Over the last eight years, the promise of the Internet has been
to level the playing field between small businesses and major
With a website, a small business could now sell their products
in the global market place without the overhead of additional
offices. To reap the benefits of e-commerce, one only needed
a website to attract and sell to customers, and one needed a
method to collect payments from their newly acquired customers.
Since the Internet is really just a network of computers, it
made perfect sense to merge electronic transfer of funds into
the website to simplify the purchasing process for the customer.
To date, the only real impediment to doing business online has
been the safety of the consumer’s financial data. In March of
2002, this all changed.
Enter the U.S. Trademark and Patents Office. Over the last few
years, the USTPO has shown extreme ignorance of new Internet
technologies. The USPTO has approved some of the most ludicrous
patents to be presented to them.
In 1997, AltaVista was granted a number of patents on search
engine technologies, even though search engine technology had
been in use as early as 1989.
In 1999, Amazon was given a patent for “one-click purchasing.”
In 2001, McAfee was granted patents for “Auto-Downloading of
Software / Software as a Service (SaaS)”, both of which had
been in use by others since before the creation of the global
In 2002, PanIP (Pangea Intellectual Properties L.L.C) of San
Diego, California entered the fray. They were granted two
patents: US Patent No 5,576,951 and US Patent No. 6,289,319.
The first patent covers the “use of graphical and textual
information on a video screen for the purposes of making a
sale.” The second covers “accepting information to conduct
automatic financial transactions via a telephone line &
Most Patent experts do not take these “junk patents” seriously
knowing full well that they will be overturned by the courts
and other processes set up to police the system. However, John
D. Trudel, the Founder and Managing Director of The Trudel
Group, pointed out that “this nonsense raises the cost of
business, since it takes years and costs $1 million or so
to break these junk patents.”
Herein lies the difference in PanIP’s strategy. Big corporations
who have deep pockets settle most “junk patents” in court.
Amazon took their initial challenge to their primary competitor,
BarnesandNoble.com. B&N had the resources to fight this “junk
patent”, so they fought.
PanIP has instead directed their attacks at small companies
who simply do not have the resources to fight! In fact, PanIP
has currently sued 50 small businesses with no end in sight.
Timothy Beere, the owner of DeBrand Fine Chocolates, had to
make a choice when he found himself in the crosshairs of PanIP.
Tim said, “I had to make a decision. Pay them the $5000 they
were asking for something I didn’t think they had a right to,
or Fight Back!” He went on to say, “It was clear that PanIP’s
strategy counted on the notion that few, if any, of the
businesses would be willing fight back. I was!”
Tim proceeded to contact the other companies that have been
sued by PanIP to build a consensus to stand up and fight.
Many have joined together in the fight starting the PanIP
Group Defense Fund, Inc.
In building his website (http://www.youmaybenext.com), Tim
said, “I knew if I could get this on the radar screen, people
would be as disgusted by it as I was.”