Mercata wins group-buying Net patent
But it doesn't look as though it will hurt competitors
Online US co-op group Mercata has won an attempt to patent its group-buying e-commerce system (US Patent Office number 6101484).
The patent concerns the way in which the company provides its real-time purchasing. Snappily called a "dynamic market equilibrium management system", it ties in the start time, end time, a range of minimum and maximum properties, price and individual preferences with an e-commerce system that distributes the goods when bought.
This is a fancy piece of software and so the company logically went for a patent. While the patent has been granted, an outstanding legal argument between Amazon.com and Barnes & Noble may yet undermine it. Amazon obtained an injunction against Barnes & Noble in December last year, claiming it had infringed its "1-click" ordering system. The system basically cut out all the steps of ordering, making a purchase possible with just one click. The case is still pending and the legality of the patent is bound to be called into question.
We pondered the effect this would have on other bulk buyers on the Internet. Mercata didn't bother to respond to our questions, and Priceline drew a distinction between its approach and Mercata's. Priceline works on an individual basis. Our attempts to discover how UK-based Letsbuyit.com may be affected were hampered by the fact that the patent is only enforceable in the US and that the company's PR firm is still in a bad mood with the Reg.
To add further confusion, the European Patents Office is still working out how to discern between plain software programs which are non-patentable and software that "achieves a technical effect" which is patentable.
And of course there was the interesting case where BT decided it had the patent on hyperlinks. Not many people have put money on that one being successful.
The issue of bulk-buying is a difficult one and has yet to prove itself as a viable business plan. It is clearly up in the air at the moment, but then you can't blame Mercata for trying to get in there and gain a legal foothold. Even if it has managed to patent the optimal way to run this kind of system, that doesn't mean it'll ever see a red cent in return. ®
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