If you are one of the many people who look at cat's-eyes in the centre of the road and wish you were the person who patented them, you're probably not going to be cheered by the news that several entrepreneurial US firms have already snapped up potentially lucrative patents in the field of e-commerce.
Since last March the US Patent and Trademark Office (USPTO) has issued several patents for e-commerce technologies and business methods and since it takes an average of two years between application and granting of a patent, it is safe to assume many more are pending.
US lawyers are reportedly concerned that some of the recent patents represent a shift in patenting practice, covering business methods for the first time.
The first - and probably most wide-ranging - electronic commerce patents issued were granted last March to Open Market, a leading supplier of software for driving Internet sales, based in Burlington, Massachusetts. These three patents cover the use of secure, real-time payments using credit cards over the Internet, electronic shopping carts which allow online shoppers to accumulate a list of goods before paying, and session identifiers, which provide a method for analysing how users browse a website.
Although the real-time payment patent was applied for back in 1993, when few foresaw the use of the Internet for online sales, the issuing of these patents earlier this year sent shock waves around the world of e-commerce. Credit-card sales and shopping carts are commonplace in online sales, but Open Market is keeping quiet about its plans for the patents.
Despite no public announcements since March, Open Market's vice-president of marketing, Mr Bob Weinberger, says: "We are putting in place a licensing programme for the technology, [and] making good progress." He says the shopping cart patent will not be used to prevent other commercial companies using shopping carts, but adds the three patents are useful as they portray the company as one of the major players in Internet marketing.
Mr Weinberger says Open Market will defend the patents if competitors use them, citing IBM for example. While he has no problem with IBM selling products from its website, he would not like to see it using technology similar to Open Market's in its e-commerce software products. He refuses to be drawn on whether there have been any challenges to the three patents, although IBM does sell e-commerce payment software.
Open Market is not alone. The most recent high-profile e-commerce patent was obtained last month by Stamford, Connecticut-based Priceline.com, which last April started an innovative Internet selling business based on buyers naming their price for airline tickets. According to the company, the patent is the first of many filed since 1996 by Walker Digital, also of Stamford, and "covers both the broad concepts and key functionality components of buyer-driven commerce". Priceline.com bought the patent from Walker Digital, both of which are chaired by Jay Walker.
Priceline.com's business received rave reviews in the US press, and has expanded from selling airline tickets to selling cars and even mortgages online. Its services are aimed at the US market. To purchase airline tickets, for example, online buyers go to the company website and enter flight preferences, credit card numbers, and name a maximum price they are willing to pay. Priceline.com then tries to find a ticket to meet the requirements within one hour, and if it does, issues the non-refundable ticket and charges the card. Flights are on what the company calls "major, full-service airlines", including Aer Lingus.
The company says it is receiving more that $15 million (£10.3 million) of guaranteed offers each week, but it is not clear how much revenue this represents. While not all of these offers would result in sales, the buyer is charged the total amount of the request (plus applicable taxes), so the margin for the company on successful sales is the difference between the buyer's and seller's prices.
Another innovative e-commerce patent was also issued last month, this time to CyberGold, a privately held Internet advertising firm based in Berkeley, California. This patent was filed for in 1995, and covers what is known as "attention brokerage", described as "the buying and selling of the attention of users". In practice CyberGold pays money to credit card holders who agree to let advertisers send them advertisements based on demographic information they volunteered.
Adverts you are paid to receive are termed "negatively priced information" by the company, which sees competing advertisers bidding for the attention of online users. The company says more than three-quarters of a million people have registered with it, and is reported to be studying whether rival companies are infringing its new patent.
Some of the recent e-commerce patents are seen as a new departure in patent practice. "A lot of the Internet patents that are coming out are really business method patents," according to Mr Peter Hanna, a European patent attorney with Tomkins and Co. "In the US the software that executes business methods is patentable," he says, but adds that in Europe business methods cannot be patentable without changes to the European Patent Convention.
US patents have no jurisdiction in Europe, but Mr Hanna warned that Irish companies doing business in the US should know what patents are granted there. So, while Europe will not necessarily follow the US lead, this broadening of patents to cover business methods is bound to create additional obstacles for e-commerce entrepreneurs.
Now, what's the online equivalent of a cat's-eye?
Eoin Licken is at elicken@irish- times.ie
