Priceline Founder Jay Walker Files Patent Suits Against More than 100 Companies
Priceline founder Jay Walker’s technology company, Walker Digital, filed fifteen lawsuits against more than 100 companies on April 11. Many of the suits are likely to bring to mind the lawsuits filed by Microsoft’s Paul Allen over methods of content aggregation and recommendation. However, Walker’s suits are less about rights to basic functions of the internet and more concerned with the methods at the core of online gaming, banking, and discount shopping among others. With that being said, Walker is no stranger to the practice of, ahem, aggressive and opportunistic mass-exploitation of patents. His previous adventures in litigation include suits against Microsoft, Facebook, and the interstate Powerball lottery. The press release issued by Walker Digital actually appears to address this elephant in the room, stating that “[a]ll of Walker Digital’s patents were created internally by invention teams at the company … No patents have been purchased from other companies or inventors.”
According to Walker Digital’s CEO Jon Ellenthal, its hand was forced with regard to the suits when companies refused to pay for using technologies including online game scoreboards, bargain websites, and GPS map navigation. “Unfortunately, many of these companies have refused to engage in meaningful negotiations that acknowledge the market value they derive from the use of our property.” In essence, Walker wants his cut of the action. A quick look at two of the lawsuits may help to clarify the type of property to which Ellenthal is referring.
One of the suits targets online game operators including Valve, Zynga, and Activision. The complaint lists allowing “video and computer game enthusiasts to submit their game outcomes to a central online repository so that they can be compared to the results of other players” as an example of the subject matter covered by one of the two patents at issue. Now, the first thing that might strike anyone old enough to have played computer games during the 90′s is that online scoreboards and leaderboards have been around since the infancy of networked gaming. The patents were granted in 1998 and 1999, which is just around the time that major titles such as Starcraft and Command & Conquer launched multiplayer gaming into the mainstream. However, it should be kept in mind that speculation about what might qualify prior art depends entirely on when Walker Digital began working on this technology.
Another suit asserts that discount and bargain websites including Groupon and Livingsocial are infringing four patents, one of which is titled “Systems and Methods Wherein a Buyer Purchases a Product at a First Price and Acquires the Product from a Merchant that Offers the Product for Sale at a Second Price.” Parsing that out, it essentially covers a service that allows someone to buy a product for a different (assumed lower) price than the current retail price of that product and acquire it directly from the retailer. It doesn’t cover physical coupons since a limitation in the patents is the use of a communication network. What might strike you about these patents (aside from the breadth of claims) is how late they were issued. The issue dates range from 2001 to 2010, with the 2010 patent titled “Purchasing, Redemption And Settlement Systems And Methods Wherein A Buyer Takes Possession At A Retailer Of A Product Purchased Using A Communication Network.” Without getting into current business method patent practice, I’m at a loss for how distributing special offers or promotions online is not obvious over the same practice performed through non-internet channels. Is the key step the collection of payment through the promoting website? The distinction seems hazy at best.
The publicity that Walker Digital has received over the lawsuits seems generally negative at this point. While some reporters simply note the breadth of material at issue and number of companies simultaneously sued, others spare no words in calling Walker a patent troll and criticizing his actions. Beyond that however, the lawsuits launched by Walker and Allen over the past few years could be looked at as another indication that the patent field has not adequately tailored its protected subject matter properly in response to digital technology. Business method patents are by themselves a dicey proposition, but the transition to internet and other advanced telecommunications based business models has inflated the problem. This sentiment may not be novel, but it doesn’t feel like a waste of breath to restate it when a patent application filed in 2006 on the electronic distribution of product discounts is judged to satisfy all requirements of novelty and nonobviousness.