Apple, Starbucks sued over custom music gift cards

[AppleInsider]

A Utah couple acting as their own attorneys have filed a lawsuit against Apple and Starbucks over the retailers' recent "Song of the Day" promotion, which offers Starbucks customers a iTunes gift card for a complimentary, pre-selected song download.

In a seven-page formal complaint, James and Marguerite Driessen of Lindon, Utah say they developed in 2000 (and successfully patented in February 2006) a utility dubbed RPOS, or retail point of sale, for Internet merchandising. The concept, which forms the heart of the infringement lawsuit, would allow gift cards for pre-defined items that can be sold at a brick-and-mortar store but used online; customers could redeem a card for a dining room set or a DVD, for example.

But while the patent was under review, Apple had developed its own similar concept for iTunes Custom Cards. Unlike its past general-purpose gift cards for the iTunes Store, the Cupertino, Calif.-based company's then-new cards allowed shoppers to buy a card for a specific artist's album or song, complete with custom artwork.

This apparently direct comparison led to legal pressure from the Driessens, who asked Apple to license the patent once it had been granted -- only to learn after discussions that Apple had simply pulled the iTunes cards from stores in the US, leaving the products on UK shelves alone and the Driessens without the possibility of a licensing deal.

An illustration of the Driessens' patent on gift cards.

To the plaintiffs' surprise, however, Apple appears to have simply resurrected the American version of the concept under a different name more than a year later, in November 2007. Called a Digital Release Album, the card was once again tied to a specific iTunes song or complete record.

An iTunes Digital Release, from 2007 (top); iTunes Custom Cards, from 2005 (bottom).

In releasing these cards, the Driessens say, Apple is simply hoping to skip royalties by implying that customers can claim songs with a notebook computer, iPhone, or iPod using the iTunes Wi-Fi Music Store at a local Starbucks coffee shop, bypassing the need to return home. Though superficially different, this is just an infringement of the patent under a new name, the lawyers argue.

Starbucks is said to be a complicit partner in the infringement as a willing distributor, selling the cards across the US and holding its "Song of the Day" promotion to encourage purchases of the allegedly infringing iTunes cards.

Apple has not publicly responded to the charges made in the lawsuit, which would bring the complaint to a jury trial and ask for triple the normal damage compensation as well as issue a permanent injunction barring both Apple and Starbucks from selling the offending cards. However, it's notable that Apple's Starbucks and WI-Fi Store sites aren't believed to have referenced the cards, and in current form only spur customers to buy directly from iTunes itself.

Separately this week, Apple was also subject to another suit with seemingly fewer merits, this time manifesting itself in the form of a four-page complaint by John Martin of Rockford, Illinois.

The plaintiff in this second lawsuit accuses the iPhone maker of infringing on a patent for controlling an electronic game system with a finger-release touchscreen serving as the control mechanism. In selling one or more similar products -- which are unnamed in the document but may include the iPhone and iPod touch -- Apple is knowingly drawing on at least some of the patent for its own unlawful gain, Martin's representing law firm says.

As with the Driessen suit, this new case would block Apple from selling any of the alleged infringing products and would look for both royalties as well as "enhanced damages" to compensate for the perceived losses.

[ View this article at AppleInsider.com ]

[MsNly]

Originally Posted by AppleInsider

The plaintiff in this second lawsuit accuses the iPhone maker of infringing on a patent for controlling an electronic game system with a finger-release touchscreen serving as the control mechanism. In selling one or more similar products -- which are unnamed in the document but may include the iPhone and iPod touch -- Apple is knowingly drawing on at least some of the patent for its own unlawful gain, Martin's representing law firm says.

[ View this article at AppleInsider.com ]

They haven't made any games for it!

That has no merit

[Kasper]

Originally Posted by MsNly

They haven't made any games for it!

That has no merit

We mentioned that it lacked merit =P

Best,

K

[MsNly]

Originally Posted by Kasper

We mentioned that it lacked merit =P

Best,

K

Lacked?!?!

It and merit shouldn't be in the same sentence!

[ianmac47]

This is a good example of how issuing patents has gotten out of control. There is nothing substantially innovative about the the business model.

[dreyfus2]

Originally Posted by MsNly

They haven't made any games for it!

