Software Patents and the Internet Video Store

How software patents will stifle business on the Net

If you are thinking of starting your own shop or store on the Internet, perhaps as a small sideline to sell local products more widely, you might like to know that there are some minor patent details you will need to take care of.

The screenshot below shows a typical small-scale online store; in this case, it is selling locally-produced videos. As you can see, quite a few of the things we take for granted in an online store (some of which are based on obvious analogues in the real world) are encumbered by patents - the numbers refer to the key below the image.

Patents normally cost a certain percentage of turnover (usually between 2% and 5%, with the percentage tending to go up if turnover is small). Some companies give discounts on the purchase of licenses to several different patents that they own. But the patents mentioned below are are not owned by the same company, so you can't expect to get volume discounts for your store. With luck and a good lawyer, however, you may find that you are able to keep your patent license costs down to around 60% of your turnover.

None of these patents are currently enforceable in some countries (eg India), so if you would like to avoid these "business costs" entirely, the solution is simple - become a citizen of one of these countries, and set up your store there.

  1. Secured SSL connections using RSA encryption: US4405829
  2. Secured SSL connections using encrypted sockets: US5657390
  3. Use of national orthography in domain names: EP1159820
  4. Tabbed browser windows: EP689133
  5. GIF files use patented LZW-compression: EP129439
  6. Pop-up browser vindows: EP0537100
  7. Displaying or downloading video over the web: EP0933892
  8. Displaying video in a browser window: US5838906
  9. Buying with one click: US5960411
  10. The widely-used MPEG4 video format, the most appropriate for a video download, is covered by more than 40 patents (eg DK638218)
  11. Use of e-commerce in providing services: DK/EP738446
  12. MP3 is a widely-used but patented sound format: DK287578
  13. The concept of a web-based shopping-basket or trolley: EP0784279
  14. Calculation of a correct gift adress from incomplete information: EP927945
  15. Digital signature in a graphic to show that the shop is approved for receiving VISA payments: EP0798657
  16. Credit card payments over the Internet: EP820620
  17. Affiliate links: US6029141
  18. Payment through a telecommunication network: EP084836
  19. Automated loans: EP715740

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