Apple sued over methods for repeat iTunes, App Store sales

[AppleInsider]

Apple, along with more than a dozen other firms conducting e-commerce, have been hit with a lawsuit from a patent trolling claiming first rights to technology that simplifies the re-billing process for repeat customers making purchases through online stores.

The 28-page formal complaint was filed late last month by little-known Actus, LCC in its home town of Marshall, Texas, the undisputed patent lawsuit capital of the United States. It alleges that 15 companies, including Apple, Best Buy, and Amazon, are infringing on one or more of several similarly structured patents -- No. 7,328,189, No. 7,249,099, No. 7,376,621 and No. 7,177,838 -- each of which are titled "Method and apparatus for conducting electronic commerce transactions using electronic tokens."

Essentially, the filings describe a pay-by-click method of e-commerce by which shoppers can quickly make repeat purchases or rentals with a specific online retailer after having first established a billing account that they populate with credits or funds. Electronic tokens swapped between the servers holding customers' account information and those hosting online stores can serve as tender or be used to verify the shopper has sufficient funds or credits for new transactions.

Like many patent lawsuits, Actus' complaint is broad and sweeping, using vague rhetoric that makes it difficult to discern which specific Apple technologies are at issue.

Apple has instituted 1-Click payments as a feature across its online electronics stores, allowing customers who enable the option to make repeat purchases with a single click, forgoing the need to resupply shipping and payment information, which is already stored on the company's servers.

For the iTunes Store, which also handles App Store sales, Apple offers a feature called iTunes Allowances, which lets customers send a monthly iTunes Store credit to a family member, friend, or colleague in an amount from $10 to $200.

"Think of an iTunes Allowance like a piggy bank. Some lucky kids get a monthly allowance and they trade the entire amount for stuff each month," Apple says in its description of the service. "Other kids might decide to put their allowance in a piggy bank and spend it later. iTunes Allowance works the same way as a piggy bank. Unused allowance credit rolls over from month to month until the recipient spends it."

While charging Apple with infringement, Actus repeats the basis of its patents:

If the user account contains electronic tokens having a value equal to or greater than the total price, the user is permitted to purchase the selected subset of products or services without requiring the user to disclose personal information to the vendor. The total price is subtracted from the user account, while the purchase transaction is not subject to a minimum processing fee.
It concludes with allegations that Apple is therefore directly infringing, and indirectly infringing through its "marketing, distributing, using, selling, or offering to sell the following products and/or services: Apple Store, iTunes, and iPhone Apps Store."

Actus is seeking damages and attorneys' fees with its suit, which also names Amdocs, American Express, Barnes & Noble, Cabela's, CitiGroup, eBay, FirstView, Marketing Technology Concepts, NetSpend, Officemax, U.S. Bancorp and ViVOtech.

[ View this article at AppleInsider.com ]

[MissionGrey]

Marshall, Texas..............Again!!!!

[801]

Those who can, do...
Those who can't, sue....

[chronster]

Shit like this bores the ever loving crap out of me. Its no wonder lawyers get paid so much.

[lilgto64]

I have a brilliant idea that I need to patent.

My idea is that I will use a device such as a computer or hand held electronic device to do something useful.

Hmm - that should pretty much cover it or do I need to be more specific?

Okay, here goes - the device will accept user input and translate that input via hardware and or software interface including hard wired devices such as capacitors and resistors as well as soft coded instructions that will interpret the user input in such a way as to result in the desire output.

How's that?

oh wait - I may have just infringed on my own patent.

[roehlstation]

Bank of America Corp., Blaze Mobile, Inc., Capital One Financial Corporation, Enable Holdings, Inc., Google, Inc., Green Dot, Corp., Javien Digital Payment Solutions, Inc., JP Morgan Chase & Co., MasterCard International, LLC, Meta Financial Group, Inc., M&T Bank Corporation, Obopay, Inc., Sonic Solutions, Visa, Inc., Vivendi Universal S.A., Inc. Wal-Mart Stores, Walt Disney Co, Western Union, WildTangent, Inc. and AgileCo

[JSmith]

Maybe we could get North Korea to do their next nuke test in Marshall. Kim would get a kick out of it, and we'd get something useful too.

