AMAZON.COM, the online retailer, has filed a lawsuit against its rival Barnsandnoble.com in a dispute that is likely to test the validity of controversial patents granted to numerous Internet businesses covering business processes.
Amazon alleges that Barnsandnoble.com has infringed a patent covering Amazon's "one-click" technology, which enables repeat buyers of books and other products on its website to re-enter shipping and billing information with a single click of a mouse.
Barnsandnoble.com recently introduced a similar feature on its website, which is Amazon's biggest rival in the online booksales market. Amazon is seeking a court order to force Barnsandnoble.com to halt its use of one-click shopping as well as unspecified damages.
The Amazon lawsuit comes on the heels of a similar dispute between Priceline.com and Microsoft. Priceline has charged that Microsoft's use of a "name-your-price" scheme on its Expedia travel website infringes upon a patented process first used by Priceline to sell airline tickets and hotel reservations.
In both cases, the online retailers have patented technologies that enable business processes.
Numerous such patents have been granted in the US over the past few years. Typically they describe a specific method of implementing a transaction, or a business process, in software. If the validity of the patents is upheld by the courts, "the landscape of e-commerce will be changed", Mr Jeffrey Neuburger, a patents and intellectual property attorney at Brown Raysman Millstein Felder & Steiner, in New York, predicted.
Critics charge that these patents amount to a "land grab" by businesses attempting to erect barriers to competition. Mr Tim Berners-Lee, the inventor of the World Wide Web, maintains that many of these patents merely describe an established business process in software. Others, he says, "combine well-known techniques in apparently arbitrary ways - like patenting going shopping in a yellow car on a Thursday".
Part of the problem is that doing business on the Internet was, in itself, a novel idea just a few years ago.
"The US Patent and Trademark Office, ill-equipped to search for `prior art' in this new field, seems to have allowed through patents by default," says Mr Berners-Lee.
For example Sightsound.com, a small Pittsburgh company, is claiming that music publishers and film distributors must pay royalties because it holds a patent covering the delivery of music and films over the Internet.
Amazon and Priceline are adamant that their software patents are valid.
"We spent thousands of hours to develop our 1-Click process, and the reason we have a patent system in this country is to encourage people to take these kinds of risks and make these kinds of investments for customers," said Mr Jeff Bezos, Amazon chief executive.
