About four years ago, Pittsburgh-based Software Management Inc. applied for a sweeping patent for online registration services. Finally, the U.S. Patent and Trademark Office has ruled sort of. In fact, the issue remains up in the air.
In the ruling, the patent examiner denied the voluminous application, citing it as a case of “double-patenting,” but also noted that the office has not yet given such a patent to anyone else, either. The action is “non-final,” allowing SMI to respond to the rejection letter, which it did in September in a 27-page document essentially reiterating why it feels it deserves the patent. The issue now is once again mired in the mess of technology applications at the Patent Office.
When SMI filed its application in October 2001, it claimed ownership of methods of organizing and operating virtual conventions. It also wanted ownership of procedures such as attendee registration for such shows. The claims extended to online registration activities for physical (vs. virtual) trade shows conducted live at convention centers and other such facilities. In other words, all aspects of meeting planning in conjunction with use of the Internet were covered in the application.
In my October 2002 M&C column (“Patent Claims, Real or Not?”), I noted that if SMI won the patent, any organization using such technology would owe that company quite a bit of money. Indeed, at the time, SMI sent out letters claiming infringement of its patent-pending intellectual property and asked online users for $1,250 or more in payment per event.
Some scoffed at SMI’s application and advised recipients to ignore the letters, while others warned of the risk of enormous liabilities in the future and recommended paying SMI’s charges.
An issue at the heart of the SMI case is that of “prior art,” which basically means an invention or process is not patentable if others already have been using it. Many observers contend that the concepts and information SMI is trying to patent have been around for a long time.
The question of intellectual property rights in relation to the Internet is further complicated by the continuing blizzard of applications pouring into the Patent Office for hundreds of technologies having many similarities. The so-called “patent thicket” includes products that would require dozens, even thousands, of separate patents. This has led to an overlap of applications, with multiple patents blocking other multiple patents. This is where SMI’s claim is stuck.
From February through November 2002, the U.S. Federal Trade Commission conducted hearings related to software patent reform. The result was a 315-page report, followed by an 18-page executive summary titled “To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy.” While the report called for policy reform, it gives no indication that the Patent Office will make a final ruling on applications like SMI’s anytime soon.
What to do in the meantime? Read the fine print of any contract with a web service provider. Does it address the possibility of infringement claims? Keep accurate records of all your transactions involving anything having to do with your web-based meeting activities.
Finally, watch the mail. You, too, could receive a letter claiming you owe royalties. But SMI has no rights to receive those fees unless and until it is granted a patent. Should SMI be successful, look for an article from me on how the company could seek retroactive royalties.