March 13, 2000-- Newsletter #71

By Vince Barnes

Goodies to Go (tm)
March 13, 2000--Newsletter #71
Please visit

Last week's newsletter prompted a lot of email. Many of the emailers were upset because, they said, my email address is hard to find. I didn't know that it was. To fix that, my email is now on the HTML Goodies home page, or you can just write it down:

Please know that every letter to this email gets an auto-response. I can't say that I'll respond to your email, but I do look at it.


Greetings, Weekend Silicon Warriors,

Did you hear...

At least one of the four front running U.S. presidential candidates is weighing in on a computer issue. George W. Bush has said he opposes breaking up Microsoft as part of the U.S. government's anti-trust suit. Stay tuned. If one has spoken up, the others will soon.

The Beanie Baby bungler burglars out of Philly have been given their dues. Officials say that Samuel Miletto, the official mastermind behind the AOL-based scam, took in around $5000 by offering "discontinued" babies. Well, that five grand could mean 105 years in prison as pay back for 105 counts of wire fraud. Ouch.

Once again, a cracker has used a portal found in Microsoft software and grabbed upwards of 25,000 credit card numbers from eight smaller e-commerce sites. To make matters worst, the cracker who calls him (or her) self Curador taunted Bill Gates and those whose card numbers he grabbed on a Web site set up and paid for with one of the stolen credit card numbers. Curador wrote: "I would like to thank the nice people at ALL the Sites I Cracked for having left their entire sales database, readable & writeable for any one who bothered to check their site out."

Alta-Vista has just undertaken an opt-on policy regarding their user's data. Now, a user must click a checkbox in order to allow personal data to be used in order to produce personalized banner ads. Good idea.

Now onto today's topic...

The numbers have been released.

The U.S. government finally decided to include e-commerce in their surveys of the American economy. In the fourth quarter of 1999, the Web accounted for $5.3 billion (that's with a "B") dollars in retail sales. That came out to only 6% of the economy.

Although six percent may not seem like a lot at first, it's a true indicator of the world that is to come. Analysts claim that 6% is a doubling of the year before. Follow the logic. Six will become 12, will become 24, etc., etc., etc. This is just the beginning of it all.

Of course, that concept is not lost on those who are already major players in the e-commerce business. Big player cyber-companies are not only making a grab for more and more customers, they also want to make a grab for the process itself.

The thinking is that if a company can patent a method of doing business, then all those who follow will need to ante up every time that method of doing business is undertaken.

I told this concept to my students and they looked at me like I had grown a second head. They thought I was joking. "Patent a way of doing business?" one young lady said. "You mean a patent on using a box to deliver things or accepting green pieces of paper in exchange for product?"

I was actually impressed with her snide delivery.

Ah, but yet, she's not so far off of the truth. You may remember a Goodies to Go! Newsletter not too long ago that told the tale of's lawsuit against Barnes and Nobel Booksellers. Amazon had patented something they called a "one-click" technology where consumers familiar to Amazon could click one button and all of their demographics and credit card information could be submitted with one click. The consumer didn't have to fill in all of their address and card information every time they wanted to buy something.

That's a good idea, right? It certainly isn't revolutionary, but it's a good idea. Barnes and Nobel certainly thought so. They offered something similar and got sued. The outcome is still pending.

What do you think of that? Is the one-click technology (I feel silly calling it that actually - it's just database-driven check out procedure) really that revolutionary of an idea that it deserves a patent? I don't think so, but apparently the U.S. government did. They granted the patent.

So, now what? Only Amazon can use the on-click technology? No, no! Amazon wants everyone to use the one-click deal. They want it used all over the net.

Of course, they want a penny or two every time it's used too.

See? By getting into the e-commerce game early and patenting a part of the process, it's possible to make money off of how the process works. Amazing.

Now Amazon is at it again. They have now been granted a patent on affiliate programs. You may not have heard of affiliate programs before, but the world of Web business sure has.

An affiliate program is a deal between two (or many) e-commerce sites where they actually share users. The programs are set up so that visitors to one site help to drive customers to another site. The simplest form of the program is a banner exchange where as two sites trade advertising banners.

Of course, it is far more complicated that trading banners at the e-commerce level. Plus, it's successful. Tom Wyman of J.P. Morgan claims that affiliate programs account for up to 20% of all e-commerce sales across sites. That's great.

The problem is that now Amazon owns the patent on the process. That means that, if Amazon enforces the patent - which I believe they will, every time sites set up an affiliate program - Amazon gets a fee for the privilege.

If your brain works like mine, the first thing you thought was that you cannot patent a concept. There must be as many affiliate program methods as there are affiliate programs. Surely cannot own a piece of every single one.

They do, and don't call me Shirley.

This is a bad patent. It is way too broad and covers too much ground. It gives too much power and say over too many events. But what are we to do?

Well, the site has called for a boycott of for one. It's a nice gesture, but it won't have a tremendous impact past some bad publicity. This patent brew-ha-ha, I don't think really interests the end consumer. He or she wants cheap books delivered to their door. If someone else has to pay a penny to run the business, I don't know that it bothers the end consumer.

No, the real solution is first to hope that Amazon doesn't enforce the patent. The remainder of the e-commerce world is bringing a good deal of heat onto Amazon. I would hope that that would be enough to back Amazon off of a lawsuit, but I doubt it. They've already protected their hold on the on-click technology.

Second, we need to get people at the U.S. patent office that understand that e-commerce is a fledgling thing and overly broad patents will do far more harm than good. Patents should only be granted on specific processes.

If you would like to patent a one-click technology, do it, but you only get the patent on how you did it. If another company finds a different method, then you cannot hold them to your patent.

That will not cut into any profits made by the company. Believe you me, there will be sites that will be more than willing to buy and pay a licensing fee for the one-click technology Amazon invented. Many will feel it's worth the money to buy a system that works.

But if I can use the idea and do it another way, then you shouldn't be able to hold me to the patent. The way Amazon's patent is written is way too broad. That's the problem.

Now we'll start to see lawsuits over affiliate programs. That's not good. Now is the time to stop, look at what has happened and learn from the mistakes made.

No more broad patents. Patent the process, not the idea.


That's that. Thanks for reading.

Joe Burns, Ph.D.

And Remember: Do you know the name: Elwood Edwards? You may not know the name, but you sure know the voice. He's the voice that proclaims "You've got Mail" to all our friends at AOL.

Archive Home Page.

Make a Comment

Loading Comments...

  • Web Development Newsletter Signup

    Invalid email
    You have successfuly registered to our newsletter.
Thanks for your registration, follow us on our social networks to keep up-to-date