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Open Market seeks partners

A key executive signals that the e-commerce software vendor wants to use its new software patents to forge ties with other companies.

LOS ANGELES--A key Open Market (OMKT) executive is signaling that the Internet commerce software vendor wants to use its three new software patents to forge new ties with partners, not just to exact licensing fees.

In an interview with CNET'S NEWS.COM, Robert Weinberger, Open Market's vice president of marketing, suggested that legal actions against infringers are only a last resort.

"We see this as an opportunity to strike good, strong relations with partners. In general, no one wins when there is litigation," Weinberger said. The company has begun discussions with some current partners, he added, declining to name anyone.

Separately, one legal expert who has reviewed the patents says they were carefully drawn, making them more defensible in any legal challenge.

"These people are not amateurs," said Robert Merges, law professor at University of California, Berkeley, and codirector of the Berkeley Center for Law and Technology. "These are professionally done. That doesn't mean there isn't a smoking gun or a hole in these, but these patents will not be easy to get rid of."

Weinberger underscored the impression that the patent covering secure, real-time payments over the Internet is the most important of the three.

When the U.S. Patent and Trademark Office gave Open Market an indication last year that it would grant the payment patent, the company stopped talking about it with outsiders, he said. That was because it could be a "material" factor that would affect the company's future prospect to any investor in the publicly traded firm, a category of information that is strictly regulated by the Securities and Exchange Commission.

Open Market has said it believes the patent covers Internet credit or debit card payments that get immediate authorization over the Net, a category that would cover, among other things, any payments under the Secure Electronic Transactions (SET) protocol being pushed by Visa and MasterCard.

Another Open Market patent covers the widely used "shopping cart" in Internet stores, which lets a shopper collect more than one purchase before checking out of a storefront. The other patent covers the way visitors passing through a Web site are tracked.

Weinberger suggested the three patents essentially give Open Market bargaining chips in talks with other companies that may have software patents of their own that Open Market may have used.

"Cross-licensing is a very common practice," he noted.

Open Market clearly sees the patents as improving its chances of being a long-term Internet player.

"These round out the staying power of a company," Weinberger said. "It's one more thing that puts us in the 'player' category."

The patented technology may have applications outside of e-commerce. Open Market's patent "digital offers" and receipts, part of the shopping cart patent, Weinberger said, might be used for sending email securely through a firewall, for example. In that case, licensing the patents could give other companies a jump start in writing their own Internet software.

That would require giving licensees software tools to implement Open Market's technology in their own software, something Weinberger suggested the company is willing and able to do.