Patent wars are nothing new. Every day, tech companies battle in and out of court over patented innovations.
Take high profile cases like Oracle v. Google, for example, or recent cases like Microsoft's battle to uphold its mapping patent. But this week, patent infringement hit close to home with the case, BrightEdge Technologies, Inc. v. Searchmetrics, GmbH. et. al. and their respective technologies.
The complaint, filed by BrightEdge, states that Germany-headquartered Searchmetrics is infringing on four of BrightEdge's patents by "manufacturing, using, offering for sale, and/or selling its SEO software platform in the United States, and/or importing its SEO software platform into the United States."
The BrightEdge patents in question include the following (warning: dry legalese follows):
- 8,577,863: "Correlating web page visits and conversions with external references" by Yu et. al. Prosecuted by Baker Botts L.L.P.. Includes 7 claims (1 indep.). Was application 13/369,916. Granted 11/5/2013.
- 8,478,700: "Opportunity identification and forecasting for search engine optimization" by Yu et. al. Prosecuted by Maschoff Brennan. Includes 15 claims (2 indep.). Was application 12/854,644. Granted 7/2/2013.
- 8,478,746: "Operationalizing search engine optimization" by Yu et. al. Prosecuted by Maschoff Brennan. Includes 20 claims (3 indep.). Was application 13/368,859. Granted 7/2/2013.
- 8,135,706: "Operationalizing search engine optimization" by Yu et. al. Prosecuted by Maschoff Gilmore & Israelsen. Includes 22 claims (2 indep.). Was application 12/855,668. Granted 3/13/2012.
It's unclear exactly which areas of technology at Searchmetrics are in question, but the complaint states Searchmetrics competes with BrightEdge with its "Searchmetrics Essentials" and "Searchmetrics Suite" products.
Dennis Goedegebuure, head of SEO at Airbnb, said while he's neither a patent expert nor a lawyer, "the patents BrightEdge have been granted are not really unique, and probably have been built on prior art from other companies."
He further explained using an example.
"The system described in the patents was widely used when I was working at eBay, and I actually presented a similar system, on multiple conferences in 2011 and 2012. A short write up of one of those presentations can be found here," Goedegebuure said.
"That system was built in 2009, where we built the strategy starting in 2008, far before the patents by BrightEdge were submitted. We would check the 'share of voice' of any eBay page ranking for a keyword, and compare our position with the competition on multiple factors, backlinks and on-page factors; after which, we would be able to estimate what would be needed to push those eBay pages upwards in the rankings."
He concluded that he knew of "a dozen of companies that used these kind of techniques at the time, which was all before the timing of these patents being submitted."
Goedegebuure represents just one viewpoint of many in the controversy surrounding patents in this space. But before we talk more controversy, let's take a look at the reason why software companies file for patents in the first place.
"A software company can benefit from patents in the same way that any other innovative company might," said Edmund Walsh, co-chair, post-grant proceedings group at Wolf, Greenfield and Sacks, P.C. "Developing new technology frequently entails a significant investment, and patents help the people who make that investment get rewarded for it."
Walsh said patents reward these type of innovators in many ways, such as "letting them sell their product at a higher price, giving them something to trade with development partners with needed technology or making investors or acquirers feel comfortable enough in a business that they will invest in it or pay more for it."
Dr. Cory Plock, president and CEO of Prolifogy Inc., a software development, consulting and advisory firm, clarified how patents in the software world work.
"Software companies seek patent protection for certain specific parts of a software application that they consider novel. The software itself is not what is patented, but rather the methods or processes the software might execute when running, or physical devices that might perform the execution of the methods or processes."
Plock said patents in this space would "make a software company more inclined to spend time, money, and resources to foster new ideas into marketable software products without the fear that the fruits of their investment will be ripped off and used by competitors."
Some companies may take out patents simply to protect themselves from so-called "patent trolls" – those non-practicing entities that seek to enforce the patents they hold.
"My company invests millions of dollars every year on software product development," said Larry Kim, founder and CTO of WordStream. "And over the years, we've also invested a few hundred thousand dollars on Intellectual Property – basically filing software patents for key unique and differentiating elements of our PPC management platform, like our PPC Grader.
