• SBC Communications "Frames" On-line Sellers By Seeking Royalties For Patent Covering Internet Frames
  • November 18, 2003 | Author: W. Scott Petty
  • Law Firm: King & Spalding LLP - Atlanta Office
  • SBC Communications, Inc., the U.S. Baby Bell in the West, has asserted that it is the exclusive owner of a technology for "structured document" browsing - the use of frames to provide hyperlinks to documents displayed by a browser. SBC Intellectual Property, the IP management division of SBC Communications, has reportedly contacted companies conducting sales operations on the Internet with an invitation to pay royalty fees for use of SBC's patented approach to frames at a Web site. This is not the first instance of a telecommunications company making a claim of ownership for a widely used technology on the Internet. British Telecommunications Plc ("British Telecom") has pursued royalties from Internet Service Providers (ISPs), such as Prodigy Communications Corp. ("Prodigy"), based on its patent allegedly covering the "hyperlink" -- the document linking technology commonly used by Internet users to "surf" among web pages by merely clicking on a highlighted link.

    One of the recipients of SBC's license offer, MuseumTour.com, operates an on-line catalog selling educational products. MuseumTour.com's web site "has links on the left side that go to other web pages within the site but does not lose the left side navigation links." MuseumTour.com has responded to SBC's license offer by publishing the license offer package and royalty fee schedule at its Web site at www.museumtour.com/sbclawsuit.html. The royalty fee schedule is dependent on a company's revenues and provides a range of "preferred" license fees, starting with a minimum annual royalty of $527 for companies with $100,000 revenue in 2002 and extending to a fully paid-up license fee of $5 million for companies with $10 billion in 2002 revenues. In a statement released by SBC Intellectual Property regarding the structured document browser patents, the company indicates that it "is committed to working with ... entities to establish licensing terms that are reasonable and fair for all parties."

    SBC Communication's claim of ownership for a common Web site formatting tool is based on a pair of patents, U.S. Patent No. 5,933,841, having a grant date of August 1999, and U.S. Patent No. 6,442,574, which issued three years later in 2002. Both patents cover a "structured document browser" having an invention date at least as early as May 1996, which is the filing date for both the original application that matured into the '841 patent and the continuation application that resulted in the '574 patent. The claimed browser includes a constant user interface for displaying and viewing sections of a document that is organized with embedded codes specifying the structure of the document. The tags are mapped to a set of icons which, when selected, will result in the browser displaying a section of the document structure corresponding to the selected icon, while preserving the user interface.

    A representative claim of SBC's '574 patent, independent Claim 7, recites a method for navigating a document having multiple sections. The claimed method comprises the steps of:

    1. displaying a document with a browser comprising a user interface;
    2. automatically displaying a plurality of selectors in the user interface of the browser and not in the document, the plurality of selectors automatically configured to correspond to respective sections of the document regardless of what section of the document is being displayed;
    3. receiving a selection of one of the plurality of selectors; and
    4. displaying a section of the document that corresponds to the selector selected in (c).

    Internet advocates have criticized the Patent Office for granting patents covering popular Web site features and enabling patent owners to set-up a toll booth on the Internet to collect royalties for use of such patented features. These critics also denounce holders of Internet patents who seek to monetize their patent assets by setting-up patent enforcement programs to pursue licensing revenues and litigation objectives. A commonly asserted criticism is that many Internet and software patents are invalid in view of prior mainframe computing and data communications technologies.

    A favorite target of critics is Amazon.com, which has successfully sought patent protection for its on-line business models and has used patent litigation to do battle with its competition. Amazon's patent portfolio first received the attention of on-line merchants and the Internet community in Fall 1999 when the company obtained a patent covering a technology that enables on-line consumers to order, pay for, and arrange for delivery of items sold via a Web site, all with a single-click of a mouse. Amazon's assertion of the "one-click" patent in an infringement lawsuit against BarnesandNoble.com effectively forced the competitor to redesign its "Express Lane" on-line ordering system during the 1999 holiday shopping season.

    Internet advocates also have loudly denounced British Telecom's "tardy" enforcement of a 1989 "hyperlinking" patent because British Telecom began seeking patent royalties only after the Internet community established hyperlink technology as the standard for linking content at sites operating on the World Wide Web. In mid-2000, British Telecom approached ISPs in the United States with patent license offers, only to have those offers reportedly declined by all parties. Switching enforcement tactics, British Telecom then transitioned from a license offer letter-writing campaign to the courtroom and selected Prodigy as its first patent litigation target. This litigation approach ended badly for British Telecom, however, as the trial court held that, as a matter of law, no jury could find that Prodigy infringes British Telecom's patent on a computing technology created prior to the advent of the Internet.

    A recent target of critics of Internet patents is Forgent Networks Inc., a provider of enterprise video network software and services. Forgent Networks dusted the cobwebs from its patent portfolio in 2002 and embarked on a licensing program for a 1987 patent that allegedly covers the JPEG standard for compression of full-color or gray-scale still images. Proving that you can indeed find a "Rembrandt in the Attic,"; Forgent Networks announced in June 2002 that it had successfully inked patent license agreements with Sony Corp. and an unidentified Japanese electronics manufacturer.