That has no merit

Hmm, it has been called a game-changing device... given the incredible amount of human sense in patent laws, this might suffice

A caste developing terms like "enhanced damages" is of no value to mankind.

[SpamSandwich]

F*** 'em if they can't take a joke.

[lowededwookie]

I don't live in America but can I take out a class action lawsuit on stupid money hungry gits with the intelligence that make a blade of grass proud not to be them?

Seriously America, sort your patent system out because it's screwed big time.

Oh and by the way I'm going to patent the idea of taking out a class action lawsuit on stupid money hungry gits with the intelligence that make a blade of grass proud not to be them but because I'm a nice guy I'll allow people to use it royalty free.

[Peruchito]

i am not from the US or familiar with your patent laws, but since reading about the lawsuits to apple for the past year, basically, my understanding is that i can file a patent for all my crazy ideas, and just sit on it until someone does it and then sue them?

[TenThousandThings]

The idiocy of the patent's approval aside, the model depicted does not really depict what Apple is doing. They are both the web content dealer and the retail store. There is no transaction taking place for the access keys before the retail sales.

The Driessens' patent isn't about a gift card for a specific product. I mean, there must be hundreds of examples from before their application in 2000. So the patent is for something else. I guess that would be the model of a retail store making a deal to sell someone else's web content with a gift card. Apple isn't doing that.

I'd guess that this is a direct outcome of the new deals with the movie studios for rentals. Apple wants to sell movie gift cards in the retail Apple Stores -- the card gives you access to the movie rental, with an option to buy. Something like that. The potential for this is much greater for movies than music, IMHO.

[Bergermeister]

I have just patented breathing.

Thanking you in advance...



The US is out of control in regards to patent law as it does seem that you can patent just about any insane idea that pops into your head, never do anything with it, wait until somebody else actually achieves something with it and then make money off of their efforts.

Guess that is the new Amerikan dream...

[Wiggin]

I think, depending on the details, this one as far more merit that most of the lawsuits we read about here. Still, the idea of gift cards for specific items isn't really new. Sure, most gift cards/certificates are for a certain dollar amount, I've received them for messages and such. So it may depend on whether the "online redemption" is novel enough to warrant a patent, or just the natural combination of gift certificates for specific things and online redemption of cash gift cards.

I would think not; but still, like I said, at least this one shows a small amount of legitimacy to it.

[Rot'nApple]

Originally Posted by ianmac47

This is a good example of how issuing patents has gotten out of control. There is nothing substantially innovative about the the business model.

...holding my breath... -


AGREED! There should be some law that says you patent it, YOU make something out of it.

This 'having an idea', getting it patented and expecting Royalties from another that takes the chance of utilizing some form of a patented idea and makes a product that becomes hugely successful needs to be rethought.

I'm not against some small form of compensation but if one uses a patented idea in a product they utilize and it becomes a marketing flop and plumetting sales cause the loss of major bucks invested, does that mean the reverse can happen and can Apple legally go after all these smaller patent holders that might have been used in some form and can Apple ask of them for compensation for their loss? I know I am being absurd, but no more than the most recent suits filed against Apple!

[Rot'nApple]

Please tell me there is more to the "patent" then a few paragraphs and a kooky flow chart diagram of the Driessen's 'idea'???

Like the link below of an article regarding a 23 year old coming up with an idea of a "boom Box" speakers for the iPhone / iPod touch. He has an idea that results in an actual product, a more professional diagram and he is looking for a manufacturer to produce his idea that he is already marketing. He is taking a huge chance with his product that is based on the eco system that is iPhone. I wish him luck in his endeavour and hope it turns out for him as well as it has for the creator of DLO and it's products.

http://www.iphonealley.com/news/live...sed-for-iphone

The Driessens didn't even bother to produce actual gift cards to "sell" to Apple / Starbucks.

[roehlstation]

Heck, I had this idea 8 years ago....when I was drunk....and asleep.

[lfmorrison]

Originally Posted by ianmac47

This is a good example of how issuing patents has gotten out of control. There is nothing substantially innovative about the the business model.

Having read over the patent in question, I am simply appalled that it was granted in the first place.

http://www.freepatentsonline.com/7003500.html

Originally Posted by Rot'n'Apple

The Driessens didn't even bother to produce actual gift cards to "sell" to Apple / Starbucks.

