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Opinion Editorials

New trend in technology- sue for patent infringement, impede progress

Patent trolling is nothing new, but it is crossing into new territory where innovation is actually being stifled in the name of the almighty dollar.

Patent trolling is nothing new, but it is crossing into new territory where innovation is actually being stifled in the name of the almighty dollar.

This is nothing new

For those of you focused on the business of selling real estate or any other small business, you may not know that patent infringement is part of every day life in the legal system. You may not know that your broker has been sued for patent infringement dozens of times (Keller Williams, RE/MAX, etc.) as a natural part of business and it has nothing to do with real estate but everything to do with the technology our industry is using and developing.

Innovation is escalating at a break neck pace, but from time to time, a patent lawsuit stifles not only the very practice of modern real estate, but any innovation and strikes fear in the hearts of real estate companies, just so patent trolls can make a buck (please take a second to read the link about patent trolls, it will speed this argument up considerably).

It is to be expected, however, that when a market is down and suffering that lawsuits will increase – it is a true sign of market conditions. Therefore, this is just a drop in the bucket… we will see more of these cases popping up as we predicted in the Genius30 awards as it is an inevitability in any industry.

Enter case number one: mobile real estate search

In a board meeting for a major real estate marketing and web development firm, we listened as they pitched their next move which would be a “social media widget” they could resell because they were so terrified of making a move that involved real estate search that they were at a loss for how to expand their business.

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Why were they so scared? The “Boopsie lawsuit” wherein Smarter Agent sues everyone from Zillow to ZipRealty, claiming they own the patent on “mobile real estate search” and everyone that has an app that allows consumers to search for real estate on their phone is violating their trademark. If you live in 2011 and are a real estate professional, especially a broker, you can’t allow your consumers to search real estate unless it’s done through their platform according to their suit.

Case number two: real estate search

We cover the real estate search industry on nearly a daily basis as it has so many moving parts and is growing and innovating at an amazing pace. There is a wrench in the system, however, known as the “REAL lawsuit” which claims a 1991 patent for real estate search (more specifically they claim they own the process of creating a database of properties for sale, mapping results and offering zoom). Sounds like every single real estate website on the planet, no? Even Google.

The suit is broader and goes after many types of entities from Alain Pinel Realtors, Keller Williams, Move Inc., Georgia MLS, NAR, RE/MAX Gold, Pulte, Ryland and more. The National Association of Home Builders teamed up with the National Association of Realtors and Move, Inc. this week winning a countersuit to the claim and now REAL was remanded to further proceedings where they will go back to a lower court and explain what their patent covers more specifically.

A call for patent reform

The above cases are oversimplified for expediency, there are years worth of legal documents in both events. I’m not a lawyer, I don’t even play one on television, and none of this is legal advice (only my opinion, but I know that patent trolling is real and even when patent suits are legitimate, it seems that protection of a tech function for one company can stifle and freeze an entire industry. Some lawsuits (maybe even one of the above) go above and beyond to file their claims in area that are patent friendly, hundreds of miles from their headquarters, just to pad their claims while other companies are truly protecting a unique patent claim.

Can someone really own real estate search or mobile real estate search or mapping or hell, even “real estate?” Technically, yes. And technically, patent lawyers will pump this system for every penny it’s worth. And will Realtors suffer at the hands of these lawsuits? More importantly, will consumers? If innovation is frozen, yes. Patent reform must be taken seriously and as a Realtor, it seems like a far away topic to rally behind, but it absolutely is not (unless you don’t want consumers to be able to search for real estate anywhere besides your printed MLS book in your office one can only access via time machine).

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Patent lawsuits and their impact on technology

Other reading to help you form a more rounded opinion on patent issues in today’s tech world:

  1. Fred Wilson, famed investor, outlines the Supreme Court ruling in the Bilski case, calls for patent reform and notes that software and tech patents are mostly a negative for startups.
  2. NTP sues Apple, Google, Microsoft, LG, HTC etc. claiming they own the patent on electronic mail over wireless communication systems. In other words, you can’t see email on your phone unless NTP says so.
  3. XPRT sues eBay, PayPal, claiming they confided electronic payment ideas with them years ago and that eBay’s filing for a patent acknowledges the values of those ideas. There’s a possible element of underdog here, but one can’t be sure.
  4. Patent trolling may continue despite the University of Texas report revealing that it does not have a good return.
  5. TechCrunch covers why patents hold back innovation not only for our tech toys but for important humanitarian projects like desalination of water.
  6. The Guardian shows all of the dozens of smartphone lawsuits each company has filed against the other and a more descriptive infographic shows what they’re suing for.
  7. TechRadium sues Twitter for mass messaging system (although I recall using AIM in high school, long before Twitter was thought up and possibly before TechRadium’s IRIS tech was developed, but who knows?).
  8. Apple sues HTC over more than 20 infringements of interface patents

The list goes on and on. Contact your local politician and tell them strongly that you are against patent trolling or that you support patent protection, but either way, we encourage reform of an easily abused system. This issue is not going away, it’s just getting warmed up.

