RE: Shopping Carts under a Company breaking the law???

dreamscape <[email protected]> 9 Feb 2003 20:15:20 -0000
Newsgroups gmane.comp.web.oscommerce.laws
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http://forums.oscommerce.com/viewtopic.php?p=110551#110551
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Pangea Intellectual Properties appears to be a business that thrives on filing overly generalized patents (patents must be absolutely specific) and then suing other to make money.  A few years back they sued the airlines, and of coarse lost... now it looks like they are going after small businesses cause they don't have the resources to fight a huge court battle.

[b]Quoted from CB&S Lawfirm's website ( http://www.cblawfirm.com/?wpage=32&aid=31 ):[/b]
[i]Patent Update – "Infringement Lawsuit Poses Threat to Millions of Web Pages" 

Do you or your company maintain a web site on the Internet? Do you use your site to sell products or services? If the answer to these questions is "yes," then a patent infringement lawsuit recently filed against 11 small companies doing business on the Internet may impact the way you do business on the Internet in the future. 

Since the Federal Circuit's ground-breaking decision in 1998 to allow inventors to obtain patents for previously-unpatentable business methods, some legal scholars have predicted a flood of new computer-related, business-method patents and litigation based thereon. The recent filing by Pangea Intellectual Properties ("Pangea") of a patent infringement lawsuit alleging infringement of two of its patents relating to methods for operating web pages and selling products and services on the Internet may indicate that these predictions were not unfounded. 

In 1998, the Court of Appeals for the Federal Circuit opened the floodgates for patent applications seeking protection for business methods with its landmark decision in State Street Bank & Trust Co. v. Signature Financial Group, Inc. ("State Street Bank"). Prior to the State Street Bank decision, business methods, including methods for doing business on the Internet, were generally not considered to be patentable subject matter. With the State Street Bank decision, however, thousands of new patent applications relating to business methods, including methods for doing business on the Internet, have been granted in just a few years. Many of these patents have been widely criticized as being directed merely to the application of computer technology to known business practices and as being too easily granted by a Patent & Trademark Office ill-equipped to handle the flood of new applications for computer-related business methods. Some business method patents have even been critic
 ized as being inappropriate attempts to "own the Internet" which provide a basis for exploitative patent infringement litigation. 

The most recent example of such exploitative litigation may be the patent infringement lawsuit filed by Pangea against 11 small businesses. Pangea's suit claims that the defendants and countless others are infringing a pair of its patents issued in 1996 and 2001. Pangea's U.S. Patent No. 5,576,951 relates to a system for "composing individualized sales presentations created from various textual and graphical information data sources" using "the retrieval of integrated textual and graphical information." Because most web pages utilize such a system, Pangea claims that millions of web pages infringe its patented system. Pangea also holds U.S. Patent No. 6,289,319 relating to a "financial transaction processing system" covering the concept of online payment for goods and services. According to Pangea's suit, if you sell anything on the Internet and use an automated web interface to collect payment information, you are infringing its two patents. 

Pangea's lawsuit is made more controversial because it has chosen to sue small businesses rather than Internet giants like eBay and Yahoo. Many believe that Pangea is going after the small companies because it cannot afford to litigate against the giants. In addition, the small companies are more likely to agree to pay Pangea's demand for a one-time fee of $30,000 to settle in order to avoid legal fees that would probably exceed the $30,000 demand by a large margin. The fact that this is not Pangea's first patent infringement case is also instructive. In 1994, Pangea sued American Airlines claiming that American's SABREvision ticket reservation system infringed some of its patents. However, Pangea lost its case against the airline company, and some of its patents were invalidated in the course of the battle. Unfortunately, it appears that the only lesson Pangea learned from the American Airlines case was to stay way from those with sufficient resources to defeat its lawsuit a
 nd invalidate its patents and instead prey upon smaller companies which will be more inclined to settle the case for strictly economic reasons. 

Pangea is not the first company to stake its claim to owning at least a piece of the Internet (remember Amazon.com v. Barnes & Noble?). Further, it will not likely be the last company to file an infringement lawsuit against carefully selected defendants lacking the resources to defend against a costly infringement suit. We have had first-hand experiences with these types of predatory plaintiffs, and we would be pleasantly surprised if we never heard from another again. But in light of the exponential growth of the Internet's impact on the global economy, it is almost inevitable that infringement lawsuits seeking ownership of a piece of the Internet pie are likely to continue and will probably become more commonplace.[/i]