They don't have to. Presuming the patent is valid (and now that it has been approved, we must do so, unless and until it is proven otherwise), they don't have to sell any physical thing - all they have to do is decide on a case-by-case basis, whether or not they are willing to sell a license to others (like Apple/Starbucks) for permission to use their ideas.

It is interesting to note that, in this case, they seem to have tried to actively protect their patent right from the outset, by contacting Apple back in 2005 when the first rumblings of the new service were coming out. Apple backed down initially, and then decided to go ahead with it anyway.

I have more respect for these patent holders than I do for some others, who seem to delight in waiting for a product to become highly entrenched before coming out of the blue with no prior notice, and trying to muscle into the action.

However, once again I repeat that I am shocked and disappointed that they weren't laughed out of the Patent Office on day one of their application for this particular idea.

[jeffharris]

It looks like somebody open the weasel cage.

This is ridiculous.

There have been gift certificates of various types for years.
Yeah, even BEFORE personal computers and Apple and the internet and iTunes and Starbucks or even this parasitic pair.

[retroneo]

Obama wants to reform the patent system. It's not hard to see why...

[jpellino]

that's a patent drawing?

please.

i wish i'd patented buying a cup of coffee from a human with a piece of green paper.

seems about as viable.

[TX65]

The patent bureau is on a roll issuing general process patents that lack any unique creation.

Did these people invent gift cards? no.

Did these people invent gift cards that can be redeemed online? no.

Did these people invent the internet? no.

Did these people invent e-commerce? no.

Did these people create or design any specific technology? no.

The fact that the US Patent Office issued a patent solely based on the concept of a method of commerce without any unique technology that these people created is insane. What is really insane how the patent can be applied to such diverse purchases as a dining room set or a DVD.

What would happen if you went into a store and bought a gift card used to pay online your flat rate phone service bill? These people patented it.

What would happen if you went into a store and bought a gift card for a large pizza that you can go to Pizzashack.com and order your pizza for delivery and use the gift card as payment... oh, cant do that,,, it violates their patent.

Another example of people that are leeches on society. Oh, thats right they seem to be lawyers.

[ghokie]

As a APPL stockholder, I would appreciate it if everyone that's commented above would please seek employment in the US Patent Office. If that is not possible, try to get on the jury.

I'm not an attorney, and I don't play one on TV, but I cannot believe it's possible to patent such a general idea - I thought it need to be a specific process or method to could be patented, and even a slight but material variation to the process would avoid an infringement.

These people suck.

[Marktrek]

This just sounds like a marketing plan. How do you patent a plan?

[jbh0001]

Originally Posted by TX65

What is really insane how the patent can be applied to such diverse purchases as a dining room set or a DVD.

What would happen if you went into a store and bought a gift card used to pay online your flat rate phone service bill? These people patented it.

No, they didn't. This is a bad example because it too easily falls under the "general-purpose gift card" category.

Originally Posted by TX65

What would happen if you went into a store and bought a gift card for a large pizza that you can go to Pizzashack.com and order your pizza for delivery and use the gift card as payment... oh, cant do that,,, it violates their patent.

Correct. The devil is in the details of "pre-defined items." Whether the patent office should granting patents for business or transaction models or "intellectual property" is not the point. They did. And here we are.

What makes this atypical from most patent litigation we hear about is that this couple was proactive in protecting their rights instead of waiting for Apple to get entrenched in their patented business model. Their proactiveness makes Apple look like Leona Helmsley regardless of whether or not such a patent should have been granted in the first place.

Then again, perhaps Apple is purposely flaunting its violation of the patent in order to challenge it (I doubt it though).

Besides how different is this patent from the one Apple filed for the gestures used on their new track pad? Both are patents for a "method of doing something." With that logic, maybe you could get a patent for "a method for wiping one's butt." (Personally I prefer the four finger un-doo rather than the three finger swipe, though I know there are those that undoubtedly prefer the two finger scroll --all with toilet paper, of course.) Then again the patent would probably be denied on grounds of prior art.

[freelander51]

Originally Posted by Marktrek

This just sounds like a marketing plan. How do you patent a plan?

