The e-commerce market faced the prospect of a major shake-up this week with software vendor Open Market announcing three wide-ranging patents which cover almost all aspects of Internet commerce.
The three patents cover real time credit card payments, server-based electronic shopping carts, digital authentication, and Web-based marketing, according to the company.
Open Market, the largest single e-commerce vendor, claim these technologies were used in their Internet software, called Transact 4 and LiveCommerce, in 1995.
With such a broad claim on e-commerce, the company believes that most of their rivals are infringing their patents.
However, a company spokeswoman was keen to play down the spectre of protracted litigation: ?Our preference is to adopt a multiple licensing strategy to enforce our patent rights. We are just starting to approach other companies in the market.?
But big hitters such as IBM have other ideas. A spokeswoman for IBM said its lawyers were currently examining the fine print of the patents. ?We deal with this kind of thing all the time,? she added.
A licensing agreement will only emerge if the patents stand up to intense legal scrutiny. Frederick Keenig 111, a Philadelphia-based intellectual copyright lawyer with Volpe Koenig, said that Open Market have the chance to get the industry giants on its side by offering reasonable licensing agreements: ?It?s either a licensing agreement or sue,? he said.
?If they get Microsoft and IBM to sign a licensing agreement the smaller companies are less likely to fight the patents.?
Analyst opinion was divided on the significance of the new patents. ?A licensing agreement of a penny on every ATM transaction could run into billions for Open Market,? said David Alschuler, head of electronic research for Aberdeen Group
However, Alyse Terhune, research director for e-commerce at Gartner group, said Open Market was no threat to the giant corporations. ?Here we have a company that has not been profitable for years and suddenly it wants payments from almost everyone in Internet commerce,? she said.
?They mention SET in their patents even though similar type technology has supported the banking sector for years. An old war horse like IBM or VISA isn?t going to worried about this, unlike smaller companies.?
She added that Open Market?s patents may be too broad to be legally defensible.
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