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Patent Ruling in eBay Case Has Bearing on Nonprofit Tech Cos.

BY Kate Kaye | Sunday, March 20 2005

A few weeks ago we published a piece on how business method patents have prompted debate within the nonprofit-serving software tech industry. (Caution: I wrote it.) A recent ruling in an ongoing case filed against eBay by MercExchange, a company that develops technologies for various business applications, including Internet auctions, apparently "sets the stage for a permanent injunction against eBay," according to patent attorney and blogger extraordinaire, Dennis Crouch.

This stuff is pretty complex for my pea brain to handle -- especially on a Sunday following an evening of whiskey drinking and heavy metal debauchery -- so I won't delve into the details which you can read on AuctionBytes.com and elsewhere. Although this may seem to have no bearing on nonprofits or political campaigns, it certainly does on the technology firms that serve them, some of which have taken a stand against business method patents and others which have filed for such patents.

The fact that MercExchange, a stakeholder in online auction underdog uBid, has won a battle in its war on Web auction goliath eBay, might provide a little perspective on the business method patent debate. Essentially, from what I can tell, MercExchange wants to spur competition in a space that's dominated by one company. At least in part, it appears that business method patents are providing some incentive for the company to pursue this. According to the AuctionBytes.com story, uBid has a "5 percent market share in the industry." I may be totally wrong, but this doesn't look to me like the big bad predatory patent wolf hunting for licensing fees from its weaker or slower prey. It looks like a company that wants some protection in the form of patents to give it the incentive to put time and money into R&D to create something better than the the standard fare.

In the AuctionBytes.com story, Tom Woolston, president of MercExchange and the inventor of the four business method patents held by the company listed on the US Patent and Trademark Office site, declared "It's a great day for a small company and a great day for uBid.com." He added, "I'm a director of a subsidiary at uBid and we're focused on building a better community."

Sure, patents on processes as opposed to tangible contraptions are controversial, but the fact is that the more our world becomes digitized, the more inventions will be taking the form of ones and zeros.

Just a little food for thought.

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