Amateur vs Amazon
OUT-LAW Radio, 25/10/2007
We talk to the amateur patent sleuth who felled Amazon's
one-click patent, and find out how emails in court cases can cost
companies millions.
See also: US Patent Office decimates
Amazon's 1-Click Patent, OUT-LAW News, 17/10/2007
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome to OUT-LAW Radio, the weekly podcast that
keeps you up to date on all the twists and turns in the world of
technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever-changing laws that govern
technology today.
My name is Matthew Magee, and this week we talk to the Lord of
the Rings extra who has felled that famous patent, and look into
the millions that are spent sifting through email in Court
cases.
But first, the news:-
Microsoft abandons anti-trust case
and
UK man seized in file sharing raid
Microsoft has abandoned its opposition to the European
Commission's Anti Trust case against it. The company said that it
will not appeal last month’s landmark ruling by the European Court
of First Instance backing the Commission. The software giant agreed
to changes to comply with the European Commission's decision of
2004 when it ruled that Microsoft had abused its dominant market
position by leveraging its near monopoly in the market for PC
operating systems onto the market for work group server operating
systems. The Commission fined Microsoft €497 million and ordered
the company to disclose on reasonable and non discriminatory terms
the information necessary to allow non Microsoft work group servers
to achieve full interoperability with Windows PCs and servers.
Competition commissioner, Neelie Kroes said that the Commission's
success will change the way Microsoft treats its customers.
Neelie Kroes: Now that Microsoft has agreed to
comply with the 2004 decision the company can no longer use the
market power derived from its 95% share of the PC operating system
market and a 80% profit margin to harm consumers by killing
competition on any market it wishes.
A man was arrested in Middlesborough this week and web servers
seized in Amsterdam in a raid on a website accused of facilitating
unlawful file sharing of unreleased albums.
The site OiNK or “Oink” is accused by record industry body, the
International Federation of Phonographic Industries, of making
album available weeks before their official release dates.
The site was said to have 180,000 paying members. IFPI said that
OiNK was the world’s major source of pre-release albums and that it
was responsible for the unauthorised release of 60 albums onto the
internet before official release dates. A 24 year old man said to
be behind the entire operation was arrested in the Middlesborough
area from where it is alleged he controlled the site. Dutch
police were also involved in the operation, they seized servers
allegedly belonging to the website.
That was this week's OUT-LAW News.
It is an unusual phenomenon for something as obscure, difficult
and technical as a patent to be become famous, so that accolade can
only really attach to one patent in the technology world. It is
Amazon.com’s one click patent which said that Amazon had invented
the ability to purchase online with one click of the mouse. In the
late 1990’s Amazon’s aggressive assertion of the patent against
Barnes & Noble was something of a cultural turning point.
For one thing it showed just how hard till then bubbly and
fund.com’s were prepared to fight against competitors. It also
showed that the new companies were just as adept as industrial
behemoths at conducting intellectual land grabs for territory mere
mortals would consider just a natural part of business. Who would
have thought then that this totemic patent would fall in such a
way. A performance artist in New Zealand has just won the first
round of a fight to scratch the patent from the register, and as we
will soon hear he did it not for money or vengeance or cruelty, but
because he was bored.
Peter Calveley is an Auckland performance artist and actor who
is a model for one of the digitally reproduced evil armies in the
recent Lord of the Rings films. Irritated at the late arrival of a
book from Amazon 18 months ago he looked a little harder at the
company. He has long had a hobbyist's interest in patents and began
looking into whether Amazon really deserved one for its one click
technology. Had someone else described such a technology before
Amazon, which Calveley felt sure they had, then the patent could
not be valid. He set out on a search.
Peter Calveley: Well, I found some evidence
that some of the things that Amazon had claimed in their patent had
been invented and in fact used earlier, and so I filed a request
and asked for a quick re-examination.
A quick re-examination is where someone asks for a patent to be
looked at again and can submit evidence that someone published an
innovation before the patent holder. Called "prior art" this can
invalidate a patent. Calveley did just this and the US patent
office has just said that 21 of the one click patents, 26 claims
have been rejected. Calveley had only asked for the rejection of 5
or 6. Amazon still has the opportunity to come back with its own
case but it is a devastating blow for a financial and technical
David against Amazon’s Goliath. Calveley’s pleased but says that
there is some way to go yet.
So how did he find his evidence of prior art?
