eBay Gains Ground in Auction Payment War

Responding to a firestorm of criticism, U.S. Patent and Trademark Office Commissioner Q. Todd Dickinson told reporters this week that enough questions have been raised about the office’s procedures to spur the agency to overhaul its review process for awarding e-commerce patents.

The move toward change comes on the heels of charges that the patent office is strangling e-commerce innovation by granting patents to a few Internet companies for technology and processes that are not really unique or new.

As of now, examiners who review e-commerce applications will be required to search online databases to determine whether an idea is truly innovative, with more improvements slated to follow in the future.

Amazon Assailed

For example, critics have objected to issuing patents for basic Web transactions, such as Amazon.com’s “1-Click” ordering process and Priceline.com’s “name your own price” reverse auction procedure.

Amazon’s shopping tool allows repeat shoppers to purchase items without having to re-enter personal information each time. The company received a patent in September.

A month later, Amazon filed a complaint against Barnesandnoble.com for implementing a similar system. In the suit, Amazon claimed that it had paid a huge price to develop the technology and was therefore entitled to sole ownership.

From there, the controversy was further inflamed when Richard Stallman, an early developer of the Linux operating system, called for a boycott of Amazon in an article posted on the Linux Today Web site.

Do Such Patents Restrict?

Stallman and others objected to Amazon’s patent on the grounds that “it directly affects the freedom of e-commerce.” He also claimed that such patents are for “obvious technology” and that the overworked and undermanned U.S. Patent Office had neither the time nor expertise to recognize that distinction.

The protests intensified last month after Amazon announced that it had also obtained a patent for its affiliate program, which lets e-tailers establish sites within Amazon’s Web site.

Bezos Offers Good Suggestions

After receiving about 400 e-mails regarding Amazon’s patent practices, company CEO Jeff Bezos indicated that the e-tail giant is softening its position.

In an open letter posted on the Amazon.com Web site, Bezos suggested that software and business-method patents should last three to five years — substantially less than the 17-year reach they now have.

Additionally, Bezos proposed that outsiders be allowed to comment on software patents before they are issued. He also offered to fund a software repository that patent examiners could use to determine whether an idea is truly unique.

Response Falls Short

While the patent office quickly rejected Bezos’ suggestions to shorten the life of e-commerce patents, yesterday’s announcement shows that the agency has finally come to recognize that there is a problem.

The patent office is to be commended for responding, but in an industry where innovations can occur every nanosecond, I think the measures are woefully inadequate.

I think the patent office should take Bezos up on his offer to fund a software repository and seriously consider reducing the amount of time granted to certain business-method patents used in e-commerce.

Additionally, I believe the office should enlist more help from the e-commerce community by appointing the CEOs of some of the top e-tailers — as well as such advocates as Stallman — to a commission to study the issue in depth and develop recommendations for a permanent solution.

Without these steps — and perhaps a few others — companies will continue to wage bloody patent wars against one another, snuffing out the very spirit of invention that created them in the first place.