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

21 Comments

21 Comments

  1. Jason

    March 25, 2011 at 1:03 pm

    Thanks for the post. Patent technologies is not a new phenomenon but as you suggested is intensified with shifts in the market economy. Seeking legal counsel prior to patenting or using anything that might be questionable is a good idea. If anyone is in Michigan, there’s a great law firm that specializes in property law (intellectual, patent,etc.) and can be a great resource. Check them out here:www.sikoralaw.com

    Jason

  2. Rick Thomas

    March 28, 2011 at 4:36 am

    Your assertion of the ‘Boopsie lawsuit’ is not entirely correct the way I understand it. Smarter Agent is claiming they have a patent on the geographic location of a user, not search in general on a mobile device. That is a big difference.
    In other words, if I’m standing on the corner of 4th and Main, I can by my geographic position, search what is close to me.
    That in a nutshell I believe is their claim. If you take the geographic location of the search out of the application, then you should be in the clear. If they are asserting that any search on a mobile device falls under the patent, then the pdf you link clearly doesn’t make the case in my opinion. But like you said, I’m not a lawyer, and I don’t play one on the weekends either.

    • Lani Rosales

      March 28, 2011 at 1:05 pm

      Rick, it’s tricky because as we’re all saying, we’re not lawyers, but most real estate search apps ping your geographic location, especially those utilizing augmented reality (of which the number is growing). I’ve heard several interpretations, but the point remains that several innovators feel stifled by the lawsuit and are afraid to improve their offering in the event they get sued.

  3. Jim Colburn

    April 18, 2011 at 5:58 pm

    Lani,

    You are absolutely right. Rent.com recently came out with their iPhone and Android apps, and surprise surprise, it does not include GPS-based searching. I bet you anything that this lawsuit has everything to do with their decision to not include GPS-based searching.

    • Lani Rosales

      April 18, 2011 at 7:06 pm

      Jim, I have a feeling it will impact several technologies in under the radar ways. That's a great case study, thanks for pointing them out!

    • Maciej

      July 13, 2011 at 2:40 pm

      Thanks for an interesting tip. It is even more interesting for me since I have developed a technology to provide those location based services without actually violating any of those patents. The technology actually never submits any location information to the server to get the nearby listings, a step on which, I believe, most (if not all) location based software is based on. This actually makes things interesting. 🙂

    • Erik Goldhar

      February 22, 2012 at 12:27 am

      Jim – we just re-launched Clikbrix (probably the first and certainly one of the most successful mobile solutions for Realtors and Brokers) and held off in including GPS search as one of our features. We need to see how this plays out.

      If you ask me patents should protect inventors. Smarter Agent did not invent Databases and they did not invent GPS. They combined the two and called it an invention.

      Before this patent there was a patent that protected serving up restaurant locations based on the GPS of the user. The process existed (and therefore legal prior art perhaps) and all SA did was change the content being served up not the process or the invention.

      Just my thoughts. Even without search Clikbrix still offers the best mobile solution for Realtors in the market today and, oh by the way, we are FREE.

      Great post Lani – Thank you!

      Erik Goldhar
      Clikbrix

  4. Berry Enloe

    August 26, 2011 at 10:39 pm

    I am the Cofounder of REcake.com and can speak to this directly.
    We chose specifically not to violate this "patent"- yes it holds us up tremendously. As one franchise CEO described it to me, "It's like they patented breathing".
    And Rick is right- SA has several patents- all relating to real estate search "based on location of the mobile device"
    I am surprised that the USPTO has not been presented an Ex-Parte appeal of these patents. You can be sure we will do that as soon as we find it relevant.

    In the mean time we are very close to figuring out a way to do location bases search that does not violate any SA patent.

    So to Lani's point- yes, the SA patents are 100% stifling innovation.

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