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Apple And PayPal Hit With Lawsuit Over Patent For ‘One-Click’

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Amazon’s patent on its “one-click” checkout system first made headlines over a decade ago, and became a notorious “Exhibit A” for those who argued that software patents were being granted too readily and were hindering, rather than helping, innovation. The company sued Barnes & Noble (NYSE: BKS) in 1999 and forced the bricks-and-mortar chain to settle on confidential terms. Ironically, Amazon (NSDQ: AMZN) itself was sued in 2006 for violating a different one-click patent by Cordance Corp., a small Washington software company. Amazon lost that case in 2009 but is appealing. Now, Cordance has fired off a new patent lawsuit, demanding royalty payments from Apple (NSDQ: AAPL), PayPal, and retailer Victoria’s Secret.

Apple and Victoria’s secret both have one-click checkout systems that Cordance claims violate its patent, and the company also alleges that PayPal’s “checkout with PayPal” system infringes. The complaint is embedded below.

Cordance was apparently once an operating company, but its website appears not to have been updated since 2006. And when a Google (NSDQ: GOOG) search on your company name results in two links to your company and eight links related to patent lawsuits you’ve filed–well, you’re in “patent troll” territory.

In order to prosecute this lawsuit, Cordance has partnered with Acacia Research Corporation, a California company that specializes in patent enforcement. Acacia partners with patent-holders, handles litigation for them, and splits proceeds typically on a 50-50 basis. Cordance’s co-plaintiff in this case is Efficient Online Purchasing, LLC, a shell company which has the same Newport Beach, Calif. as Acacia.

As patent blogger Florian Mueller notes, this suit is further evidence that no business can escape the ever-growing world of patent lawsuits at this point. The Cordance suit against Victoria’s Secret is actually one of two patent lawsuits that were just filed against it. Checking the federal courts database, I quickly found three more suits, all based in East Texas, a venue considered friendly to patent trolls. That makes no less than five active patent lawsuits against Victoria’s Secret, a remarkable tally for a retailer that several years ago probably wouldn’t have dreamed that it would get wrapped up in patent disputes just because it put together a decent e-commerce system.

(For patent geeks, the other East Texas cases where Victoria’s Secret has been sued are: Parallel Networks, LLC v. Adidas et al,, Soverain Software LLC v. J.C. Penney, et al., and Stambler v., et al.)

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2 Responses to “Apple And PayPal Hit With Lawsuit Over Patent For ‘One-Click’”

  1. gena777

    The recent Intellectual Ventures suits present just one example showing that the NPE (“patent troll”) business model is fast becoming dominant in the world of IP. Thomas Edison held over 1,000 patents, but practiced none of them. He invented, which is what he did best, and let others manufacture products from his inventions. If an inventor cannot sue for patent infringement and recover damages, they why should anyone invent anything? Only vigorous patent enforcement rewards inventors for their inventions and incentivizes others to invent.