Bezos-Backed Site Puts Price on Patents

Amid growing concerns that the U.S. Patent and Trademark Office is ill-equipped to keep up with the demands of the New Economy, Internet start-up BountyQuest is offering cash rewards to individuals who can prove or disprove a company’s claim to a patent.

Launched earlier this week by former patent attorney Charles Cella, the company is backed by Amazon.com founder and CEO Jeff Bezos, as well as publisher and Bezos critic Tim O’Reilly.

“BountyQuest empowers the individual to participate in the patent validation process by harnessing the power of the Internet,” Bezos said.

Needle in a Haystack

The U.S. Patent and Trademark Office is currently responsible for sifting through publicly available records, databases and material published online to determine whether the invention or process in question is actually new. However, because of the sheer volume of information available, these searches can be fallible and may not unearth all relevant information.

“Patents are a double-edged sword. While they encourage creativity and the introduction of new products that improve lives, they can also stifle competition, particularly when they don’t represent genuine innovation,” Cella said.

He added, “Finding information related to patent validity can be like looking for the proverbial needle in a haystack — it could be written in another language, published in an out-of-date technical manual, or hidden amongst other data on an obscure Web site.”

How It Works

Companies looking for information to prove or disprove patent claims can post their requests anonymously on BountyQuest after registering and paying the $2,500 (US$) registration fee. BountyQuest also requires companies to place the bounty in escrow and to pay a commission if someone steps up with the required information and collects the bounty.

The company said that it expects its clients to range from venture capital firms looking to assess the validity of companies they are considering for investment to lawyers whose clients are involved in patent infringement suits.

The Boston, Massachusetts-based company anticipates that its “Bounty Hunters” will include scientists, engineers, professional researchers and people with specialized knowledge. After registering, bounty hunters who are successful in tracking down “fugitive information” can submit a synopsis of what they have found to BountyQuest via an online form and then mail in supporting documentation.

Before collecting the bounty, individuals must provide information that meets all of the requirements set forth by the poster. Bounty hunters are not allowed to submit unpublished or secret information, including trade secrets and internal company memos.

Internet Patent Wars

The emergence of the Internet has produced a virtual deluge of intellectual property infringement lawsuits. A recent survey of patent attorneys by PricewaterhouseCoopers found that 80 percent of the respondents said intellectual property infringement litigation is increasing, and over half believe that the key issues are business method patents or other Internet-related issues.

One of the first legal volleys was fired by Amazon, which claimed that rival Barnesandnoble.com was infringing upon its 1-Click online payment system. Amazon prevailed in that suit, and a judge ordered Barnesandnoble.com to stop using a similar system.

Notably, one of the first bounties listed at BountyQuest was a $10,000 bounty for information about the 1-Click payment system. Breaking the site’s anonymity rule, O’Reilly — who has publicly called for Amazon to abandon its claim to 1-Click — came forward and said that he had issued the bounty.

According to BountyQuest, corporations spend $4 billion per year investigating the validity of patents, frequently after being sued for violating a patent they believe does not represent true innovation.

Listed Bounties

Over 50 bounties are currently listed at the site, with the number of rewards offered totaling $324,159. Among the bounties offered are a $40,000 reward for information on the SightSound Digital Download system, a method of downloading both video and audio files; a $20,000 bounty for information about Priceline’s reverse auction search engine; and a $10,000 bounty for information about DoubleClick’s Banner Ad Patent.

Not all the bounties at the site are for Internet-related products. BountyQuest offers rewards for information about bio-tech products — including bounties of $10,000 each for information on a baldness cure patent and on Viagra — as well as mechanical inventions, including a $50,000 patent for information about reformulated gasoline to reduce emissions.

Although the top bounty currently stands at $50,000, BountyQuest said that bounties could “go higher than $1 million, depending on the value of the information to the company searching for it.”