[Ecommerce] Amazone.com patent on "method and system for allocating display space."

[James Love]

http://www.wired.com/news/ebiz/0,1272,58170,00.html

Amazon Eyes Ad-Related Patent

By Joanna Glasner  |   Also by this reporter Page 1 of 1

02:00 AM Mar. 24, 2003 PT

First, it was one-click shopping.

Now, Amazon.com is hoping to patent a technique for parceling out Web 
advertising space through competitive bidding.

In an application made public by the U.S. Patent and Trademark Office 
Thursday, the online retailer is seeking approval for a patent covering 
a "method and system for allocating display space."

The application, which lists Amazon CEO Jeff Bezos as an inventor, would 
cover a system through which a website receives multiple bids for 
advertising space, chooses one bidder, then posts the advertisement 
online. The proposed patent would also cover a method of selecting bids 
targeted to website users with specific interests.

The proposal marks Amazon's latest public foray into the controversial 
realm of so-called business-method patents, which cover a process rather 
than a specific device or technology. In 1999, the company received 
approval for a patent for "one-click" shopping, a method for making a 
purchase over an electronic network using a single action, such as the 
click of a mouse.

Although Amazon has had success in the past getting a fairly broadly 
worded patent approved, Wayne Tang, a patent attorney at Mayer, Brown, 
Rowe & Maw, says it's unlikely the latest application will be granted in 
its current form.

"Usually the patent examiners will require some change to the claims," 
Tang said. Often, the examiners will object to language that could make 
the scope of the patent overly broad.

Another obstacle for Amazon is the heightened level of scrutiny 
examiners now devote to business-method patent applications, said Rajiv 
Patel, a partner in the patent group at Fenwick & West. Examiners are 
now apt to conduct broad searches for prior publications that contain 
the same ideas as those in a patent application.

The policy of intensified scrutiny came in response to criticism that 
companies were using broadly worded patents to demand licensing fees for 
practices that had long been in the public domain.

One well-known case involved a claim by British Telecom, which developed 
and holds a patent on the hyperlink technology used to direct Web users 
from one site to another. A federal judge tossed out a case filed by BT 
against Internet service provider Prodigy in August, ruling that the 
telco's claims were without merit.

Another recent case involves SBC Communications, which sent letters to 
more than 20 websites earlier this year claiming that it holds a patent 
on a popular website design format and seeking licensing fees.

Amazon declined to say what it would do with its advertising-related 
patent, if granted. "We don't disclose what we may or may not do," said 
Amazon spokesman Bill Curry.

If past actions are any indication, the company may try to enforce its 
ownership of the ad-related patent if it's granted.

Amazon was fairly aggressive in attempting to enforce its one-click 
patent. Three weeks after getting the patent, the company sued rival 
Barnesandnoble.com for using an "express lane" feature on its website 
that allegedly infringed on Amazon's one-click patent. The companies 
settled the dispute last year, without disclosing terms, after a 
protracted legal battle.

In a discussion thread on Slashdot.org, many posters were concerned 
about the breadth of Amazon's latest patent application. Some worried 
that, if granted, the patent would make Amazon the only company legally 
permitted to collect bids for banner ads.

Tang, however, believes it's likely Amazon wants the advertising patent 
more as a defensive measure to ward off lawsuits from other companies 
claiming proprietary ownership of similar methods. It could also try to 
seek licensing fees, but would have to be careful not to provoke a 
potential licensee into suing to get the patent invalidated.

Either way, Tang said, it's probably not a pressing issue for either 
Amazon or other companies that might be affected by the patent. In many 
cases, it takes years for examiners to approve a business-method patent.

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-- 
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040