IBMs Amazon Lawsuit Using Classic Schoolyard Bully Tactics

 
 
By Evan Schuman  |  Posted 2006-10-24
 
 
 

IBMs Amazon Lawsuit Using Classic Schoolyard Bully Tactics


IBMs recent lawsuit against Amazon for infringing an 18-year-old patent has little to do with attacking the underpinnings of e-commerce, nor does IBM truly believe that Amazon ripped off its ideas. Its just the same schoolyard tactics that have been around for centuries.

Think about the classic advice given to the new boy in school. On his first day, he discovers that the school has the requisite bullies. What he does that first day on the playground will likely set the tenor for the rest of the year. The advice is that he go up to the biggest and meanest bully and stare him down, fighting if necessary. Why? Win or lose, hes sending out a message and making it much more likely the other bullies will leave him alone.

IBM is being painfully honest when it says that the lawsuit is about boosting licensing revenue. A cynical view is that IBM may not even care that much about beating Amazon in court. IBM is negotiating with a large number of e-tailers, trying to get them to pay on some very old IBM patents that anticipated key e-commerce issues, such as Web advertising and online catalogs.

Click here to read more about IBMs lawsuit.

The only reason those e-commerce sites would pay is if they believed IBM would sue them otherwise. In the same way that the typical schoolyard bullys tactical options are usually limited to "ignore," "verbally torment" and "beat up," IBMs weapons against alleged patent infringers are limited to "ignoring," "suing" and "threatening to sue."

By taking on the giant of e-commerce, IBM is hoping that the other sites will think, "If they sued Amazon, then theyll probably sue us, too. Settle." If it wins the Amazon lawsuit, thats gravy. Sweet-tasting and profitable gravy perhaps, but gravy nonetheless.

The patents that IBM says are being violated (included are links to the full texts of those patents) are U.S. 5,796,967: Presenting Applications in an Interactive Service; U.S. 5,442,771: Storing Data in an Interactive Network; U.S. 7,072,849: Presenting Advertising in an Interactive Service; U.S. 5,446,891: Adjusting Hypertext Links with Weighted User Goals and Activities; and U.S. 5,319,542: Ordering Items Using an Electronic Catalogue.

In talking with industry analysts and vendors about the IBM lawsuit, a popular theme is that IBM did something bad when it applied for patents for such obvious capabilities and that this is just because Amazons one-click checkout patent application was a similar overreach.

I must respectfully disagree. First of all, even if the technique was extremely broad and obvious—the one-click Amazon patent might be—its certainly not fair to criticize the company that applies. The patent office is the one that approved it, and any criticism about the wisdom of such a move rightfully needs to be directed there.

Next Page: Give IBM some credit.

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On the IBM patents, however, I think Big Blue deserves even more credit. Take a peek at the actual filings and remember that they were written before the Web existed in any meaningful way, some dating as far back as 1988.

To get our historical landmarkers set properly, lets put 1988 into context. The Web was created by Tim Berners-Lee in 1989. He didnt have a working system deployed until 1990. From 90 to 92, the Web was still a well-kept secret because it was text-only. It wasnt until 1993—when NCSA Mosaic was launched as the first graphical Web browser—that the business world started to take notice. I think of 1994 as when the Web truly started to take off.

With those dates in mind, remember that IBM filed those patent applications back in 88, 90 and 92. Now go back and look at the full texts of those patents. Say what you will about IBM, but those are some pretty impressive and amazing patent applications. Im not saying Big Blue is entirely in the right here, but I think that kind of insight and vision deserves a little respect. (OK, so IBM filed them when it owned Prodigy, so it gets a few debits for that.)

The problem with fighting patent violations is that they are so incredibly easy to avoid. The patents from IBM are incredibly detailed. Amazon can simply argue that it is not doing it the exact same way as IBM described, therefore there is no violation. Is it close? How different need it be to avoid being in violation? Thats where lawyers earn their GNP salaries.

Lets go back to the original premise for a moment. Should an e-commerce player give in and pay IBM royalties for housing an electronic catalog or displaying a banner ad?

Part of the problem here is in the timing. IBM has had these patents for a long time. Why didnt it shout this from the highest Web tree back in 94 or 95? Or 99? Even in the Amazon case, IBM admits that it has been negotiating for more than four years.

To then announce it on the eve of the holiday shopping season—where many retailers make a huge percentage of their money—seems suspicious. Did IBM want to sit silently by while people built elaborate sites specifically so they could charge royalties? How much deliberate silence can be tolerated before it will be considered a surrender of those rights?

Say I own a jewelry store and I watch customers—every day—taking gems from my front counter, and this happens for a dozen years. One day, I point to a customer and shout, "Police! Im being robbed. Arrest that man!" Is the fact that I let thousands of customers get away with it for a dozen years relevant?

Most merchants wont ponder such philosophical issues. "Any new kid willing to push around the Amazon bully probably deserves respect, but he definitely deserves some distance," theyll think, adding, "And to be safe, I think Ill give him my lunch money."

Evan Schuman is retail editor for Ziff Davis Internets Enterprise Edit group. He has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop anytime soon. He can be reached at Evan_Schuman@ziffdavis.com.

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