"I hate spending limited resources on stuff that doesn't directly drive customer adoption or satisfaction. So why do we do it? It's primarily meant to be more of defensive move to protect us from the patent trolls out there," Kim said. "Also the venture capital investors seem to view it as a box to check."
Why the Controversy?
Patents in the tech industry get a lot of heat. Plock said it's because there are many different viewpoints.
"For example, there are some who believe software and mathematics are one in the same," Plock said. "In much the same way as nobody can own the number 5, for example, there would be similarly no concept of software ownership according to this viewpoint."
Plock said there's another perspective in which software source code written in programming language is a form of expression protected by free speech. "According to this view, it would not be possible to write an ‘illegal' software application (such as one that would infringe a patent)."
Walsh said that while the patent system is intended to promote beneficial behaviors, "the system isn't perfect." Some of the controversy surrounding patents includes scenarios like patents being awarded to people who did not really innovate, or sold to people who might "abuse the threat of bringing a patent suit to collect settlements to which they are not entitled," he said.
Switching gears back to the opinions being expressed within the search marketing industry on this case, many have become vocal – especially since marketers know and use both BrightEdge and Searchmetrics in their day-to-day marketing.
"I would like to see companies compete on feature enhancements, price, and service, rather than compete with lawyers," said Goedegebuure.
Kim said he sees both sides of the patent issue, since he, himself, owns patents.
"On one hand, I view the expense as unnecessary overhead for a purely hypothetical issue, but on the other hand I can see how it could be disappointing if a company blatantly copied your intellectual property that you worked on for many years to develop. But even then, it would cost millions more in legal expenses and take years to prosecute, so chances are if you're threatening to sue, you're really just waving around a big stick and hoping to settle out of court. For now, this is how the system is, so I just roll with it, but overall I think the patent system particularly for software is pretty messed up."
Goedegebuure added that the way patent lawyers describe an invention is so broad, "you almost cannot understand what it is about." He said he filed a patent himself when he was at eBay, and "would challenge anybody to tell me what the invention is all about."
Remember when Business Wire was awarded a patent that covered press release SEO tactics? This is another prime example of where patents – and patent language – can be extremely confusing.
When the language is broad, said Goedegebuure, enforcing these types of patents "will give anybody working on SEO a very limited choice in which SEO system to work with. Companies being protected by patents could raise pricing, which will only allow large companies with budgets to be able to pay for such systems."
So, How do Patents Hold Up in Court?
In the case of BrightEdge v. Searchmetrics, for now, it's in the beginning stages as a complaint. A complaint is a way to start a lawsuit.
"To sue someone, you have to give them notice of what you think they did wrong and what you think you are entitled to recover because of it," said Walsh.
And to do this, all you need is a reasonable basis for making the allegations. Hard evidence doesn't need to exist at this point, because "the parties will develop evidence as part of the litigation process," said Walsh. "However, they have to believe that their patent is infringed and, if they don't have evidence of that, that that they will be able to develop that evidence during the litigation process."
In the documentation, BrightEdge is demanding a trial by jury on all the issues that are "so triable." Walsh said many patents are successfully enforced, sometimes for large sums.
"Depending on the size of the market covered by the patent, recovery in court could be millions of dollars or over a billion dollars. Though, not every suit results in an award of that magnitude.
Some patents, are found invalid. Others are found not to actually cover the product accused of infringement. In that case, there is no recovery. Additionally, the vast majority of patent cases settle on business terms that are not public," said Walsh.
When it comes to BrightEdge v. Searchmetrics in the battle of patent infringement, we're in a wait-and-see period. BrightEdge has indicated it doesn't comment on legal matters, while Searchmetrics told Search Engine Watch that it had not received any documents, nor had any legal department contacted them (as of March 6).
Searchmetrics also had this to say about the complaint from BrightEdge: "We neither have the need nor desire to copy their ideas or software, because Searchmetrics has been an innovator in the space since 2007 - with development beginning in 2005."
What's your take?