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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (81745)	10/23/1999 3:38:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

SEATTLE, WASHINGTON, U.S.A., 1999 OCT 22 (NB) -- By Steven Bonisteel, Newsbytes. A lawsuit filed Thursday by e-commerce heavyweight Amazon.com Inc. [NASDAQ:AMZN] against a competitor is another sign of a coming storm of litigation over intellectual property on the Internet, a former patent attorney and author says. Amazon.com claims in a lawsuit filed in US District Court in Seattle that barnesandnoble.com inc. [NASDAQ:BNBN] is copying some of its patented technology, and is asking the courts to make the competing online bookstore stop. Amazon.com also seeks an unspecified amount of damages. At issue, the lawsuit says, are features of both companies' Websites that allow customers to speed up the shopping processing by letting them "check out" without having to re-enter both their shipping and billing information every time they buy. Kevin Rivette, who advises companies on patent strategies and who has co-authored a soon-to-be released book on patents in the information age, told Newsbytes that online enterprises should expect to see many more such lawsuits, sometimes over what appear to be seemingly straightforward Website "features." Rivette likened Amazon.com's suit to one launched last week by online buying service Priceline.com [NASDAQ:PCLN] against Microsoft Corp. [NADAQ:MSFT]. That lawsuit, filed in Connecticut, claims Microsoft's Expedia.com travel service infringed on a Priceline patent for its hotel price matching feature. "A lot of what seems to be 'slap-the-forehead' easy wasn't when they first thought it up," Rivette said. "What Amazon has tried to patent is a problem that is endemic in the industry, not just their own Website. Rivette said his book, "Rembrandts in the Attic: Unlocking the Hidden Value of Patents," which he wrote with David Kline, calls the tactic the "choke-point approach." "What you look for is a choke-point in the industry that every one of your competitors has to solve. When you actually solve it, that's a bigger deal that one or two features." Rivette said patents are crucial to this process because, in today's e-commerce environment, they are one of the few barriers left that business can erect to slow competitors. "We don't have the typical barriers to entry," he said. "It gets down to, 'What can I protect?' In the new knowledge economy, patents are going to become the lingua franca of technology, they're going to become the new currency." On Amazon.com, the feature in dispute is called 1-Click, a technology the company claims it patented in September 1997. On barnesandnoble.com, the feature is called Express Lane. Amazon.com claims the barnesandnoble.com implementation of the concept amounts to patent infringement and, in a statement today, said it is asking for "an immediate and permanent court-ordered halt to the...copycat feature." "We spent thousands of hours to develop our 1-Click process," said Jeff Bezos, Amazon.com chief executive officer. "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." Gus Carlson, a barnesandnoble.com spokesman, told Newsbytes, "From what we understand, we believe it's completely without merit and we will vigorously defend our position." In a statement released later today, barnesandnoble.com took a swipe at Amazon.com, saying: "The lawsuit brought against us by one of our e-commerce competitors is a desperate attempt to retaliate for our growing market share. "However, we are pleased to note that they spelled our name correctly in a press release announcing the lawsuit. In fact, traffic to our Web site was up substantially today because of the publicity. We thank our competitor for the incremental sales." This isn't the first time the two competitors have tangled in court. Two years ago this month, the two companies settled a lawsuit launched by bricks-and-mortar-oriented Barnes & Noble Inc. [NYSE:BKS] before it spun off its online bookstore as a separate company. At that time, Barnes & Noble objected to Amazon.com's claim advertising that it was the "world's largest bookstore." Barnes & Noble argued that Amazon.com wasn't even a "store" - let alone the world's largest - because it didn't actually store the books it sold. The two companies settled that suit without either side accepting liability or paying damages.