[al_bundy]

no more wage slave, i'm moving to texas so i can sue everyone

[parky]

I'm pleased to see that they spotted the patent misuse quickly and got a law suit underway before any of these companies got established!!

[iGod 2.0]

They don't even know what avenue to sue Apple at. Well, seems like another lawsuit gone down the drain...nice try though...

[RoboNerd]

Software should not be patentable. Period.

Copyrighted, sure. Patented, no.

[Hattig]

Originally Posted by 801

Those who can, do...
Those who can't, sue....

Damn right. These business method patents just damage everyone. Patents should be non-obvious to someone skilled in the art, yet any software engineer, even 10/15 years ago, if told to implement a means to allow these systems would implement them in a similar manner, i.e., it's trivial and shouldn't be patentable.

The earliest of those patents was filed some time ago though
Filed: April 21, 2000

But there must be prior art to this date of an online system that did what this patent says.

[charlituna]

shall we start a pool on how fast this is tossed on the basis of patent squatting and/or similar idea but not method of application (like with copyright you can't patent an idea just how you accomplish it).

I'm voting less than a week.

[iCarbon]

AcKKKK!!!

AAPL is down $0.18 on this news!!!!!

We're all DOOOOMMMMMEEEEDDDD

seriously, how does Marshall, TX not get nuked by other states for wasting everybodies resources, shouldn't they get cut-off eventually? Obviously they've figuredout some way to capitalize off of accepting all looney lawsuits that come up (is it a tourist draw?)

[lilgto64]

Originally Posted by parky

I'm pleased to see that they spotted the patent misuse quickly and got a law suit underway before any of these companies got established!!

There should be some statute of limitations or some provision that stipulates that the internal process must be substantially the same for there to be any claim at all.

To get a patent you should have to detail a working solution not just a high level concept. Anyone can paint a broad stroke and hint around at what something might be. It is a whole nother thing altogether to work through building testing and implementing a solution that works. Furthermore just because two companies arrive at solutions which appear to be similar in how they function - unless there is evidence that one company had access to the design or internals of the other where is the infringement?

Now if I build a product and you reverse engineer it that is different.

Even items such as Calculus and the telephone where each developed independently by isolated parties at about the same time.

A patent should be on a tangible thing - not a concept. I can put an iPhone in your hand and print out the lines of code for the OS - so where is the tangible property of the plaintiff to enter as evidence - not just a scribble on the back of a napkin with a few key words - but a functional (even if not fully operational or flawed) product whose market value had been reduced by your competition's product?

I would imagine there is prior art of some kind in this case - and isn't there some provision in patent law that you cannot patent something that is blatantly obvious? (or something along those lines)

[lilgto64]

Originally Posted by iCarbon

AcKKKK!!!

AAPL is down $0.18 on this news!!!!!

We're all DOOOOMMMMMEEEEDDDD

seriously, how does Marshall, TX not get nuked by other states for wasting everybodies resources, shouldn't they get cut-off eventually? Obviously they've figuredout some way to capitalize off of accepting all looney lawsuits that come up (is it a tourist draw?)

They likely have some kind of filing fees or something that keeps the process going.

Also - you only have to have one small victory for everyone else to line up for a chance to pull the handle and spin the wheels of "justice"

[crees!]

Apple has instituted 1-Click payments as a feature across its online electronics stores, allowing customers who enable the option to make repeat purchases with a single click, forgoing the need to resupply shipping and payment information, which is already stored on the company's servers.

Didn't Apple have to license the 1-Click payments from Amazon some time ago?

[Virgil-TB2]

Originally Posted by crees!

