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Important IPR trend.
Posted on Thu, Dec. 04, 2003
Social networking a tech battleground
By Matt Marshall
Mercury News
Patent 6,175,831 was barely on the market before Reid Hoffman jumped on it.
He responded within 24 hours. And his small start-up, LinkedIn, beat out 20 other bidders -- including online giant Yahoo -- to one of the hottest patents in one of the hottest new industries: online social networking.
The patent fight reflects the sharp rise of interest in social networking -- a technology that leverages social circles to improve business and dating. It also comes at a time when regulators are taking a harder line on intellectual property cases and raises questions about how far the patent can shape the future of the young industry.
If the patent is enforced, Hoffman and ally Mark Pincus ``are going to be richer than Bill Gates in a couple of years,'' said Antony Brydon, chief executive of Visible Path, a competitor.
Mountain View start-up LinkedIn helps users map out their professional relationships online, showing how they are linked up with others -- helping them find jobs or employees. Usage of Hoffman's site and others doing similar things -- including Friendster.com, for the world of dating, and Tribe Networks for online classifieds -- has skyrocketed.
So much so that companies with much larger resources, like Microsoft, Monster, AOL, Yahoo and InterActiveCorp's Evite, are all scrambling to enter the sector -- or at least seriously considering it.
Which is where the need for patent protection comes in.
Hoffman bought the patent in September for $700,000 from YouthStream Media Networks, which owned now-defunct Six Degrees. He shared the cost with Pincus, chief executive of Tribe. (Disclosure: The Mercury News is owned by Knight Ridder, which is an investor in Tribe.net.) Yahoo, which also bid on the patent, did not respond to a request for comment.
Hoffman said he made the move ``for protection'' against a bigger player that might grab the patent, kill innovation and stain the industry with spam-like tactics that turned users off.
He wants to use the patent to build a ``friendly coalition'' of companies, forcing licensees to abide by user-friendly practices, he said.
Examples include giving users control over their data and privacy, allowing them to design their own profiles and delete personal information.
But so far, the coalition excludes perhaps the most prominent start-up in the sector -- Friendster. And the exclusion raises eyebrows because both Hoffman and Pincus have a 2.5 percent onwership stake in Friendster, and a friendship with Chief Executive Jonathan Abrams.
Hoffman and Pincus apparently feared Friendster's powerful backers, Kleiner Perkins Caufield & Byers and Benchmark, might not think along similar lines. Friendster wouldn't comment.
But if one of the big players eyeing the social networking sector wanted to intrude, the value of the patent in helping fend them off is questionable. It would take years and millions of dollars for a small start-up like LinkedIn to litigate against a big player, according to patent attorneys and others familiar with Internet claims.
Patent attorneys, including Andrew Katz, of Fox Rothschild, and Daniel Golub, of Morgan Lewis & Bockius, agreed companies like Monster, even if they do infringe on the patent, would be able to make right by paying fees. Courts are unlikely to force companies to cease from participating in the sector.
Monster last month launched a networking service called Monster Networking, which seeks to help people exchange information about jobs or goals, as a way to re-engage its 40 million members. Spokesman Kevin Mullins wouldn't comment on whether Monster has a patent, but said: ``We're not infringing.''
The amount of turf covered by the patent is also open to question.
Hoffman says the patent does cover most companies in social networking -- they just might not know it. The patent covers all forms of online ``relationship confirmation,'' as pioneered by the early company Six Degrees, he said.
All companies in the relationship business -- from job referral sites, to human resources and customer relationships application vendors -- are going to acquire, partner or introduce their own version of social networking, Visible Path's Brydon agreed. But his company's technology operates differently, using algorithms to assess the strength of relationships, he says -- so he doesn't feel threatened by the patent. Still, he concedes that he hasn't talked with a patent attorney in over a year.
Other companies, including professional-networking company Spoke and dating company Tickle, are taking similar approaches, acknowledging the patent may be important, but that it is not directly relevant to their businesses. Spoke has filed for 15 patents and is filing at a rate of one per month, says CEO Ben Smith.
Attorneys said extensive looks would be needed before concluding whether these and others -- like Microsoft's Wallop initiative, a tool that incorporates blogging and social networking, and Evite's new online community invitation service -- infringe on Hoffman's patent.
The patent issue has attracted greater attention since the University of California and affiliated company, Eolas, won a $521 million suit against Microsoft that may force changes in Microsoft's Internet Explorer, a case that is being reconsidered.
In particular, there's been renewed focus on patents having to do with business ``methods'' on the Internet, according to Steve Durant, a San Francisco patent attorney with Morrison & Foerster.
