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Technology Stocks : OnSale Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Brad Davies who wrote (4059)	4/12/1999 7:26:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 4903

Not true. The persons who are given credit for a patent are usually listed as the "inventors" but that does not mean much in and of itself. The "Assignee" of the patent is "Onsale, Inc., Menlo Park, CA." The assignee holds the rights of the patent which the inventors have signed over. There may be an agreement by which Onsale, Inc. agrees to pay the inventors a part of whatever payments may be received, but not necessarily so. BTW, I talked with Onsale a few minutes ago. They said that they have just started to send out letters to companies who are doing on-line auctions. The letters simply inform the parties that OnSale has the patent and that they may be infringing on it. It doesn't ask for royalties or otherwise spell out what course of action Onsale might pursue. To completely understand the significance of a patent, one needs to get versed in the surrounding "state of the art". Even though OnSale appears to be the first On-line auction company it is still possible that precedent was established in other fields or that inventions were developed and patents filed but never acted upon. Not acting upon an invention is not a crime, (except for any unrealized business) and does not make a patent or prior art invalid. So, to pass quick judgement on this patent's significance would be misguided. Having said that, it does appear on the surface and from my non-expert knowledge of the surrounding "art" (that's a term that patent wonks use for surrounding technology or whatever), that OnSale has a "Basic" or "fundamental" patent in this emerging field. In fact, it looks so fundamental that ANY internet auction company or auction enabling software provider will infringe. Having said that, the difference between having a patent and getting paid for having a patent is often decided by how many attorneys you have on the payroll and how many years you are willing to pursue a protracted fight through the courts. Certainly having a strong patent increases the odds of ultimate success, but it does not necessarily make it an immediate slam dunk that you can take to the bank. In fact it could result in large immediate costs to fight on many fronts with prospective licensees. OnSale (Kaplan) needs to decide how much time he wants to spend on this. This could become the second major area of enterprise for the company and one that takes a lot of time away from other efforts. Jerry needs to weigh the "opportunity costs" of pursuing this rather than more on-line business. It looks to me that the patent(s) are strong enough that it makes sense to pursue them fully. But I haven't talked with Jerry directly about this and I'm sure that they are doing a lot of strategic thinking. What this might do is to help OnSale forge major agreemetns with industry players and potential future players. eBay, Amazon? They may be only secondary considerations to doing something with IBM, SUN, MSFT or NBC.