August 30, 2007

An Obviousness Smackdown [12:50 pm]

Albeit a painful and expensive process — yet one that exploited internet tools: Playing Detective in a Patent Case

“It’s a victory against patent trolls,” Mr. Goldin said. “This has changed the landscape. The days of coming up with an obvious idea and patenting it and using legal extortion are over.”

The Texas ruling was one of the first to apply a new test established by the Supreme Court on April 30 that makes it more difficult to obtain patents on new products that combine elements of already existing patents. Experts say the Texas opinion was certainly the first to apply the new standard to financial services and probably the first to apply it to a business method.

[...] On Feb. 28, 2006, at AdvanceMe’s request, he says, he met with its chief executive, Mr. Goldman, and the president, Tom Burnside, who offered to license their company’s collection methods to him. “I said, ‘I don’t understand how you can have a patent on something that has been around since the 1980s,’ ” he recalled. “They kept saying they had a ‘patent on the technology.’ ”

The next day, Mr. Goldin says, Mr. Goldman called him to say his company had filed a patent infringement lawsuit against AmeriMerchant — on the day before their meeting.

His first reaction was fear. His second was anger. “Losing was not an option,” he said.

Mr. Goldin, 35, said he found out that the only way he could win was to get AdvanceMe’s patent invalidated, and to do that he had to find written evidence that its payment system had been around at least one year before the patent was filed in July 1997.

He started a blog (http://merchantcashadvanceblog.blogspot.com/) to argue his case and appeal for supporting evidence.

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