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First Come, First Sue

Patents on everyday Web innovations could hurt large and small e-businesses.

How fast is your Web site shopping checkout? Just one click? How do you bring new customers to your Web site? Through partner sites? You may be infringing on an patent and not even know it. Much to the chagrin of the Net community, patented its "1-Click" checkout in 1999 and its affiliate-program technology this year.

Both patents fall under the vague "business method" patent category that allows 17 years of protection. If it sounds like a far-off threat, it's not: didn't hesitate to bring a case against for its version of the 1-click checkout. The case is still pending, but had to change its system in the meantime.'s patents have prompted a Net boycott. and ( are two such boycott headquarters. claims its ranks amount to about 3,900 lost customers.

A call-to-action campaign headed by computer book publisher Tim O'Reilly ( has garnered a response from CEO Jeff Bezos. won't give up its patents, but Bezos has launched a call for patent reform. Included in his letter posted on, Bezos calls for a retroactive three- to five-year patent time limit, a public comment period and the creation of a database of prior art to aid the U.S. Patent and Trademark Office in making decisions.

While isn't likely to hunt infringing small businesses online, it's just one of many companies patenting seemingly obvious Web technology. A rash of Web patents and lawsuits could threaten the wide-open frontier of e-commerce for large and small businesses alike.

This story appears in the June 2000 issue of Entrepreneur. Subscribe »