Store Payment Info In Your Online Store? Watch Out For Patent Infringement Lawsuits

from the pay-now dept

Wed, Jun 3rd 2009 7:46am — Mike Masnick

Bill Squier alerts us to the news that a bunch of companies have been sued for daring to store consumer payment information and allow either stored value payments or one-click payments on their site. The article linked here focuses on Apple as a defendant, and notes 14 other companies were sued as well, but in researching this, I found that Joe Mullin actually wrote about another batch of companies (20 of them) that were sued back in April. The earlier lawsuit included Google, Wal-Mart, Bank of America, Capital One, JP Morgan Chase, Mastercard, Visa, Vivendi, Disney and Western Union among others. The more recent lawsuit has (as mentioned) Apple, Best Buy, Amazon, American Express, Barnes & Noble, Citigroup and eBay among others. So... basically any online e-commerce site, credit card company or big bank.

As for the patents in question, they're all a variation on a "method and apparatus for conducting electronic commerce transactions using electronic tokens." The specific patents are 7,376,621, 7,249,099, 7,328,189 and 7,177,838. Reading through the claims, this seems like an incredibly typical online system for storing payment info and seeing if the person can actually pay. Since the patent system defenders among our readers get quite upset whenever I say something seems "obvious" to me, let's flip this around. Can anyone explain how these concepts were not obvious at the time of filing?

Not surprisingly, the cases have been filed in Marshall, Texas... and as Joe Mullin figured out, the guy who is running "Actus" is a lawyer known for representing some infamous patent hoarding companies. He also discovered that the lawyer representing Actus in these lawsuits appears to share an office (or at least the same address) with the son (who is also a patent attorney) of the judge handling the case. At some point, do people start questioning whether or not there's a conflict of interest there?

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Filed Under: patents, payment
Companies: actus, amazon, american express, apple, bank of america, barnes & noble, best buy, capital one, citigroup, disney, ebay, google, jp morgan, mastercard, visa, vivendi, wal-mart, western union

35 Comments

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Anonymous Coward, 3 Jun 2009 @ 7:52am

patent jammers like this are about the same as TPB - it's obvious what they are doing is wrong, but it is hard to prove from within the system.
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- :Lobo Santo (profile), 3 Jun 2009 @ 8:40am
  
  Re:
  Amazing!
  You must be a skilled, well paid shill to put together such an eloquent bit of untruth such as that.
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  - Anonymous Coward, 3 Jun 2009 @ 9:01am
    
    Re: Re:
    It's not a shill, geez, grow up.
    
    It's just making the point - what is annoying about how these people are abusing patent law is in the same manner that TPB abuses copyright law, standing right on the very edge of the greyest of lines, taunting the other side.
    
    It's the same thing - open your eyes and you might understand.
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    - Anonymous Coward, 3 Jun 2009 @ 4:17pm
      
      Re: Re: Re:
      You grow up. Yeah, the pirate bay maybe bad for the RIAA and MPAA but it isn't necessarily bad for artists (it probably causes them more good than harm). The RIAA and MPAA only pretend to represent artists; heck, right here on Techdirt there was a thread there they pretended to represent a particular group and when the group saw it it disagreed. There are more examples of this. The RIAA and MPAA just fabricate damage that doesn't exist but the only one causing the most damage is the RIAA and MPAA.
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      - Anonymous Coward, 3 Jun 2009 @ 4:35pm
        
        Re: Re: Re: Re:
        sp/there/where
        
        here is the link to what I was referring to.
        
        http://www.techdirt.com/articles/20090601/0644235082.shtml
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- Anonymous Coward, 3 Jun 2009 @ 10:01am
  
  Re:
  it's wrong for me to get my latest ubuntu distro from TPB? What about my GIMP, Blender, Inkscape, Code::Blocks, Ogre 3d, and Open Office? I am doing wrong and evil by using bittorent to get these programs easily and enabling others to get them faster too? If so how do I run my indie development team?
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Anonymous Coward, 3 Jun 2009 @ 8:01am

So this is The famed "Texas Justice"?
He... discovered that the lawyer representing Actus... appears to share... the same address with the son... of the judge handling the case.

Suddenly, I don't see anything wrong with Texas becoming it's own country and seceding from the Union.
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- mike42 (profile), 3 Jun 2009 @ 9:57am
  
  Re: So this is The famed "Texas Justice"?
  Sounds great, but he's a federal judge, not state.
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  - Tgeigs (profile), 3 Jun 2009 @ 10:21am
    
    Re: Re: So this is The famed "Texas Justice"?
    "Sounds great, but he's a federal judge, not state."
    
