Once again, Zillow.com is making headlines. This time, however, it is because the company is the target of a lawsuit brought by LendingTree.com claiming that the online real estate marketplace used LendingTree’s patented formulas when it matched borrowers with lenders[1]. Zillow and three other companies are named in the legal complaint. LendingTree is seeking to recover “lost profits and other damages resulting from the defendants’ alleged patent infringements.”
According to the legal documents submitted as part of the lawsuit, LendingTree first noticed that Zillow had copied the patented process in 2008 and offered Zillow the opportunity to license the patent. A similar scenario took place with NexTag, another competitor also named in the suit, in 2005. Both companies declined to purchase the license but also refused to stop using the process in question.
LendingTree patented its particular processes in 2002 and 2003. Do you think that there should be a statute of limitations on this type of software, much as pharmaceutical companies have a limited period of exclusive rights to drug formulas?
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[1] http://www.dsnews.com/articles/lendingtree-sues-zillow-and-three-others-over-internet-loans-2010-09-10
If there is an active patent on anything, get permission to copy it and pay the fee to do so. If it’s worth stealing, it must be worth paying for.
As has been well documented, many people think that the Patent process for business processes and software has gone off the rails in recent years. So, it is probable that Zillow and others decided to wait and see… and then litigate on these to contest their strength. The requirement that a technique be “non-obvious” in order to qualify for patenting was really loosened to the point of sloppiness in recent years. Just look at some of the patents that have tripped up various companies, such as the variations of patents regarding “click here to order” buttons and “the next steps to place an order” on websites!
The real question should be if it is proper to grant patent on processes. I used to work in the pharmaceutical industry for many years and this was a huge point of contention. Companies LOVE to patent processes so they can extend as much as they can the live of their product before generics become available. The problem is that many times there was no real improvement over the previous product, but companies still got the new patent nevertheless, adding as much as five to seven years to the exclusive marketing period (and bringing in many billions of additional dollars). When it comes to processes in software and online companies the same problem arises. Has the company actually created a unique product that requires protection? I don’t know the answer, but it is worth taking a look at it. What is even more ironic is that many times the companies claiming that their patents have been violated got their products as a “copy” of another product first even though they made some changes to them (e.g. iPod). If I can patent a process so easily, then I will patent my killer omelette recipe!!!