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Patent suit against Amazon dismissed

By Kevin Orland
Bloomberg News

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Amazon.com, Borders Group and other retailers have won dismissal of a lawsuit accusing them of impermissibly using patented technology that let them customize shopper visits to their Web sites.

Judge Richard Posner of the 7th U.S. Circuit Court of Appeals in Chicago said the plaintiff, Pinpoint, didn't have standing to sue because it didn't own the patents when the suit was filed in July 2003.

Posner, who granted Seattle-based Amazon's motion to dismiss the case, said the University of Pennsylvania, which sponsored the inventors' work, owned the patents at that time.

"The university has since assigned its patent rights to Pinpoint, but the assignment comes too late to confer standing," Posner wrote in the opinion, which allows Pinpoint to refile the claims.

Two of the inventors were professors at the university and helped develop the technology with the founders of Pinpoint, according to the opinion.

Investment in personalization technology is expected to reach $2.1 billion in 2006, from $500 million in 2001, according to Datamonitor, a marketing-research firm.

The technology is used mainly by telecommunications companies and entertainment firms to deliver targeted advertising to customers. The technology helps identify news, advertising and products a Web site user might be interested in based on previous visits to the site.

Pinpoint was seeking between $50 million and $165 million in damages, according to Peter Bensinger, a lawyer for the company.

Philip Beck, another attorney for closely held Pinpoint, which is based in Fort Worth, Texas, said the company hasn't decided how to proceed. The dismissal didn't deal with whether the patents were valid or were infringed, Beck said.
 
"It's a technical issue on when we obtained complete ownership of the patents," he said in an interview. "There were a bunch of factual issues, and the judge resolved them one way, and now we have to go back to square one."

Amazon had no comment on the dismissal, spokeswoman Patricia Smith said.

Amazon Web site

experiences trouble

Some customers had trouble reaching Amazon.com's Web site yesterday in what analysts described as probable technical difficulties for the world's largest online retailer during the crucial holiday selling season.

Amazon didn't immediately return a phone call seeking comment.

Probes by monitoring firm AlertSite.com, which checked Amazon's site four times hourly from seven U.S. locations, were able to reach the home page but often received error messages. That suggested an internal computer problem rather than an external hacking attack or unusually high customer traffic, said Ken Godskind, vice president of marketing for AlertSite.

While an outage at this time of year could be devastating for any retailer, "Amazon customers tend to be extremely loyal, so it's hard to tell what impact this might have," said Roopak Patel, a senior Internet analyst at Keynote Systems, which monitors performance of major e-commerce sites.

The Associated Press