The man who says he invented your ability to access the Net -- no , not Al Gore...

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From: Zhang, Yangkun (Yangkun.Zhang@FMR.COM)
Date: Thu Nov 02 2000 - 13:32:47 PPET

Patent Chutzpah
Krysten A. Crawford, Forbes Magazine, 11.13.00

Berkeley, claims to own the rights to the way many interactive Web sites or
internal networks operate. And he's got three patents, from between 1996 and
1999, that say he does. His methods let a computer user request information
from a Web site's server and get it back. Something like this goes on when
you download a Web page.

But now Konrad wants 35 of the country's largest corporations--including
General Motors, United Air Lines and Hilton Hotels--to start paying him to
use that method. And as absurd as it may seem, some are. It's the latest
example of how dubious patents for an idea, rather than a physical
invention, are being deployed to extract ransom from companies. The stakes
here--who owns the delivery of Web-based information--are huge.

"Konrad is essentially trying to collect rent on the entire Internet," says
Lee Van Pelt, a California patent attorney not involved in the case.

Konrad launched a carefully calculated attack earlier this year by filing a
federal patent-infringement suit in Texas. (His patents are known
collectively as "Remote Information Service Access System Based on a
Client-Server-Service Model.") The defendants, from Ford to Hertz to
Marriott, are mostly auto, airline or hotel companies with big reservations

Why file in Texas? The state has a reputation for being friendly to
plaintiffs with wacky claims. And notice that he sued corporate users of the
process but not the obvious targets--the makers of interactive Web software,
like Microsoft or Sun Microsystems. Could that be because a Sun or a
Microsoft would be motivated to fight back?

Three defendants capitulated in the summer. Motorola, Boeing and Eastman
Kodak agreed to pay Konrad an undisclosed licensing fee, estimated at
somewhere under $1 million each. Jonathan Meyer, senior intellectual
property lawyer at Motorola, said the company doesn't believe it violated
the patents, but found it cheaper to settle. The suit potentially affected
hundreds of Motorola Web and intranet sites, and Konrad was demanding the
computer code for each, much of it confidential and expensive to gather.

Web software companies have a lot at stake and have counterattacked.
Microsoft, Netscape and Sun Microsystems sued Konrad in California last May,
in an effort to invalidate the patents. Their claim: Konrad's method was
used long before he filed his first patent application in 1993. Microsoft et
al. had another motivation for stepping in: Some of their customers had
asked them to pay legal fees and any damages.

The remaining 35 corporate users of Web software intend to fight, says
lawyer Kenneth Adamo, of Cleveland-based Jones, Day, Reavis & Pogue.
Konrad's claims are simply too broad, he says: "It's like he invented the
1948 Packard, and now he's trying to say he owns every automobile known to
God and man."

Konrad's lawyer, Richard Urquhart, says there are varied ways to interact
with a Web site, but if companies want to use methods that have been
patented, they will have to pay.

These so-called software business-method patents are flourishing these days.
The number of applications for them is expected to double to 5,000 this
year, thanks to a favorable federal appeals court decision in 1998.
Naturally, litigation is following. Recall Amazon's suit, now on appeal,
alleging that Barnes & Noble infringed its one-click patent, under which
Amazon purports, in effect, to own the very concept of streamlining an
Internet transaction.

Both Congress and the patent office are talking about giving more scrutiny
to sweeping business-method patents. But Allan Konrad has pocketed his
bushel of money and is waiting for more.

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