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At an extraordinary 75-minute oral argument, a federal appeals court on Monday wrestled with the validity of e-commerce patents. The discussion in Amazon.com v. Barnesandnoble.com officially revolved around a technical issue — whether a Seattle judge had gone too far last December in stopping Barnesandnoble.com from using a single-click ordering system. But it was soon clear that the three-judge panel of the U.S. Court of Appeals for the Federal Circuit was itching to explore the broader Internet patent issue that has vexed intellectual property attorneys and e-commerce entrepreneurs alike. The Dec. 1, 1999, decision by U.S. District Judge Marsha Pechman was “an egregious error of law,” argued Jonathan Marshall, a Pennie & Edmonds partner representing Barnesandnoble.com. Marshall said Amazon.com had merely patented the last click in a long process of moves that customers must make to buy anything on the Internet. If that is upheld, he said, “everything would infringe.” “Maybe it’s invalid,” mused Judge Raymond Clevenger III, who nonetheless pressed Marshall hard to explain how his client had not infringed other sections of the Amazon.com patent. But even if the Federal Circuit panel sides with Amazon.com and upholds Pechman’s preliminary injunction, it’s unlikely to decide the merits of the patent dispute in this round of the case. The question of the Amazon.com patent’s validity is still open, with a trial before Pechman expected next year. The extended discussion Monday — the normal Federal Circuit argument lasts 30 minutes — frequently focused on counting the number of mouse clicks that a customer must make to buy a book. But when Amazon.com lawyer Lynn Pasahow took the podium, the judges — Clevenger, Arthur Gajarasa, and Richard Linn — also explored the difficult practical questions stemming from e-commerce patent fights. Clevenger used an anecdote to try to draw out the conversation. He noted that he had stopped at the gas station on his way to the court Monday morning. He paid by handing his credit card to the attendant. “The fella took just a single action with my credit card,” said Clevenger in his folksy Kansas drawl. “It was a swipe, and that’s your invention. “It’s pretty old art,” Clevenger suggested, referring to Barnesandnoble.com’s argument that it had obtained “prior art” showing the Amazon.com single-click system was not a new invention after all. “It wasn’t on the Web,” responded Pasahow, a partner at McCutchen, Doyle, Brown & Enersen. After a long colloquy on the subject, Pasahow said, “We’re missing the point of the one-click invention.” The invention pared down the steps that customers had to take when making a purchase on Amazon.com, Pasahow argued. The system also solved the problem of customers abandoning their electronic “shopping carts” in the middle of a transaction, he said. Marshall was at the podium for 30 minutes, and Pasahow spent 42 minutes in response. When Marshall rose for his rebuttal time, Clevenger gave him just three minutes. The judge asked, “Don’t you think the panel has its hands around this?”
E-Commerce: Reinventing the Law. October 2-13.

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