Worse : there has been previous art. My company ran a campaign similar to the described in the picto back in 2001 with Samsung in Belgium.
When customers purchased a Samsung phone at the POS they got a scratchcard to redeem free ringtones on a WAP site. OK in this case they did not have to pay for it - but the card had a barcode so it could be scanned and it could have a commercial value attached to it.
So if any they copied my "unpatented" idea.
It is my firm belief that 'trivia' patents and/or patents on general ideas should be banned altogether. They are ridiculous, a nuisance and -worst of all- inhibit progress.

[jbh0001]

Originally Posted by freelander51

Worse : there has been previous art. My company ran a campaign similar to the described in the picto back in 2001 with Samsung in Belgium.
When customers purchased a Samsung phone at the POS they got a scratchcard to redeem free ringtones on a WAP site. OK in this case they did not have to pay for it - but the card had a barcode so it could be scanned and it could have a commercial value attached to it.
So if any they copied my "unpatented" idea.

No, they didn't unless your card allowed them to redeem only one specific ringtone. If there was more than one option, it falls under the "general-purpose gift card" umbrella. Go back an look as what Apple is doing. The cards are only redeemable for a specific song or specific album, not just "any one song," or "any one album." Big difference because it departs from "general-purpose" to "pre-defined."

[lowededwookie]

Originally Posted by Rot'nApple

There should be some law that says you patent it, YOU make something out of it.

That's pretty much how the rest of the world does it. America is one of the very few countries that allow you to patent an idea and it is pure bollocks.

I know here in New Zealand you can't patent an idea without a working prototype and New Zealand sits on some pretty awesome patents (like the process for making carbon fibre which was invented by John Britten for the construction of his Britten motorcycle and was even used in the New Zealand America's Cup yachts).

The very idea of patenting an idea alone is a joke on account of the fact that more than one person can have the exact same idea. Basically it's designed for capitalists who, instead of furthering technology, use the patents solely to gain money by litigation without ever using the idea in the first place.

I hope this case bankrupts these morons.

[freelander51]

Originally Posted by jbh0001

No, they didn't unless your card allowed them to redeem only one specific ringtone. If there was more than one option, it falls under the "general-purpose gift card" umbrella. Go back an look as what Apple is doing. The cards are only redeemable for a specific song or specific album, not just "any one song," or "any one album." Big difference because it departs from "general-purpose" to "pre-defined."

That is splitting hairs IMHO. Back in those days we could have offered just one particular tone - but we offered a choice of ten. I really fail to see how limiting one's choice by sticking just one face on a pre-paid card is worthy a patent. It's a good marketing idea - but a patent that bogs down the rest own mankind for 50 years (or force them to pay licenses).
Can someone tell me on what cloud/island those people at the USPTO live ?

[freelander51]

Originally Posted by lowededwookie

Basically it's designed for capitalists who, instead of furthering technology, use the patents solely to gain money by litigation without ever using the idea in the first place.

I hope this case bankrupts these morons.

This is very unlikely to happen as more and more private equity and hedge funds are pouring money into patent trolls. Granted - you may loose few cases. But you just need one big winner and you got your phenomenal ROI

[Dunks]

And next on CNN our reporters speak with a Utah lawyer currently not planning a lawsuit against Apple.

[godrifle]

Watch your inbox, because I've got a patent pending on being drunk while asleep.

Originally Posted by roehlstation

Heck, I had this idea 8 years ago....when I was drunk....and asleep.

[Hattig]

The type of things that can be patented really needs to be restricted.

This seems to be a patent for a concept of an action. There's nothing solid about it.

It's like patenting "A device that emits light". Nothing specific, except a diagram of something, emitting light. The lightbulb is invented, and you sue, having done no research of your own, generated no purchasable solution, etc.

Concepts are easy. You could patent every idea in Sci Fi books for the past 50 years. Clearly being able to patent an idea is not right. You should only get a patent if you can demonstrate a working implementation of your idea, and then the patent should be restricted to that implementation's methodology. If you patent the conventional lightbulb, then an LED light shouldn't infringe, because the patent is about "heating a filament until it glows and emits light" and "inside a protective bulb that also houses an atmosphere that will not corrode the filament".

[ericblr]

Originally Posted by Rot'nApple

...holding my breath... -


AGREED! There should be some law that says you patent it, YOU make something out of it.