Peter Calveley: Well, it was not that difficult
because I am kind of interested in US patent law. Finding all the
prior art and making sure that it complied with the evidence laws
of the US, that took a little bit of work. One of the interesting
things about the US law at the moment is that they have a first to
invent rather than a first to file system. So you are never
actually sure of your priority date, or what the priority used to
be and the payment system that was actually implemented and used
around the world called Digicash which was invented by
Cryptographer called David Chelm, and the thing that it was most
famous for was the fact that it had anonymous electronic cash back
in the early 90’s, and the feature which you get to actually enable
shopping was a single action. They did not even think of patenting
it, they thought that it was just such a minor feature. One of the
pieces of prior art filed was a magazine by Stephen Levy which
describes an online shopping section where you buy something with a
single click and it was downloaded to your computer and this is
what the examiner has largely relied on.
The location of some of his most valuable information provided
Calveley with a source of rich irony.
Peter Calveley: Archive.org. Yes, the way that
machine which archives web pages was especially useful and the
irony being that all the information for this was provided by a
link that which is a wholly-owned subsidiary of Amazon.
Calveley says he does not stand to gain financially at all from
the ruling. He raised the $2,500 fee for the re-examination through
donations from readers of his blog and has returned any money sent
since then because he currently does not have any expenses in the
case. So why on earth did he take the case in the first place?
Peter Calveley: Well, I am in New Zealand and
New Zealand is a very boring place and you have to come up with
something to do. I was playing with the idea and then I got annoyed
by this book that was a bit late, so I thought, why not?
Well, few people dispute the value of the idea of patents and
the US technology industry that are increasingly calls for a reform
of the way patent law actually operates. Many people watch how
patent owners can stifle innovation or charge licences for
seemingly obvious inventions and say that patents are rewarded too
easily in the tech sector and when awarded cover too broad an area.
The trouble is that apart from a very limited initial period third
parties can't tell patent examiners of examples of prior art.
Calveley though has found a way to do this after a patent have been
issued by asking for a re-examination, something he says anyone can
do. That he has found this method, that he has done it as an
amateur on a tiny sum of money raised via small PayPal donations
from the web could prove an inspiration for others who want to take
action on patent they think are harmful. Calveley said he is not a
patent zealot and may not ever use the process again but he does
see its value for others.
Peter Calveley: Well, I think that people who
have a lot, there are a lot of people out there who has amazing
expertise knowledge of the prior art and they are just not applying
themselves to opposing patents when they really could. But I do
think that re-examination can give you a lot of bang for your buck
as compared to litigation in court.
As for Amazon, they all have their chance to argue their case in
the coming weeks, but perhaps next time they have a delivery to
remote areas where people might be bored, they will make sure the
book gets there on time.
If you are caught up a law suit now the evidence trail can run
right through your email inbox. All you might squirm at some of the
personal messages that turn up your boss is more likely to be
concerned at the cost. KPMG forensic had discovered that the cost
of e-disclosing court cases can run to millions of pounds. The
people of this office might appear more efficient but litigators
think otherwise according to KPMG’s survey. That company’s head of
forensics Paul Tombleson says he has seen individual cases with
million pound e-disclosure bills.
Paul Tombleson: The figures that we’ve compiled
suggest that a large proportion of cases would be above £500,000
from an e-disclosure perspective and I could number above £1
million. That could be on a number of cases but my experience is
that it is not uncommon with large cases to certainly for the cost
of e-disclosure to be in six figures and often in seven
figures.
It is now two years since the civil procedure rules on
e-disclosure were introduced. The core problems said Tombleson is
the sheer volume of communication that all workers face today.
Paul Tombleson: In the paper age we were not
receiving 300 emails a day, whereas in the old days and the paper
disclosure exercise you probably would have gone to the key people
in the organisation and said “can you find me the paperwork on this
particular issue” and they would have pulled open their drawer next
to their desk and handed you a bundle of papers. Now you have an
obligation to search through masses and masses of electronic
documentation to maybe find 1% or 2% which might be relevant.
Trawling through that lot costs money and lots of it. So what
can be done? Well, there is sophisticated filtering technology that
can be used but Tombleson’s top tip is something simpler and
cheaper, it is to meet the enemy and talk.
Paul Tombleson: We found that over a quarter
nearly 30% of people all were meeting at the Case Management
Conference for the first time or even after the Case Management
Conference. Before you start thinking about what was the technology
you are going to use or launching into the process itself agree to
limitations around what you are actually going to capture in
exchange and potentially undertake a pilot.
That is all we have time for this week. Thanks for listening.
Why not get in touch with OUT-LAW Radio? Do you know of a
technology law story? We would love to hear from you on radio@out-law.com. Make sure you
tune in next week for now, goodbye.
OUT-LAW Radio was produced and presented by Matthew Magee for
international law firm Pinsent Masons.