    In which case we should all secede from ourselves, just to make we an example...
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Rob R. (profile), 3 Jun 2009 @ 8:03am

Wow, one hell of a good scam they've discovered. I wonder how long they can ride this train before the inevitable crash and subsequent train wreck of their lives.
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Anonymous Coward, 3 Jun 2009 @ 8:15am

"He also discovered that the lawyer representing Actus in these lawsuits appears to share an office (or at least the same address)"

This is a funny comment, because in many cities, many lawyers will have offices in the same building, often facing or near the courthouse. So would that be the exact same office address, or just in the same building?
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- Mike Masnick (profile), 3 Jun 2009 @ 8:27am
  
  Re:
  This is a funny comment, because in many cities, many lawyers will have offices in the same building, often facing or near the courthouse.
  
  Marshall Texas isn't exactly a "city."
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  - Anonymous Coward, 3 Jun 2009 @ 9:04am
    
    Re: Re:
    24,000+ residents within the marshall, plus surrounding areas. Not a huge place, but likely more than a 1 stop light town.
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    - Pablo, 3 Jun 2009 @ 9:24am
      
      Re: Re: Re:
      Well as compared to other "Cities" in the same area as Marshall, it is actually fairly large.
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      - aguywhoneedstenbucks, 3 Jun 2009 @ 10:58am
        
        Re: Re: Re: Re:
        Longview is around 75,000 and Tyler is between 105,000 and 110,000. That's the only two things that can be called "cities" anywhere near Marshall.
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  - aguywhoneedstenbucks, 3 Jun 2009 @ 10:36am
    
    Re: Re:
    Considering I grew up less than 40 miles from Marshall I have to say Mike is 100% correct. I have a few clients in Marshall (computer consulting) and it's about as small as you can get and still have a court. It's dirty and trashy and even the inbred hillbillies that live within 100 miles make fun of the place for being so nasty. The only reason there is ANY industry in the area at all is because the cost of living and the cost of doing business in the East Texas area is much lower than it is many other places in the US.
    
    Disclaimer: I'm in Tyler, TX right now.
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    - Anonymous Coward, 3 Jun 2009 @ 11:10am
      
      Re: Re: Re:
      Disclaimer: I'm in Tyler, TX right now.
      
      Well, that just completely discredits your statement, doesn't it? ;)
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      - aguywhoneedstenbucks, 3 Jun 2009 @ 11:35am
        
        Re: Re: Re: Re:
        It should. People from Tyler are notoriously untrustworthy.
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    - Anonymous Coward, 3 Jun 2009 @ 11:50am
      
      Re: Re: Re:
      ..and yet, in the middle of the podunk town, there are about 30 or 40 law firms / lawyers and a federal court.
      
      The point being, it isn't clear that lawyer 1 and lawyer 2 share the same offices, only that they have the same street address.
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- Sean T Henry (profile), 3 Jun 2009 @ 8:50am
  
  Re:
  They would have the same physical address but should have a different "Suite" number, unless they share the same office or have one mail box and someone who sorts all the mail.
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Steve R. (profile), 3 Jun 2009 @ 8:33am

Is There Room on the Supreme Court for this type of Abuse?
TechDirt reported June 1st. "Supreme Court To Review Whether Business Models And Software Are Patentable"

I have no idea concerning the scope of what the Supreme Court will be ruling on, but obvious business practices should not be entitled to patent/copyright protection.

We can only hope that those advocating the elimination of patent protection will file a "friend of the court" petition full of these absurdities.
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Trollificus, 3 Jun 2009 @ 9:29am

This kind of...
...jurisprudential cottage industry is why I'm always careful to refer to our "legal system" rather than our "justice system". Other than the appeal of the anecdotes deriving from the cases, is this morally much different than those Pennsylvania judges building and owning a juvenile offender warehouse and then filling it up from the bench??

I am also reminded of two things:
1) In an ecosystem, parasites invariably perform a necessary function.
2) Not all analogies are valid.
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Trollificus, 3 Jun 2009 @ 9:30am

This kind of...
...jurisprudential cottage industry is why I'm always careful to refer to our "legal system" rather than our "justice system". Other than the appeal of the anecdotes deriving from the cases, is this morally much different than those Pennsylvania judges building and owning a juvenile offender warehouse and then filling it up from the bench??