This 'having an idea', getting it patented and expecting Royalties from another that takes the chance of utilizing some form of a patented idea and makes a product that becomes hugely successful needs to be rethought.

I'm not against some small form of compensation but if one uses a patented idea in a product they utilize and it becomes a marketing flop and plumetting sales cause the loss of major bucks invested, does that mean the reverse can happen and can Apple legally go after all these smaller patent holders that might have been used in some form and can Apple ask of them for compensation for their loss? I know I am being absurd, but no more than the most recent suits filed against Apple!

Good idea, and I think the easiest way to achieve that is by putting an expiration date on any patent you file, so if you dont do anything with it, you lose.

[sparhawk]

Patents have become a monster all by itself. Common logical things shouldn't be allowed to be patented anyway. I hope some organ can overturn this monstrous thing and tune it towards it was made for.

[lfmorrison]

Originally Posted by lowededwookie

I know here in New Zealand you can't patent an idea without a working prototype ...

And, given the relative simplicity of this patent, it is very likely that they did have a working prototype. Or they were able to demonstrate to the examiner that it would be trivially easy to move from the planning stage to a working implementation, and thus they were able to skip the formal prototyping stage for the purposes of the patent. It doesn't follow, though, that they were then obliged to commercialize the prototype themselves.

Originally Posted by Rot'nApple

There should be some law that says you patent it, YOU make something out of it.

But the whole reason behind patents is to protect the inventors' investment. The law goes the other way around - YOU invent it, NOBODY ELSE can use it without your permission. Isn't giving permission (or withholding it) a form of "doing something" with it?

What we need is a better standard of what constitutes a patentable idea, and a more accessible means for allowing interested parties to formally request re-examination of patents with dubious merit.

Originally Posted by ericblr

I think the easiest way to achieve that is by putting an expiration date on any patent you file,

Well, the good news is, there is an expiry date on every patent that is granted. The bad news (in this case) is, that expiry date in the US is (IIRC) 20 years.

[suhail]

Originally Posted by ianmac47

This is a good example of how issuing patents has gotten out of control. There is nothing substantially innovative about the the business model.

Bingo!
There is nothing innovative, this is evolutionary.

[ncee]

Does this mean I had a better case against Harley then I was lead to believe

I once sent a proposal to Harley for an "Idea" that we had. Not only did they turn it down, but they went ahead and did it themselves - LESS then 30 days after we contacted them!

I was told by a lawyer, that we couldn't patent an "Idea" and that we didn't have a case against HD, but it sure sounds like we were not told the truth … or was this lawyer scared of Harley?

In any case, it WILL be a GREAT day in American history, when this kind of Sh**T stops.

Folks … get a job, and not a Steve Job, a real one. If you want to make easy money, hell sell drugs, just get off everyone elses back. God Damn free loaders!

Skip

[lkrupp]

Originally Posted by Peruchito

i am not from the US or familiar with your patent laws, but since reading about the lawsuits to apple for the past year, basically, my understanding is that i can file a patent for all my crazy ideas, and just sit on it until someone does it and then sue them?

You are correct, sir. In America you can sit on your dead ass and make money by suing corporations who will pay you to go away because it's cheaper than going to court. It's the american dream, getting something for nothing.

[age234]

Whoever allowed this patent, and ones like it, deserve to be kicked to the curb.

In school I was always taught you couldn't patent ideas or concepts, only specific ways of implementing them. If they had come up with an actual working system and Apple used it, they have a lawsuit. But this is nonsense.

And that ridiculous "diagram" with the arrows and $$$ signs. It's degrading to real inventors who put years into the technical drawings of actual working devices.

I can throw some clipart and some arrows together too, maybe I should patent something.

[jbh0001]

Originally Posted by freelander51

That is splitting hairs IMHO.

I agree, but it is the patent office that split the hair.

Perhaps this patent was the reason Microsoft has sold empty boxes with only a coupon inside instead of installation disks; distributing the software via RPOS card would have violated this patent--especially since there are so many versions of Windows.

[DeaPeaJay]

Would AppleInsider be interested in launching a "frivolous apple lawsuits" section on the site? Or how about a "Crazy lawsuits made by people looking for a settlement from Apple" section?