To any business operating in the field of digital solutions and the protection of the intellectual property (IP) rights around these solutions then US Patent No 5960411 represents a significant landmark in the evolution of the application of patents to digital solutions.
Amazon.com was granted Patent No. 5,960,411 in 1999 for a “Method and System for Placing a Purchase Order via a Communications Network. “. The patent claims a method by which a web site, having previously stored information about a customer, can allow the customer to make a purchase with a single “click” of a mouse. Amazon then sued barnesandnoble.com (B&N) claiming that B&N’s “Express Lane” purchasing method infringed the patent. Legally Amazon secured a preliminary injunction against B&N on the grounds that that it would eventually go to trial where it would claim damages for the loss of business due to B&N breaking their patent. As a result B&N’s Express Lane service offering had to be shut down before B&N even had an opportunity to try to prove that the Amazon patent was invalid.
Many observers believed that the Amazon patent should never have been granted, either because others had already implemented similar systems, meaning the Amazon’s one was not novel, or it could have been very easily implemented by anyone meaning the invention falls the test of non-obviousness. If “one click” could be patented then virtually any approach on the internet could be patented. The Amazon patent cause a mad rush of patents to be filed covering everything in respect of eCommerce and every other internet solution type.
It took over a year but the Amazon preliminary injunction to protect its patent was overturned. Upon an appeal the Appeals Court did not address directly whether or not B&N infringed the Amazon patent but they ruled that there was sufficient doubt about the validity of the patent and that Amazon should not have been granted a preliminary injunction. This should have only be granted if it was thought likely that Amazon would have won the subsequent trial had it taken place relating to the infringement. In the end Amazon and B&N settled the case out of court.
The effect of all of this was to make patents relating to business methods extremely difficult to obtain. But that has not stopped businesses continuing to apply for these types of patent. In fact for any type of internet activity that a business wants to protect from the use of competitors or to support a licensing model these patent applications are still made and in many cases accepted. But the duty of the patent system is to both encourage and reward innovation whilst not constraining the evolution and development of internet solutions by locking down into patents very obvious easily invented methods and processes.
In many cases the use of Copyright covering interface designs, user manuals and procedures can be a more cost effective way of protecting a business’s ideas and creations. Copyright can be used as a legal basis to protect, for the creating business, new and unique innovations. But copyright historically has been very visually based (eg pictures, words) but its application to methods and processes makes it very ineffective as a legal instrument. Although its application to the music industry has been particularly effective especially now music can be easily digitally profiled. If processes can be digitally documented as precisely as music then copyright could become a viable legal instrument although unlike music processes lack a coherent digitised structure. Although processes have been defined in different languages these are far from being standardised to the degree necessary to meet some legalistic verification. It is also most likely that processes will remain very difficult, if not impossible, to copyright due to the fact they are never fully novel and are often too easily invented.
After patents and copyrights the other legal instrument that should not be ignored when looking to protect digital solutions is the Trademark. The Trademark is a particular type of intellectual property (IP) consisting of a recognisable sign, design or expression which identifies the digital solution. Unlike patents and copyrights a registered Trademark can, theoretically, last for ever.
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