Eleven years after filing the patent application in October 1998, eBay has won a patent that grants it exclusive ownership over its online auction process model.
This is major for eBay and its competitors. eBay’s competitors will now have to change their process or risk being sued. eBay is already the top site in its field having 14.5 million auctions annually. Its nearest competitors only have 1.5 and 1.2 million annually.
However, lawsuits aren’t the real risk. At least, they’re not the immediate risk. Lawsuits take a long time and a lot of money to follow through.
The next logical step for eBay is not to sue but to license the model to sites that are already using it. Therefore, unlike a series of lawsuits, eBay has yet another revenue stream.
My prediction? The next step is that eBay will have the USPTO publish in its official gazette a notice this patent is available for licensing.
eBay’s competitors can file objections to this patent to modify or cancel it. However, only a small number of patents are ever canceled.
The patent is called “Computer-implement method and system for conducting auctions on the Internet“.
Here is an abstract of the process:
Methods and apparatus for a system for facilitating electronic commerce transactions with a first data storage location for holding information about an item for auction from a first participant in a data packet network, a verification process that verifies the user identification of the first participant in said data packet network, the verification process confirming a user identification before allowing the participant in said data packet network access to place information about an item for auction in the system, a display process for displaying information of the item for auction to a plurality of data packet network users, the display process displaying an advertisement with the item for auction to the plurality of data packet users, an auction process for receiving bids on the item for auction from at least one of said plurality of data packet network users, the auction process also verifying a user identification from said at least one of a plurality of data packet network users before allowing receipt of the bid and a notification process for notifying the plurality of data packet network participants that said bid was accepted by said system.
Here is a diagram of the process:
[via GoRumors]
From the process diagram, I do not see any substantial difference or addition to the normal, in-real-life process of auctioning an item at an auction house.
If I didn't know better, this might have been a joke diagrams poking fun by providing a computer scientists view of how an auction house works.
Prior art? Obvious, existing process? Surely?
*Jaw drops*
Well done, E-Bay, for getting a patent for the “real life” auction process. Unfortunately, the above process is not actually how E-Bay operates, which has a time limit and no concept of “3 calls”. How on earth did the patent department grant this? Have they actually ever used the E-Bay website? It's getting increasingly suspicious the number of ridiculous patents being granted (a certain fruity computer manufacturer springs to mind).
Trust me, this morning I was thinking “isn't this like Sotheby's getting a patent and then trying to license or prevent Christie's from doing the same thing?” Then I looked at the GoRumors blog, clicked on the link that lead to the US Patent and Trademark office and there it was.
Also, if you look into eBay's patent and lawsuit history, they're not strangers to it. They've been fighting off challenges for, at least, a decade on various issues connected to online auctions. Just Google this search “ebay uspto” and you'll get info on some of that history.
See my comment above, but, yeah, I initially felt the same. ;)
Wow, this is huge for ebay. As if they didn't already rule the internet auction world, now they're going to own it.
Congratulations for getting that patent as a done deal after eleven years! Quite an accomplishment.
Go for it and wishing you lots of success for the future.
MariettesBacktoBasics
Well, good for Ebay and quite an accomplishment after 11 years, but as for owning the online selling sites and being the only leader, not forever. Move on over Ebay 'cause there's another site that's been emerging. Not an auction site but Buy It Now and Best Offer and us buyers always need more than one site to go to. It's only good business that way!
Is this for the standard online auction process or for a Live Online Auction similar to what ubid uses? There is a difference. And what about grandfather clauses? madison
This is exactly like Sotheby's getting a patent for auctions when auctions have been going on for centuries. I don't believe ebay is the first auction site, but did become the biggest, and in this 'new' internet world… Its not like they designed the software for it.
Honestly, I”m not a patent law expert. Therefore, I'm not sure how strict they are regarding process. If it's different I think they can distinguish what they do, but don't quote me on that ;)