Patent wars: Amazon.com sued for patent infringement

Gary Barnett, IT Research Director

A British company is suing several e-commerce sites, including Amazon.com for alleged patent infringement. This is another example of a disturbing rise in patent hostilities which could, if they get out of control, result in a global patent war in which only the lawyers will ultimately benefit.

A British company, BTG, that describes itself as an 'IP and technology commercialisation company', announced that it is taking legal action against several online retailers (principally Amazon.com and BarnesandNoble.com) for infringing patents that it holds relating to the tracking of users' navigation between websites

In its press release BTG states that it has filed the suit after failing to reach agreement to sell or license the patents to the defendants. BTG is seeking unspecified damages and an injunction against future use of the technology.

BTG found these patents in the rubble of the dot.com crash. They were originally registered by a company called Infonautics, and although BTG has not disclosed what it paid for the patents, we're doubtful that millions of dollars changed hands.

In simple terms, the patents cover the transmission of the URL (web address) of one site to another. When a user clicks an external link on one site in order to navigate to another, the address of the original site is sent as part of the request so that the next site can use it to determine which site the user came from. This information is used to allow the user to return to the old site, or to pay the owners of the old site a referral fee.

Interestingly enough, a similar technique is used on the website of the US Patent Office, so when researching the Infonautics patents we were sent to the following link which begins: 'http://patimg2.uspto.gov/.piw?Docid=05717860&homeurl=http%3A%2F%2Fpatft.uspto.gov'

This link contains a reference to 'homeurl', which identifies the page from which the link was clicked. This would appear to be somewhat similar to the technique that Amazon is being sued for using. We ardently hope that the US Patent Office hasn't fallen foul of one of the very patents that it, itself, has registered.

On the eve of destruction

Whatever its legal merits, this action forms part of a disturbing escalation in 'patent hostilities' within the technology industry that could ultimately result in all-out patent war. Such a war, in which every patent holder sought to exercise its rights, could bring the software industry to a standstill. So far, this situation has been averted by the calming influence of several patent super-powers, notably IBM, that have a sufficient arsenal of patents to pr ovide a 'patent deterrent' to others in the industry.

However, the dot.com boom, and the subsequent crash, have resulted in the proliferation of patents, and of companies whose sole purpose is to acquire and stockpile them. These 'rogue states' aren't concerned with the welfare of the industry as a whole - their goal is to exact the maximum payment they can for whatever intellectual property rights they possess.

Patent apocalypse

If a full-blown war did break out then the only winners would be lawyers, although even they would probably be obliged to go back to writing their legal arguments on pen and paper. If patent war breaks out, you may as well throw your computers away, since they'll be more or less useless. If every patent were 'exercised' it is hard to see how anyone would be able to write or sell any software at all.

Patents are an essential but powerful tool

We don't deny that patents are an essential means by which a company can protect the results of its research and development, or that those companies have a right to that protection. But we are deeply concerned by the fact that the focus of patent law is moving in an alarming direction.

The primary purpose of patents is to encourage research and development by providing some protection to the people who do it. If, having invested millions of dollars in developing it, your invention can simply be copied by someone else you're unlikely to be all that keen to invest in R&D. So patent protection is an important tool in encouraging invention. However, if taken too far, patent protection can have the opposite effect. The excessive application and use of patents can stifle innovation, preventing people from taking a good idea and making it better. As patents accumulate it becomes increasingly difficult to write any software without inadvertently infringing someone's purported rights. This issue is not exclusive to the software industry either.

The moment when a pharmaceuticals company decides that it is better to invest R&D effort in finding 'additional' uses for a drug in order to extend an existing patent, rather than in developing new drugs, is the moment when patent law begins to defeat its original purpose.

It's time for a fundamental review of the role of patents

The time is ripe for a deep review of the role and purpose of patent law. If its goal is to protect the interests of a few, and to stifle the inventiveness of the many, then perhaps only a few changes need to be made.

If it is agreed that the intent of patents is to encourage inventiveness and innovation by providing reasonable protection to those who invest millions of dollars (and in many cases millions of man hours) in development without stifling the work of others; then perhaps patent law is in need of a substantial overhaul.

Gary Barnett is IT Research Director, specialising in application development, middleware and web infrastructure. He can be contacted on gary.barnett@ovum.com.