amazon spokeswoman Patty Smith said executives there remain "confident that the one-click patent is valid," despite the information turned up by BountyQuest. She declined further comment on the matter because the case is still pending.

Ironically, Amazon CEO Jeff Bezos is also a financial backer of BountyQuest. After being publicly at odds over the one-click patent, Bezos and O'Reilly said last fall that they decided to invest in the patent search site to try to help resolve similar patent disputes.

Thirty people made submissions in connection with O'Reilly's request for information related to Amazon's patent. None of the submissions provided all the information required to negate Amazon's patent claim, O'Reilly said. But, he added, three provided prior art pointing to earlier patents with similarities to the one held by Amazon.

"It is clear the idea of one-click was out there [prior to Amazon's patent application]," O'Reilly said. But he and BountyQuest officials noted that none of the three prior-art submissions relate directly to Internet uses.

The patents in question include:

-- a 1988 U.S. patent for a data terminal and order placing system that described the use of a remote data terminal to place orders via a function key.

-- a 1994 U.S. patent for an integrated radio satellite response system that allowed orders to be placed using two-way radios and a button or a touch screen on a display.

-- a 1995 European patent for one-click ordering over interactive television.

The $10,000 reward will be split between the three unidentified people who made those submissions. BountyQuest initially said O'Reilly wouldn't pay the reward because all the requirements of the patent search hadn't been met. But after being questioned during a conference call, O'Reilly changed his mind and said the submissions were important enough to warrant payment.

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