One of the world's largest computer makers and the world's best-known e-tail Web site have been hit with patent infringement litigation.
Dell was sued in late October by DE Technologies, a very small Virginia company which claims the computer maker infringes its system for "facilitating international computer-to-computer commercial transactions." Which is, as one published report put it, a fancified way to say global e-commerce itself.
And Amazon – which once beat rival Barnes & Noble's Web site over the so-called one-click payment system in court – is being sued by Cendant Publishing, which claims the e-tail kings infringe their so-called "370 patent." This patent is said to provide users with recommendations of goods or services to buy based on databases of prior purchasing histories of other customers.
"Amazon's online marketplace uses numerous features which recommend other goods to potential customers based on prior customer purchasing history," says the Cendant suit, also filed in late October. "Amazon's recommendation features, [including] 'Customers who bought this book also bought' infringe one or more claims of the 370 patent."
Both these suits could have big implications for all chambers of the Internet. Dell is believed to be headed toward $12 billion in sales on the Internet, out of its projected $49 billion total projected 2004 sales, and some analysts believe the DE suit, if it succeeds, could turn practically any company selling online around the world into a potential litigation target.
But it would first have to focus on whether DE really was the first company to show a way to process international online sales, when it filed the patent in 1997. And at least one analyst thinks that wasn't exactly a novel idea even then. "That would not have been the least bit novel in 1997," University of Texas at Austin intellectual property law professor Ronald Mann told the New York Times. "There has to be some additional twist."
DE needed five years to get the patent award and has said numerous delays kept it from raising capital needed to bring it to the market. And they've already failed to get licensings with IBM, SAP, and Federal Express.
Cendant itself is not commenting on its move against Amazon but another published report cited a "source familiar with the suit" who said Cendant is only trying to protect its patent. "Amazon has been afforded every opportunity to sign a license agreement with Cendant but they have failed to do so," the source was quoted as saying. The Cendant patent is believed to have been awarded in August.
