Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Booking Holdings (formerly Priceline) -- Ignore unavailable to you. Want to Upgrade?

To: mfgrep who wrote (1022)	5/2/1999 11:50:00 AM
From: Nandu	Read Replies (1) \| Respond to of 2743

Sometime last week, I posted on this thread that PCLN will be marginable at ETrade from next week. My post was based simply on the fact that IPOs become marginable after 30 days. The 30 days was up on Thursday, but I still see my PCLN marked as being in my cash account. What is more, the "special margin requirements" section of ETrade lists PCLN as needing 100% margin. So, maybe I was wrong.

To: mfgrep who wrote (1022)	5/3/1999 6:53:00 PM
From: $Mogul	Read Replies (1) \| Respond to of 2743

FORBES ARTICLE When Jay Walker comes up with a novel way of doing business, he wants a monopoly on it. Will the Web sit still for this? Barbed wire on the Internet By Josh McHugh You can patent a chip, and you can patent a chemical process. Can you patent a business model? Maybe. Most of the hot Web firms owe their billion-dollar valuations to the early-bird phenomenon. Amazon.com doesn't have any legal monopoly on the right to sell books on line; it simply has good merchandising skills and an immensely valuable trademark. Trademarks aren't good enough for Jay Walker, the inventive mind behind Priceline.com. He wants a patent on his clever Internet ideas. He has one, No. 5,794,207, on the system for letting travelers post bids on tickets and on hotel rooms they want. This patent covers more than some obscure sequence of computing algorithms. It's pretty broad. Arguably, it gives Priceline a 20-year monopoly on the right to have any Web site that lets buyers name prices. But Walker will not retain this legal monopoly without a fight. Sooner or later some other transactional Web site will tread too close and there will be litigation. Walker already faces two challenges from people who do not contest the right of the U.S. Patent & Trademark Office to award such a sweeping monopoly. They simply argue that they are entitled to it. One challenger is an engineer who says he filed for the same patent claims first; the other, an entrepreneur who says that he pitched the Priceline business idea to Walker a decade ago, and that Walker stole it. And now the two interlopers, who found one another by reading the registration statement for Priceline, are talking about pooling their efforts. The engineer is Thomas Woolston, who is also a Washington, D.C. patent lawyer and has filed a challenge with the patent office to have Walker's claim invalidated. Woolston first applied for protection in April 1995, 17 months ahead of Walker. The Priceline patent came through first, on Aug. 11, 1998; Woolston's patent was granted Dec. 1. The two are similar in some basic ways. Woolston's patent describes a commerce system that uses a computer-based network to let purchasers determine prices for goods; Walker's patent covers a "method and apparatus for effectuating bilateral buyer-driven commerce." Two foes have challenged the Priceline patent. Others may have to do so. Perhaps more troubling is a lawsuit filed in January by the entrepreneur William Perell, founder of a dormant firm known as Marketel International. The suit asserts that Marketel, seeking funding from Walker, showed him its business plan in 1988 and that he signed a nondisclosure pact that was to last ten years. Walker passed on the deal, but, in 1996, before the ten years were up, mimicked the Marketel plan and applied for the Priceline patent, the suit says. Walker refuses to say whether he ever met with Marketel. But a Priceline spokesman says that Marketel's case is groundless. He notes that Marketel's own lawyers are seeking court permission to withdraw, citing Marketel's refusal to produce crucial information. As for the Woolston patent, Walker argues it has nothing to do with his patent. The Priceline patent describes, in some detail, a network with computer "nodes" and intricate security and payment protocols. (The security comes courtesy of the cryptographer Bruce Schneier, who is a coholder of the Priceline patent.) It also claims exclusive rights to the "method"—letting customers cite a price. The question is whether a "method" patent as broad as this will hold up. What's to stop someone from patenting the idea of franchising a restaurant chain? Or offering cents-off coupons? Or paying interest on credit balances? For most of this century the courts were lukewarm to patents on business methods. In 1908 a federal appeals court ruled against a patent for a bookkeeping system because it covered standard bookkeeping practice and therefore lacked innovation. But the tide changed just last summer. In 1993 Signature Financial Group got a patent for its "hub and spoke" investment structure, featuring a central asset pool linked by software to a series of mutual funds. In 1996 State Street Bank, after licensing negotiations with Signature broke down, persuaded a federal court in Massachusetts to invalidate the patent on the ground that Signature's invention was merely a "business method." But the U.S. Court of Appeals in Washington reversed the decision in July 1998. It ruled that because Signature's process produced a useful result—an updated mutual fund share price—it merited patent protection. "The State Street decision removed any doubt that a business method, as long as it is novel and useful, can be patented," says Stephen Gass, a patent lawyer in Portland, Ore. You also can patent a device—but not the mere idea for it. George Selden, the self-proclaimed inventor of the automobile, had a patent that all but covered anything with wheels and a motor. Henry Ford persuaded the courts to invalidate it. Merrill Lynch patented the software behind its Cash Management Account, introduced in 1977, but didn't have the exclusive right to give brokerage clients a fair shake, novel as that idea was at the time. Charles Schwab knocked it off. The Walker patents may provide some compelling court battles. Until now speed and adaptability have ruled cyberspace. But legal jousting could gain sway if Walker wannabes try to turn patents into the barbed wire of the Internet. \| back to top \| Read more: By Josh McHugh On The Cover From May 17, 1999 Issue May 17, 1999 Table of Contents: ON THE COVER: The Forbes Lunch An Edison for a new age? Dot.com power The Priceline is right EXECUTIVE COMPENSATION: A king's pay In the spotlight Damn Yankees Option pitfalls Payoff time Corporate Resumes TECHNOLOGY: Digital Tools Ports to nowhere DEPARTMENTS: Side Lines On My Mind Feminism, power and hapiness Fact And Comment COLUMNISTS: Observations Social dogmas and pseudoscience INVESTMENT COLUMNISTS: Portfolio Strategy Not your average Joe MONEY AND INVESTMENTS: Streetwalker