Legal: Ecommerce Owners Liable to Patent Trolls?

There has been a rise in the amount of patent claims against site operators and developers. The claims are based on”business method” and software patents for a variety of functions of a site, such as drop-down menus, site search, and other common functions. A number of these functions are in common use by many programmers, who don’t know the software or method they’re using is covered by a patent. A number of these patents are older, and programmers have furthered website development with their purposes to create new technologies, which are still covered by the patent. Additionally, searching patent registrations to ascertain whether your site is infringing in an issued patent is difficult, time consuming, and costly. “Patent trolls” are patent owners that take advantage of the problems of finding a patent, and lie in wait for somebody to use their technologies without realizing it’s covered by the patent owners rights under their patent.

By way of instance, Kelora Systems, LLC has recently been among the most competitive patent owners to attempt and enforce patent rights against ecommerce businesses based on a searching function that lots of websites are using. Kelora has chosen some powerful opponents, such as Target, eBay, Office Max, Amazon, Dell, Office Depot, Costco and a number of other large organizations. These organizations are working to invalidate Kelora’s patent about the search function. The suits are still pending, and Kelora continues to aggressively pursue its patent rights against both big and small ecommerce businesses.

How Do a Website Owners Protect Themselves?

Website programmers used to routinely indemnify their customers against infringement claims based on things they have developed for the customer. Many programmers are now moving away from these assurances due to the rash of patent claims, and their use of third party software in the creation of a website or some of a website. Thus, your first avenue of security is to ensure that your site developer is covering you for third party claims based on what the programmer has used in creating the site. A website owner should push to have as much covered as possible.

The programmer is typically in the best position to know what works the site will utilize, and where that applications came out. The development agreement should be read carefully to ascertain exactly what — if anything — is excluded from a programmer’s indemnification. If the developer doesn’t cover certain areas of the site, you need to be certain that you know why, and search for indemnification from a third party vendor if the technology being used is some kind of off-the-shelf software used under a license.

If you’re developing your own site, you need to create a list of any applications which you use for all purposes and the site itself. Unless you’re assessing your own code, the applications programs from each organization you are using should have a license agreement that discusses what they will indemnify in case you’re sued. You should also do a little research into the technology that’s being used to develop the site. There may be sure functions which have already been the subject of patent claims, and until those claims are settled, you need to avoid potentially stepping into a lawsuit. Currently, there are lots of large companies fighting software patents, taking the lead to attempt and invalidate these patents. However, it’s typically less costly that you avoid the technologies which are in questions, than to wind up fighting a patent litigation or taking the risk that the patent won’t be over turned.

Preventing Open Source

Additionally, whenever possible you should avoid open source versions of applications on your development. These versions of applications are usually not covered by indemnification provisions, and for that reason leave the site owner open to the threat that the programmers have used some kind of technology or method that’s covered by patents. Developers like to utilize opens source since the cost in less, but the absence of indemnification leaves the site owner open to the chance of the cost of a possible patent case. If you use opens source, you need to examine the role of the software and decide whether it’s worth the risk to keep using it.

Summary

If you take these steps to transfer the possibility of patent infringement liability for your programmer, it can help decrease the risk that you may need to bear the cost of fighting an infringement lawsuit. Additionally, making the programmer liable will get the programmer to be more cautious about what software is used and where the program comes from. In case you have concerns about your programmer agreements or license agreements, you should consult a lawyer to review the arrangements to ascertain what protections are given.