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Summary:

A business that pays people to expose bogus patents announced it will offer a cash reward to the person who can show that putting an adverti…

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photo: Shutterstock / Sergej Khakimullin

A business that pays people to expose bogus patents announced it will offer a cash reward to the person who can show that putting an advertisement before an internet clip is not a real invention.

The controversy in question turns on US Patent 7,346,545 which is called “Method and system for payment of intellectual property royalties.” The patent was issued in 2001 and is being used as a weapon against Hulu, Yahoo (NSDQ: YHOO) and WildTangent in a long-running court case.

The patent office is only supposed to issue a patent if a claimed invention is new and non-obvious.

Article One says it will pay $5,000 to whoever provides the best evidence from anywhere in the world that the idea of using video ads existed before May, 1999.

Article One is a bounty hunter paid by the targets of nuisance patent lawsuits. It deputizes members of the general pubic by offering them a reward to find “prior art” to wipe out the patent.

In this case, Article One is likely being paid by Yahoo or Hulu. It would be ironic if Yahoo is behind the bounty given that it recently used 10 patents to sue Facebook over claims it is the real inventor of the social network. The ten patents have been the source of scorn and ridicule by investors.

Advocates of patent reform received a glimmer of hope yesterday after a unanimous Supreme Court ruled that medical dosages are a natural law like buoyancy or gravity, and can’t be patented.

The Supreme Court decision was another in a series of rebukes to the Court of Appeals for the Federal Circuit. That court is the same one that found that the internet advertising clip patent is valid.

Techdirt has a history of the advertising patent here.

  1. This patent claim is a lot more specific than you state. It only applies to ads delivered before IP protected content that is available for purchase, not for the putting of ads in front of all content. There are other specifics, like that the ad must be chosen from a list of sponsors, that the viewer must agree to view the ad in return for the content, etc.

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  2. Thanks for your comment, Jim. With respect, I can’t see a difference between ads delivered “before IP protected content” and content in general — all content is copyright protected unless otherwise designated. As for the requirement that “the ad must be chosen from a list of sponsors” — do you really think this is evidence of an invention deserving of a 20 year monopoly? Or just a clever lawyer who gamed the patent system at at a time (2001) when the USPTO was granting a patent to just about anything?

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    1. Oh I have no idea if the patent is valid or not, I am not a lawyer and this part of the law is pretty fuzzy I believe. But the patent does not seem as broad as your article implies. I am going to circulate this around a mailing list of early Wired and HotWired employees as there is almost assuredly some prior art that this crowd knows about. Thanks for the article.

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  3. Ihaveascreenname Thursday, March 22, 2012

    So, maybe I’m misunderstanding something, but it seems like movie previews would be enough to squash this patent. Those are the ultimate “ads before video”, especially since many DVDs make an extra effort to not let you skip them, and even with VHS, you at least had to fast forward through them, so you were technically viewing all the ads (albeit at a high rate of speed.)

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  4. Everyone, pay attention.  Article One is an agent for big invention stealing companies.  They probably make tens of millions if they can find prior art to invalidate an invention.  The companies infringing the invention are probably at risk for hundreds of millions of dollars.

    So do not be a chump and hand them incredibly valuable art for $5000. 

    Large companies have a profound arrogance and routinely try to rip off independent and small business inventors.  When they get to this point they are desperate.  So at least make sure you are fairly compensated.  If you really have prior art it is probably worth something the the range of ten to a hundred million dollars. 

    DO NOT interact with any big company or their agents without attorney representation.  They will cheat you just like they try to cheat every inventor.  Get an attorney to represent you on a contingency basis, pay them a third plus expenses.  It will be worthwhile because they are the only way you will extract fair value.

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