Push patents raise issues for industry
Intermind is about to receive a patent it hopes will force Microsoft, Netscape, and other push players to pay royalties.
The Seattle-based firm makes its own push channel software called Intermind Communicator, but it will stop development of the product and focus instead on licensing its soon-to-be patented technology. The company had let go almost 20 percent of its staff earlier this year in an effort to refocus on product development, according to then-president Matt Highsmith. Highsmith has since left to start his own venture.
"We expect to exert our rights to license our technology," said new Intermind president Gordie Gardiner. "We're confident in the validity of our patents due to how early Intermind began working on this back in the early '90s."
The case underscores the growing role of intellectual property rights as Internet software evolves at breakneck speeds. Critics of the U.S. Patent and Trademark Office say the agency is understaffed and ill-trained to judge the uniqueness of rapidly evolving software products.
Potential targets of Intermind's licensing for the most part declined to comment until reviewing the patent language. "We don't believe Netscape is in violation of any patent claim by Intermind," said a Netscape representative.
A spokeswoman for Marimba, which makes software that distributes and updates applications automatically onto user desktops, said the company has no position or comment for the time being. Microsoft representatives were not immediately available for comment.
Intermind received written notice of allowance from the Patent and Trademark Office last week, a move that means the patent will formally be granted after certain processing steps, including payment. However, Intermind can begin negotiations with other companies that it believes are infringing on its patent. Gardiner declined to say whom he has contacted so far.
The patent covers any situation "when a publisher and subscriber exchange a control structure of metadata that automates persistent delivery of information," Intermind cofounder Drummond Reed said. "You don't just get a new flow of info; you get a whole variety of ways to control that flow."
Reed's description of the patented technology sounds like the function of the Channel Definition Format (CDF) file that Internet Explorer 4.0 supports or the mechanism Netscape's Netcaster uses to update channels. Reed and Gardiner are counting on that similarity to create a new revenue stream for their struggling company.
"There are a broad category of potential licensees," Gardiner said, citing the leverage patent holders enjoy under U.S. law. "It isn't just the creators of infringing product, but the users of the infringing product and even the distributors."
When asked how he expected to get licensing fees from a free product such as IE 4.0, he responded: "There are formulas to determine the value of a free component of a larger product."
Intermind will make a formal announcement tomorrow and post more details on its Web site.
Even if the Intermind patent covers the technology of other businesses, it's certainly not assured of cashing in.
"They can try to sue Microsoft, and Microsoft could turn around with five other patents and say, 'Well, you're infringing on these. Make our day,'" said Jay Verkler, CEO of inCommon, which makes an information delivery product called Downtown. "It's a game called 'mutually assured destruction.'"