Didn't Apple have to license the 1-Click payments from Amazon some time ago?

The patent as described above doesn't even have anything to do with 1-click so it's not clear at all what they are arguing from this summary.

There is probably a lot more to it, but if this correctly summarises the claim:

Originally Posted by AppleInsider

... If the user account contains electronic tokens having a value equal to or greater than the total price, the user is permitted to purchase the selected subset of products or services without requiring the user to disclose personal information to the vendor. The total price is subtracted from the user account, while the purchase transaction is not subject to a minimum processing fee.

Then IMO the patent should never have been issued as it doesn't pass the "non-obvious" test. This is just a description of how "accounts" work which would apply to all "accounts" even those previous to the invention of the computer.

It seems like they are trying to patent the idea of maintaining a balance in your account, online or otherwise. That's both too broad and too obvious for a patent.

[soundsgoodtome]

Originally Posted by crees!

Didn't Apple have to license the 1-Click payments from Amazon some time ago?

Yes. (The 1-Click payment system, not the actual payments.) :-)

[jpklock]

Originally Posted by lilgto64

There should be some statute of limitations or some provision that stipulates that the internal process must be substantially the same for there to be any claim at all.

US patents are valid for a maximum of 20 years from the date of approval (some patents can only be maintained for 14 years).

To get a patent you should have to detail a working solution not just a high level concept.

Successful patent applications do require the applicant to describe how to make and use the invention or discovery, including at least one working example.

Furthermore just because two companies arrive at solutions which appear to be similar in how they function - unless there is evidence that one company had access to the design or internals of the other where is the infringement?

Now if I build a product and you reverse engineer it that is different.

Patents specifically protect the invention itself, and do not care at all the means by which infringers came to implement a version of that invention. That is to say, if two entities simultaneously make the same discovery or invent the same device, the patent will go to the one who files first for the patent. The other one is screwed. End of discussion.

Reverse engineering does NOT allow you infringe on a patent (in part because the patent DOES require the applicant to provide detailed instructions and a detailed description of a working model-- so it'd be impossible to prove that you hadn't been "inspired" by that publicly-available working description in your own, ahem, "engineering" work...)

A patent should be on a tangible thing - not a concept.

Well, really, it's on both, in a way. Patents allow you to protect your invention or discovery (which is basically a concept), but you have to demonstrate not only THAT it works, but HOW it works, in order to gain that protection.

The idea behind this is to make patents worth having. As a ridiculous example: if I patent, say, "chairs", and in my description I have both 3-legged and 4-legged versions, you can't eliminate my patent simply by building your own 5-legged chairs...

I would imagine there is prior art of some kind in this case - and isn't there some provision in patent law that you cannot patent something that is blatantly obvious? (or something along those lines)

Indeed-- you cannot patent something if it's "known by the public", nor if it's been described in a published work more than one year before you patent it, nor if it's immediately obvious to a technically-skilled person in the appropriate field.


So we see, patent law as written actually has most of the features you want it to. The problems here are that (a) patent clerks, often overwhelmed and out of their technological league, sometimes give patents to applicants that don't really have a decent claim and (b) some jurisdictions of court (I'm looking at you, Marshall, TX!) are known to have judges who tend to favor patent-holders, even if the patent should not have been given-- in this case, most jurisdictions would probably void the patent, on grounds that it's obvious to technically-skilled people. I'm guessing that the judges in Marshall take a harder stand on what's "obvious"-- using the old argument: "If it was so obviously, why hadn't you done it already?"


For the record, I agree with Virgil, above, that this particular set of patents (based on a very limited exposure to them, from this article) are probably crap, probably should never have been given, and that there's probably no legitimate basis for a lawsuit here. Shame on Actus, and on Marshall, TX.

[8CoreWhore]

Some of these jarks need to get their azzez kicked in a dark alley.

