Western Union Gets A Patent On An Exchange For 'Alternative Currencies'

from the because-moneychanging-is-a-new-concept? dept

Remember how the USPTO isn't supposed to be granting patents on "abstract ideas" like escrow services or payment settlements? Right, so it appears that on April 1st (yes, April Fool's Day) of this year, the US Patent Office granted Western Union a patent on an exchange for "alternative currencies." The patent (8,688,563) is technically for "Alternative value exchange systems and methods." And while it was filed in October 2009 -- nearly a year after the original Bitcoin paper -- it was before people were really talking about Bitcoin. So the filing doesn't mention Bitcoin, but does mention many of the more popular digital currencies that came before it (mostly from online games) as well as local currencies which have become increasingly popular as well:

There are many different types of alternative currencies (herein also “alternative forms of value” or simply “alternative value”), each currency representing what the community holds valuable (e.g. time, labor/skill, goods/services, etc.). Alternative currencies currently in use include: “LindenDollars”—Second Life; Amazon.com's “Quest Gold”; World of Warcraft's (WoW) virtual “Gold”; Ithaca Hours (Ithaca, N.Y.); Carbon credits; regional currencies in Germany; “Dotz” (Brazil); Tradebank “Credits” (Construction-centric barter network); “Lassobucks” (Time/Skillset currency); Maha Vitaran—Indian power utility barters with other utilities for power; “Bartercard”—Loaded with goods & services (not cash), used in exchange for other goods & services. Many others are planned or currently in development.

But here's the problem: exchanging currencies is not a particularly new idea. In fact, it's a very, very old idea. If you read the actual claims of the patent, they're basically describing the same abstract idea of any currency exchange platform -- having people offer to exchange currency, determining the values of the different currencies, and determining at what "price" to do the exchange.

It's unclear exactly what Western Union will do with the patent -- the company itself has mocked Bitcoin -- but it does remind us that there's likely to be a growing number of patent battles in the Bitcoin space before too long. eBay has also received some attention for seeking a patent on a Bitcoin currency exchanger -- but that's still an application that has yet to be approved. Still, there are a lot of others rushing in to patent aspects of Bitcoin, and I imagine it's only a matter of time until some entity, having nothing to do with Bitcoin, seeks to claim key aspects of Bitcoin as its "intellectual property."

Filed Under: alternative currencies, bitcoin, currency exchange, patents
Companies: western union

FBI And CIA Use Patriot Act's Bulk Data Collection To Get Money Transfer Data

from the of-course-they-do dept

You didn't think that the bulk collection of phone record information was the only set of records that the intelligence community collected in bulk under the PATRIOT Act, did you? Of course not. That provision says it can be used for "any tangible thing," and since that seems to include bulk data collection, money transfer info sure would be handy for the feds. Both the NY Times and the Wall Street Journal are running fairly detailed stories about this bulk collection of money transfer data, which is managed by the FBI, but where the data is quickly shipped on to the CIA. They claim that they're focused on foreign-foreign transactions, but sometimes they'll collect Foreign-Domestic transfers as well.

The NY Times piece has a fun section describing all the little ways NSA and other intelligence officials have more or less let it slip that a program like this was going on -- but also quotes someone saying that there's at least one more type of bulk collection that hasn't been revealed yet (and it may be more than one). The WSJ article reveals that Congress only just found out about this program over the summer, even though it's been approved by the FISA Court for a while -- so the usual defenses from the NSA's best friends is inevitable: "it's all legal," they'll say. That said, the report also notes that some in Congress were quite worried.

Of course, some others, even those who worked in the government, find this whole thing problematic. The WSJ piece has a great quote from Timothy Edgar, who worked as a private lawyer for the NSA and the Director of National Intelligence, where he basically tells them that this information should be public:

"The public has a right to know about the broad outlines of how the government is collecting information on them," he said, noting that the FISA Court has noted the existence of other collection programs. "As a matter of basic good governance, the government should be more transparent about these kinds of collection programs."

Yeah, but the US isn't really big on "good governance," is it? In the end, this might not be surprising (and should have you wondering about what other data troves the US collects via Section 215), but it's still quite revealing. It also reminds us that the government is likely collecting a lot more that hasn't been revealed yet.

Filed Under: bulk collection, cia, fbi, money transfers, nsa, patriot act, section 215, surveillance
Companies: western union

The Telegraph And Natural Monopolies In Communications

from the how-do-you-deal-with-them? dept

A bunch of folks have sent in Matthew Lasar's excellent look back at some of the early days of the telegraph system and how it parallels some questions that we face today over things like net neutrality. The basic story is that Western Union worked out a way to gain a monopoly on the telegraph, and then worked out a deal with the Associated Press, whereby all AP papers would use Western Union, and none would support the creation of a competing telegraph company. From all of this, there is even the suggestion that a presidential election was stolen. It's a worthwhile read.

Of course, the parallels are not perfect, and there are lots of other questions to be raised, but there are some good points to think about, when you're dealing with a communications system that is, effectively, a natural monopoly. As the FCC suddenly seems open to the concept of line sharing again, after being down on it for so many years, it's at least worth looking at the history on things like the telegraph, to understand why competition really is a good thing, especially when it comes to the major means of communication.

Filed Under: history, natural monopolies, telegraph
Companies: western union

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

from the pay-now dept

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?

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