E-Commerce Patent Decision Has Far-Reaching Implications

In a decision with global implications, a federal jury in Alexandria, Virginia recently removed a major obstacle to the development of secure electronic commerce.

In February 1999, Surety.com sued Entrust Technologies for patent infringement in federal court in Alexandria. The lawsuit went to trial on October 25, 1999, with Entrust contending that “hash-and-sign” digital time-stamping pre-existed the patent and was therefore not a true invention.

After six days of trial — including highly-technical testimony centering on certain types of cryptography — the jury agreed with Entrust. It decided that the “hash-and-sign” digital time-stamping method was not new at the time of its purported invention and was always the obvious way to time-stamp a computer file.

The jury invalidated Surety’s patent on “hash-and-sign” digital time-stamping and returned a verdict for Entrust.

“This verdict removes a significant obstacle to the further development of secure e-commerce and is a major victory for the Internet community,” said Terence Ross, a partner with Entrust Technology’s law firm.

Big Time Players

Recently, household names priceline.com and Microsoft have been having their own dispute over patent rights. Priceline.com has three patents for its name-your-own-price business, and 17 more are pending. Microsoft Corp. recently unveiled a competing service on its Expedia travel Web site, which lets consumers name their price for hotel rooms.

In another case, Amazon.com, the Internet’s largest retailer, accused rival online bookseller barnesandnoble.com of copying Amazon technology that lets shoppers make their purchases with one click of a computer mouse button.

Global Issue

Intellectual property is a hot topic on the global front as well. Recently, Rod S. Berman, Chairperson of the Intellectual Property Department at Jeffer, Mangels, Butler & Marmaro, one of America’s premier business and intellectual property litigation law firms, was invited to speak in Taiwan on the topic and its increasing importance in today’s marketplace.

“Success in protecting international intellectual property today requires tremendous determination,” Berman said. “It is not enough to exhibit diligence in pursuing innovation or to maintain courage in entering risky international markets; in today’s split-second world, the entrepreneur also requires steadfast vigilance in policing the marketplace for infringement and its accompanying lost revenue.”

New Legislation

With all of this activity swirling about, the Senate Judiciary Committee approved legislation just last week that alters U.S. patent law to give companies at least 17 years of legal protection for their inventions. Additionally, the measure will help companies avoid research and duplication on ideas and innovations that already have patent applications pending.

Key corporate supporters of the legislation included Intel Corp., Amgen Inc. and IBM.