[Rot'nApple]

Time to change lawsuits like this to read the following:

Sure you can sue, but if your claim is found without merit, you pay for yourself and the one you sued, associated costs.

If this company thinks it has an air tight case then go ahead and sue.

If this company is trolling for dollars by filing frivolous lawsuits and they had to worry about paying out of pocket for the other guys lawyers, court costs, etc., it will make them think twice before filing court papers!

And we would have fewer "lawsuits filed against Apple" stories to read about on AI -

[FormerLurker]

Originally Posted by crees!

Didn't Apple have to license the 1-Click payments from Amazon some time ago?

Yeah.

I would expect Amazon to be leading the fight against these guys. And, by virtue of licensing 1-Click, Apple has a degree of separation that the other defendants don't have.

[Cubert]

Hang 'em high! That's the only way to stop these shyster lawyers.

[heavydevelopment]

I think that software and some business method should be patentable, but the patents should be for a much shorter period of time. I believe most patent law is based back to the industrial revolution and the manufacture of physical goods. It is understandable in this situation that you would want a company to be able to recoup the costs of investment to ramp up production of goods. With most software while there is R&D, you don't have the same sort of equipment costs to distribute another copy of that software. I also feel that any company holding a patent must have a record of either using that patent or at least an honest effort of to sell licensing of the patent. Patent law should not be able to be used to become a patent troll. Why has it taken the Supreme Court this long to hear a case on this?

[chromos]

Hopefully, stupid lawsuits like this will become history:

From today's NYT
Justices to Weigh Issue of Patenting Business Methods

I guess that even Amazon's One-Click patent will come under scrutiny then.

[McDave]

I suppose with Texas' inability to make money they're going to look at how they can take it from everyone else!

McD

[psxndc]

Originally Posted by jpklock

US patents are valid for a maximum of 20 years from the date of approval (some patents can only be maintained for 14 years).

Wrong. 20 years from earliest US filing date (which does not include provisionals)

Originally Posted by jpklock

Successful patent applications do require the applicant to describe how to make and use the invention or discovery, including at least one working example.

Wrong. The requirement is that they enable one of skill in the art to reduce the invention to practice without undue experimentation. While it is useful to describe a preferred embodiment, there is no requirement to do so. Unless you are talking about the best mode requirement, and that doesn't have to be a "working example," just instructive as to how the inventor understands the best way of carrying out the invention.

Originally Posted by jpklock

Patents specifically protect the invention itself, and do not care at all the means by which infringers came to implement a version of that invention. That is to say, if two entities simultaneously make the same discovery or invent the same device, the patent will go to the one who files first for the patent. The other one is screwed. End of discussion

Wrong. If two people come up with the same idea around the same time, it will go to whoever can prove they invented first. The US is one of the only countries that does not implement a first-to-file rule (though it is being contemplated).

Originally Posted by jpklock

Reverse engineering does NOT allow you infringe on a patent (in part because the patent DOES require the applicant to provide detailed instructions and a detailed description of a working model-- so it'd be impossible to prove that you hadn't been "inspired" by that publicly-available working description in your own, ahem, "engineering" work...)

Answer, correct; reasoning flawed. Intent or knowledge of the patent is not only irrelevant, it's not even an element of infringement (though both are considered when determining willfulness). The point is that patent infringement is a strict liability tort. If you come onto my lawn (or more so in my house), it doesn't matter why you are there; you are still on my lawn. Same principle.

Originally Posted by jpklock

Indeed-- you cannot patent something if it's "known by the public", nor if it's been described in a published work more than one year before you patent it, nor if it's immediately obvious to a technically-skilled person in the appropriate field.

This is correct. Sorry to be harsh on you - you're trying to help. But I want to prevent others from taking your post as gospel and spreading information that isn't exactly accurate. It's bad enough that people think you have to make something to have a patent or that there is a patent squatting defense (and no, I am not referring to laches).

[Switchers (Chief Editor)]

And there we go again. We've all seen this before, even this year. Apple settles in most cases anyway so that will most likely happen here too. Next.

