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up vote 5 down vote favorite

I know you all aren't patent lawyers but maybe I am missing something obvious?

How do these sites get away with breaking Elance's patent U.S. Patent 7,069,242 [guru, scriptlance, vworker, peopleperhour]???

I know the patent is incredibly silly, it basically patents how you find a web designer in the real world into the web. Call them, tell them your project, and get their estimate, and then call others, and choose. It's almost like patenting how to tie your shoe: put on foot, lace up, tie laces.

Since this patent is so broad in process; does it even hold any water? Is that why these other sites are not scared to do it?

Thanks, James

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5 Answers

up vote 4 down vote

Patents are worth exactly as much as the patent-holder's ability and willingness to sue.

My father holds several patents on retaining ring pliers. One of his competitors infringed, so he went lawyer-shopping. Since patent lawyers don't work on contingency, he amassed a multiple-$100K war chest, then brought the hammer down. The infringer was required to disgorge all profits from the infringement and stop manufacturing the competing pliers.

When Autodesk was about to do its IPO in the 80s, they were sued by the owner of an infamous submarine patent on using XOR to create cursors on a raster screen. Although there was tons of prior art, so the patent could easily have been defeated, fighting it would have delayed the IPO. So it was cheaper to pay off the scoundrel.

My guess is elance either doesn't have the money to sue, doesn't want to bother, or is afraid that if anybody fought back, the patent would be declared invalid.

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up vote 3 down vote

You need to consider a number of things when looking at this scenario.

  1. The strategy of the patent owner

    • When do we start with letters to the infringer.
    • What publicity do they want, what will it do to their image.
    • What is the goal (licencing, patent damages, stopping competitors, defensive patenting, patent selling, inciting fear in buying from competitors)
    • Cash flow management strategy, because litigation isn't cheap.
    • The fundamental business of the company (even if it is just a patent troll).
    • The particular venue to bring patent claims (somewhere in Texas I hear).

  2. The attributes of the potential Target

    • The size of the target (last through litigation, can pay the penalties)
    • The likely response to threats by management.
    • The ability to threaten the target.
    • Can they avoid the patent?

  3. The Patent itself

    • Is it overly broad?
    • Do any claims pass the test of obviousness?
    • Do any claims pass the test of prior art?
    • Is it more useful as a threat or actual litigation?

Examples:

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up vote 2 down vote

I recommend that you google your question. For instance, I found this discussion: http://answers.google.com/answers/threadview/id/768986.html

When it comes to patents, what matters are the claims. You are really in trouble only if you implement exactly what the claims say.

For instance, in that particular patent, the first claim says:

  1. A computer implemented method, comprising: accepting a posting on a website of a project that a buyer wants completed; providing a database containing all registered sellers; receiving a bid on the project from any seller, where all registered sellers are qualified to bid on postings in all categories; allowing the buyer to accept the received bid from the seller; and allowing the buyer and the seller to work on the project in a collaborative workspace accessible by only the buyer and the seller, where the seller develops and delivers the project in the collaborative workspace and the buyer can track the project in the collaborative workspace before it is complete.

Are your users "qualified to bid on postings in all categories", or do you restrict which users can bid based on their skills? If you do, you don't infringe the patent and you are home free (*)

(*) obviously, patent law is so much more messy than what I describe here, anyone can pretty much anyone else for anything, so if you are serious and betting real money on this, talk to a lawyer

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Hey Alain, Thank you for your answer! Yeah, I did do some research and read that same article. Wasn't sure if just doing one thing 'differently' would mean it is within realms of the 'design around' method in which to get around silly patents like this. For instance, oDesk, I think is designed around it. I say this because oDesk does: 1) Post your project 2) "Interview" and "Hire" someone 3) Get the work done, pay them. Whereas, Elance does: 1) Post your project 2) "Approve one bid" and hire 3) Get work done and pay them. – James Jun 7 '11 at 23:25
up vote 2 down vote

They have US patent and probably patents registered in some other countries? You can always register you company (site) in some other jurisdiction not covered by this patent.

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up vote 0 down vote

Basically patents aren't worth much these days unless:

Your prepared to fight and have deep enough pockets to do so.

Patents are so specific that if I know the patent I can still solve the same problem in a 10% different way and you can't touch me ... In software that can be write it in ruby rather than .net ...

You need to be worldwide or not at all, just host the server and company in a different location.

And lastly the patent office has no clue about hi-tech ... See patent on the hyperlink, facebooks recent patent on a news feed despite 10 years prior art from other parties ... There are lots of examples where a patent shouldn't have been granted ... So people have started ignoring them because it would cost more to prove it or winning the market is worth more than the cost of the law suit (Microsoft and apple over the last 20 years)

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(1) "In software that can be write it in ruby rather than .net" is flat wrong. Amazon's 1-click patent doesn't assume any programming language in its implementation. (2) "You need to be worldwide or not at all", is not true for offensive patents. If your patent can prevent MS shipping MS Office in the US alone, they will pay attention. (3) "And lastly the patent office has no clue about hi-tech". Again, this is flatly wrong and in any case, patentability has nothing to do with hi-tech and everything to do with prior-art. There are many valid low tech software patents. – user48956 Jun 28 '11 at 15:59
1) it does depend greatly on what you are patenting. It is often an algroithm that is patentable but the basis of 10% difference or a variation on the solution that can bring it out of patent. If you show me how to solve a problem thorugh software I can, in most cases, show you a better way that you could argue is more than a 10% difference ... but if you keep how we do it private then it is much harder and takes longer to get to the same point. 2) this is a good point, I haven't used patents like this before and in this instance I can see it would be useful. – Robin Vessey Jun 29 '11 at 3:02
3) this is from a range of patents that are patenting common knowledge from professionals within the industry. A patent on the hyperlink, the newsfeed on facebook ... that said Ric Richardson win against MS which I think your referencing is actually good but it nearly killed him to win it (though the payout was very good for him once he had it). So I suppose my comments are a little biased from my own bad expereince of wasting a lot of time and money that could have been better spent elsewhere. They do still have a place but there needs to be more safeguards inplace around the awarding of them – Robin Vessey Jun 29 '11 at 3:09

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