Tuesday, March 15, 2011

Cordance asserts one-click checkout patent against Apple, PayPal and Victoria's Secret

In the age of e-commerce and software patents, even a company like Victoria's Secret has the pleasure of defending itself in more than one patent dispute at the same time. A couple of weeks ago I reported on unlikely bedfellows Microsoft and Google suing GeoTag, a company that has sued 397 companies over a geotagging patent. Victoria's Secret is #378 on that list. And now it has been sued, alongside Apple and PayPal, over a one-click checkout patent.

The lawsuit was filed yesterday with the US District Court for the District of Delaware (case number 1:11-cv-00222) by Delaware-based Efficient Online Purchasing LLC and Washington state-based Cordance Corporation. I haven't been able to find out anything about Efficient Online Purchasing LLC. Its role is described in the complaint as "exclusive licensee". It could be that Cordance, or someone close to Cordance, set up that company to have a Delaware-based entity for the purpose of litigating in that district.

Cordance itself has previously made headlines through a patent dispute with Amazon.com. That battle started in 2006 and was considered "ironic" against the backdrop of Amazon's own history of enforcing its one-click patent against Barnes & Noble and other companies. Amazon obtained a jury verdict against Cordance in the same district court, but the judge decided differently ("as a matter of law"), and now the Court of Appeals for the Federal Circuit (CAFC) is looking at a certain aspect of the federal court's decision.

The patent Cordance and its Delaware-based "exclusive licensee" are now enforcing against Apple (for the one-click purchasing function of its iTunes store), PayPal (for the "Check-out with PayPal" platform) and Victoria's Secret (for a one-click express checkout function of its online store) is US Patent No. 6,757,710 on an "object-based on-line transaction infrastructure". The patent document is approximately 130 pages long. The application for the current patent was filed in 2002, and the patent was granted in 2004. However, it has a long history, which is described as follows:

"This application is Continuation of prior application Ser. No 09/570,675, filed on May 15, 2000, now U.S. Pat. No. 6,345,288 Allowed, which is a Continuation of application Ser. No. 09/143,888, filed on Aug. 31, 1998, now U.S. Pat. No. 6,088,717, which is a Continuation of application Ser. No. 08/722,314, filed Sep. 27, 1996, now U.S. Pat. No. 5,862,325, which is a Continuation-in-Part of application Ser. No. 08/609,115, filed on Feb. 29, 1996 now U.S. Pat. No. 6,044,205."

The short version is that the great-great-grandfather of the current patent goes back to February 1996, and due to the way continuations of patents work, this ancestry has implications for, among other things, the search for prior art that might be used to have this patent invalidated.

Cordance, which describes itself on its corporate website as "the pioneering developer and provider of digital addressing technology" (but the latest press release on its website was issued in 2006), was previously named OneName Corporation. The patent was assigned to the company under that name.

Cordance wants an injunction against and compensatory damages from all defendants. In Apple's case, Cordance claims that infringement is willful and asks for treble damages. The complaint doesn't explain why Cordance believes that Apple knew about the patent, but there may have been some contact between those companies at some point.

I'm sure that Cordance believes it has rights against many other e-commerce companies. After taking on Amazon, it has now elected to sue Apple, PayPal and Victoria's Secret, but depending on how the lawsuit goes, it won't stop there. Cordance and its "exclusive licensee" may already be trying to collect royalties from other companies.

Finally, a very interesting detail: the "inventor" of the asserted patent, Drummond Reed, serves as Cordance's chief technology officer, and his bio on the Management Team page of the corporate website mentions that he "led the effort to contribute [certain] patents to XDI.org so they could become open, public, royalty-free standards. XDI.org subsequently contributed this intellectual property to OASIS where Drummond serves as co-chair of the XRI (Extensible Resource Identifier) Technical Committee with Gabe Wachob, Chief Systems Architect, Visa International, and co-chair of the XDI (XRI Data Interchange) Technical Committee with Geoffrey Strongin, Platform Security Architect, AMD."

Sounds like a benefactor of humanity. So why doesn't he just offer that one-click checkout patent as an open, public, royalty-free standard to Apple, PayPal, Victoria's Secret, and Amazon.com?


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