[SpamSandwich]

Originally Posted by Virgil-TB2

The patent as described above doesn't even have anything to do with 1-click so it's not clear at all what they are arguing from this summary.

There is probably a lot more to it, but if this correctly summarises the claim:


Then IMO the patent should never have been issued as it doesn't pass the "non-obvious" test. This is just a description of how "accounts" work which would apply to all "accounts" even those previous to the invention of the computer.

It seems like they are trying to patent the idea of maintaining a balance in your account, online or otherwise. That's both too broad and too obvious for a patent.

And yet, somehow this was granted a patent. I'm curious to see how this one shakes out.

[city]

Can one do a reverse Class Action lawsuit where there are thousands of defendants instead of thousands of plaintiffs? In this case there could sue the class "businesses that sell on the internet".

[jragosta]

Originally Posted by city

Can one do a reverse Class Action lawsuit where there are thousands of defendants instead of thousands of plaintiffs? In this case there could sue the class "businesses that sell on the internet".

Better yet, how about a class action lawsuit against Marshall, TX by everyone who has been harmed by their inane money-grubbing patent trolls?

[chronster]

Your disgrace is my case!

[a_greer]

Originally Posted by AppleInsider

Apple, along with more than a dozen other firms conducting e-commerce, have been hit with a lawsuit from a patent trolling claiming first rights to technology that simplifies the re-billing process for repeat customers making purchases through online stores.

So my neightborhood barkeep could be prior art, you give him a card, he scans it and opens a tab, at the end of the evenings beer and nachos session, you sign the tab and leave...same as the music store just in a real life situation.

hte question is does adding "on a computer" make it novel?

[ktappe]

One way to stop all this patent trolling might be for Apple (et al) to heavily back candidates in Marshall, TX that will change the laws there. Sure, it'd be "buying the office" but perhaps the greater good justifies that in this case. Go down there and help reform candidates outspend their opponents 100 to 1. "I hate lawyers, and so should you" can be their platform....

[Reek!]

Originally Posted by ktappe

One way to stop all this patent trolling might be for Apple (et al) to heavily back candidates in Marshall, TX that will change the laws there. Sure, it'd be "buying the office" but perhaps the greater good justifies that in this case. Go down there and help reform candidates outspend their opponents 100 to 1. "I hate lawyers, and so should you" can be their platform....

I don't think that would work - the patent laws are US, not state laws, so this would have to be filed in Federal court. The likely problem is with the jury, not the judge, but even the judge cannot be removed except by impeachment (or appointment elsewhere)

[city]

Originally Posted by ktappe

One way to stop all this patent trolling might be for Apple (et al) to heavily back candidates in Marshall, TX that will change the laws there. Sure, it'd be "buying the office" but perhaps the greater good justifies that in this case. Go down there and help reform candidates outspend their opponents 100 to 1. "I hate lawyers, and so should you" can be their platform....

The strong political machine in some towns wouldn't let that happen and you can't directly bribe voters anymore without risking jail time.

[Damn_Its_Hot]

Originally Posted by jpklock

Shame on Actus, and on Marshall, TX.

What part of the Federal Court is it that handles patent adjudication and how are these judges put in place (i.e., appointment, term, etc.)?

It would seem that complaints might help do something about the Mashall, TX court.

I know it took a while but we have at least gotten rid of Kent (yes, a Federali from TX) though the bastard is resigning next year (he'll have been in prison for a yr) and they say it will take the House that long to impeach him. I am hoping we don't have to go through this kind of contortions to get some rethinking done in Marshall. The judicial system with its appointments really protects each other and are very slow to correct problems. Sorry, I digress.

Yes, I am in Texas, and I am tired of having to defend this state because of this fed court in Marshall. I for one am ready to have something done!

jOhn

[Sensi]

The US software patent system is the laughing stock of the whole world...