Web-Services Patent Could Trip Up IBM, Microsoft

Tech goliaths such as IBM, Microsoft, and Sun Microsystems have big plans for Web services, but they may face a potential David--a.k.a. Charlie Northrup, chief executive of Global Technologies Ltd. Inc. in Princeton, N.J. His metaphorical slingshot is patent 5,850,518--also referred to as patent 518--which he filed in 1994.

It covers two claims, which were intended to protect Global Technologies' initial entry into Web services. Northrup summarizes the patent claims in this way: "When a program is running, it needs to be able to register that it's available as a service--and indicate the types of services it can give you. Similarly, the program should be able to select any registered services that are out there that it can take advantage of. It should also be able to determine which ones it currently knows about, load the ones that it doesn't yet know about, connect to those services, and use them."

Patent 518 appears to intersect with Microsoft's .Net strategy and Sun's Liberty Alliance, says Northrup, who adds that he doesn't plan to file a claim of patent infringement. But those plans may change. Northrup has another set of Web-service related patents slated for approval in about two months, and his company just started seeking financial backing to cover the cost of filing other patent claims. At some point, Northrup says, he may create a separate company that's focused solely on intellectual property. And the decision on whether to file for patent infringement, he says, will be influenced largely by any financial backers he enlists. "If you're putting up money, you're looking to make money," Northrup says. "You can do that on products or you can do that on licensing intellectual property."

Intellectual-property attorney G. Gervaise Davis of Monterey, Calif., firm Davis & Schroeder isn't sure whether Northrup has a case, since he hasn't reviewed the wording of the patent claims. But Microsoft, Sun, and others should closely analyze the patent soon for possible conflicts, he says. For starters, patent litigation is second only to antitrust cases when it comes to fees, typically running upwards of several million dollars, Davis says. That doesn't even include the time and energy drain on execs and engineers. And about 70% of patent cases that are litigated are upheld as valid, he says. "It's the sort of thing you want to avoid at all costs."

But the biggest threat may lie with market share. Patent infringement not only affects manufacturers, but product users and sellers as well. If worse comes to worst for Microsoft, for example, users of .Net could be sued. Both Microsoft and IBM declined to comment, although both companies own patents that reference patent 518. An online document from the U.S. Patent and Trademark Office indicates that there are three others with patents that reference patent 518: Novell, Cognex, and Ian James Stiles of Stiles Invention. But this alone is no indication of whether Northrup has a bona fide infringement case. Davis emphasizes that patent law is very precise, and semantics will make or break cases. If patent-claim wording is too narrow or neglects to specify something--no matter how obvious it may seem--then corporate attorneys will identify those flaws, and Northrup won't have an infringement case.

Northrup says he wants the patent to ensure that the Web-services market is open to all comers and isn't just the domain of big vendors: "That's not what's happening right now, and it's annoying." He says he has about 50 other sets of claims to file that were originally part of patent 518 (a 144-page document). But his four-person company will need financial backing to make that happen, Northrup says. When patent-lawyer fees and other due-diligence costs are calculated, each claim set can cost from $10,000 to $20,000 to process.

See the full text of patent 518 at http://164.195.100.11/netacgi/nph-Parser? Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=/netahtml/srchnum .htm&r=1&f=G&l=50&s1='5850518'.WKU.&OS=PN/5850518&RS= PN/5850518

View all five patents that reference patent 518 at http://164.195.100.11/netacgi/nph-Parser? Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2Fsearch-adv. htm&r=0&f=S&l=50&d=CR98&Query=ref/5,850,518