Friday, November 30, 2007

Amazon surrenders on One-Click shopping monopoly [Patent Law]

In October, the US Patent and Trademark Office (USPTO) rejected 21 of the 26 claims of Amazon's famous patent after an Auckland patent enthusiast, Peter Calveley, produced evidence of prior art. The USPTO indicated at the time that two of the rejected claims could become patentable if they were narrowed. These claims, numbers 1 and 11, were the broadest claims in the patent.

Amazon had an opportunity to fight that decision but has now capitulated. In a conference call on 15th November with USPTO examiner Matthew Graham, Amazon lawyers agreed to amend both claims.

The changes "appear to place the claims in condition of patentability," according to Graham's report of the call. "Further review and search would be required," he wrote in his Re-examination Interview Summary (1-page, 48KB PDF).

The prior art evidence that he presented included a patent for a system called DigiCash, filed one year before Amazon's. That patent describes a system where a user has access to electronic cash to purchase items electronically. The reason that five claims in Amazon's patent withstood the challenge of the DigiCash patent is that the DigiCash patent did not propose a shopping cart ordering component, whereas Amazon did. So the USPTO told Amazon in October that two other claims could survive if they were amended to refer to a shopping cart model.

The changes to claim 1 (1-page, 26KB PDF) and claim 11 (1-page, 15KB PDF) mean that the patent will no longer cover any system for purchasing an item "in response to only a single action being performed". If the amendments are approved the patent will cover only an item "purchasable through a shopping cart model". That means that a payment system that does not also offer a shopping cart will not infringe Amazon's patent.

Calveley wrote in his blog last night that the amendments, if made, "will free people to use pre-Amazon methods of 'one Click shopping' such as DigiCash-type systems" and will "allow people to implement new and exciting ways of shopping with one click, perhaps using new technologies that didn't exist in 1997."

Calveley called the shopping cart model "an old technology that needs to be put to bed."

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