I am also reminded of two things:
1) In an ecosystem, parasites invariably perform a necessary function.
2) Not all analogies are valid.
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Anonymous Coward, 3 Jun 2009 @ 9:38am

Re: Same Address
From Google Street View, the tallest building in town (Chase Bank building) appears to be 4 stories, with most buildings 1 or 2 stories.
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Anonymous Coward, 3 Jun 2009 @ 10:02am

How represenative of "The People" is Eastern Texas?
I wonder if there was a casual connection between Marshall and either the Bush DoJ or the Bush Dept of Commerce, which oversees the USPTO.

Point is, it's very difficult to understand the logic and reasoning behind such a small town of 24,000 having the resources to properly hear, understand or speak properly to, the intricacies of not only business, but also creative, inventive, fabrication, research, and other technology-heavy processes.

Yet, the court is often saught for it's vast experience in such cases is often looked to for what is considered "A fair ruling".

Does Marshall and/or surrounding areas (let's say 100 miles) have a Fortune 10 company that devotes more than 10% of Gross Annual Income to R&D? A "Yes" may change my perspective of the decisions handed down by the Court.
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Shawn (profile), 3 Jun 2009 @ 10:11am

http://maps.google.com/maps?hl=en&safe=off&client=firefox-a&rls=org.mozilla:en-US:offici al&gl=us&um=1&q=201%20W.%20Houston%2C%20Marshall%2C%20Texas%2075670&ndsp=18&ie=U TF-8&sa=N&tab=il
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- Anonymous Coward, 3 Jun 2009 @ 11:52am
  
  Re:
  Yup, and if you streetview it, right next door is the courthouse. I would suspect there would be more than one law firm at that address.
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Anonymous Coward, 3 Jun 2009 @ 10:23am

So let me get this right, from reading the patents, every single form of commerce on the interwebs using any form of currency that is not an actual currency is illegal. This would make paypal illegal, electronic gift cards illegal, any kind of pay for credit system illegal. This has got to be the biggest joke. I am completely against these kind of blanket patents and copyrights. This being said I am an artist, web designer and hopefully soon a programmer and release anything that is mine into use freely for anyone non-commercial unless it is for a client. Our entitlement and ownership society has got to change to an earned and respected society.

Avengingwatcher
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- angry dude, 3 Jun 2009 @ 10:49am
  
  Re:
  "...and hopefully soon a programmer..."
  
  This gave me a good laugh
  
  You mean you don't know yet if you can write code ?
  
  Dude, pls leave programming and patent matters to more capable folks !
  
  hopefully soon a patent troll
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  - Anonymous Coward, 3 Jun 2009 @ 6:29pm
    
    Re: Re:
    Yes, listen to wise old AD - because others are not allowed to voice their opinion or comment on things AD related.
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  - Kirk, 12 Jun 2009 @ 8:27am
    
    Re: Re:
    You've made yourself look smaller than you made him feel. Keep practicing.
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RonW, 4 Jun 2009 @ 5:56pm

I am not sure about this 'token' aspect, but back in 1999, I was working on an e-commerce site that allowed users to purchase news stories in electronic form from my client's archive. Because many stories had prices less than the (then current) minimum credit card charge, we allowed to establish a balance using their credit cards. Then each story purchase decremented the user's balance. Also, we stored users' payment info so they could reload their balances without re-entering all of their payment info.
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staff1, 7 Jun 2009 @ 7:16pm

conflict
"At some point, do people start questioning whether or not there's a conflict of interest there?"

oh we question if there's a conflict alright...yours
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MikeIP, 11 Jun 2009 @ 1:56pm

"Can anyone explain how these concepts were not obvious at the time of filing?"

Nice try. You obviously still have no idea of how the patent system works. Patent applicants are required to prove nonobviousness when presented with prior art that makes the invention obvious at the time of filing. Have you done that? Do you ever do that? No.
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Kirk, 12 Jun 2009 @ 8:25am

Conflict of Interest
Forget the street address. I want to know why it's ok for this judge's son to practice patent law in the same city.

Even if the lawyers addresses weren't the same. This daddy's boy will see cases decided by his dad's coworkers (whose work addreses ARE all the same.) That's assuming they bother to prevent his dad from deciding his cases. A generous assumption, I know.
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