Social networking a tech battleground
By Matt Marshall
Mercury News
Patent 6,175,831 was barely on the market before Reid Hoffman jumped on it.
He responded within 24 hours. And his small start-up, LinkedIn, beat out 20 other bidders -- including online giant Yahoo -- to one of the hottest patents in one of the hottest new industries: online social networking.
The patent fight reflects the sharp rise of interest in social networking -- a technology that leverages social circles to improve business and dating. It also comes at a time when regulators are taking a harder line on intellectual property cases and raises questions about how far the patent can shape the future of the young industry.
If the patent is enforced, Hoffman and ally Mark Pincus ``are going to be richer than Bill Gates in a couple of years,'' said Antony Brydon, chief executive of Visible Path, a competitor.
Mountain View start-up LinkedIn helps users map out their professional relationships online, showing how they are linked up with others -- helping them find jobs or employees. Usage of Hoffman's site and others doing similar things -- including Friendster.com, for the world of dating, and Tribe Networks for online classifieds -- has skyrocketed.
So much so that companies with much larger resources, like Microsoft, Monster, AOL, Yahoo and InterActiveCorp's Evite, are all scrambling to enter the sector -- or at least seriously considering it.
Which is where the need for patent protection comes in.
Hoffman bought the patent in September for $700,000 from YouthStream Media Networks, which owned now-defunct Six Degrees. He shared the cost with Pincus, chief executive of Tribe. (Disclosure: The Mercury News is owned by Knight Ridder, which is an investor in Tribe.net.) Yahoo, which also bid on the patent, did not respond to a request for comment.
Hoffman said he made the move ``for protection'' against a bigger player that might grab the patent, kill innovation and stain the industry with spam-like tactics that turned users off.
He wants to use the patent to build a ``friendly coalition'' of companies, forcing licensees to abide by user-friendly practices, he said.
Examples include giving users control over their data and privacy, allowing them to design their own profiles and delete personal information.
But so far, the coalition excludes perhaps the most prominent start-up in the sector -- Friendster. And the exclusion raises eyebrows because both Hoffman and Pincus have a 2.5 percent onwership stake in Friendster, and a friendship with Chief Executive Jonathan Abrams.
Hoffman and Pincus apparently feared Friendster's powerful backers, Kleiner Perkins Caufield & Byers and Benchmark, might not think along similar lines. Friendster wouldn't comment.
But if one of the big players eyeing the social networking sector wanted to intrude, the value of the patent in helping fend them off is questionable. It would take years and millions of dollars for a small start-up like LinkedIn to litigate against a big player, according to patent attorneys and others familiar with Internet claims.
Patent attorneys, including Andrew Katz, of Fox Rothschild, and Daniel Golub, of Morgan Lewis & Bockius, agreed companies like Monster, even if they do infringe on the patent, would be able to make right by paying fees. Courts are unlikely to force companies to cease from participating in the sector.
Monster last month launched a networking service called Monster Networking, which seeks to help people exchange information about jobs or goals, as a way to re-engage its 40 million members. Spokesman Kevin Mullins wouldn't comment on whether Monster has a patent, but said: ``We're not infringing.''
The amount of turf covered by the patent is also open to question.
Hoffman says the patent does cover most companies in social networking -- they just might not know it. The patent covers all forms of online ``relationship confirmation,'' as pioneered by the early company Six Degrees, he said.
All companies in the relationship business -- from job referral sites, to human resources and customer relationships application vendors -- are going to acquire, partner or introduce their own version of social networking, Visible Path's Brydon agreed. But his company's technology operates differently, using algorithms to assess the strength of relationships, he says -- so he doesn't feel threatened by the patent. Still, he concedes that he hasn't talked with a patent attorney in over a year.
Other companies, including professional-networking company Spoke and dating company Tickle, are taking similar approaches, acknowledging the patent may be important, but that it is not directly relevant to their businesses. Spoke has filed for 15 patents and is filing at a rate of one per month, says CEO Ben Smith.
Attorneys said extensive looks would be needed before concluding whether these and others -- like Microsoft's Wallop initiative, a tool that incorporates blogging and social networking, and Evite's new online community invitation service -- infringe on Hoffman's patent.
The patent issue has attracted greater attention since the University of California and affiliated company, Eolas, won a $521 million suit against Microsoft that may force changes in Microsoft's Internet Explorer, a case that is being reconsidered.
In particular, there's been renewed focus on patents having to do with business ``methods'' on the Internet, according to Steve Durant, a San Francisco patent attorney with Morrison & Foerster.