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Is the Web "contracting"?
The numbers show a bigger slice for the top sites -- but most of the pie remains in the hands of the little guys.
By Scott Rosenberg
[08/26/99]

Silicon Follies
Silicon Follies
Chapter 47: The contractor's contractor -- migrant labor on steroids
By Thomas Scoville
[08/25/99]

Books
Stalking Gates
In "The Plot to Get Bill Gates," Gary Rivlin provides a much-needed outsider's view of the Baron of Redmond -- and the rogues of Silicon Valley.
By Janelle Brown
[08/25/99]

Palestinian refugees get wired
What can the Internet bring to a culture that has been scattered across the world?
By Flore de Preneuf
[08/24/99]

We have computers. Why aren't we more productive?
Technology doesn't usually save companies time or money -- but in a competitive world, it often keeps them in business.
By Cate T. Corcoran
[08/23/99]

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One might hope that the answer is "only one," but in fact the right answer, or at any rate the historically correct answer, is more like three. While every schoolchild learns that Thomas Edison invented the light bulb, the history of the light bulb is fraught with more litigation than one would guess. As a point of fact, he fought two other inventors in the patent courts for years, ultimately winning more through perseverance than priority (it is almost certain that an Englishman, J.W. Swan, had come up with the idea ahead of Edison).

If you happen to recall, hazily, this encyclopedia tidbit of technological lore, it is likely to pop back into your mind as you read about Jay Walker. Walker is the Connecticut entrepreneur whom Forbes magazine in May called the "New Age Edison" -- comparing his intellectual property incubator, Walker Digital, to Edison's own invention factory. Nobody has been more assiduous in patenting Internet business ideas than Walker.

The first of these patented ideas that Walker has turned into a business is Priceline, the Web site that lets customers name the price they are willing to pay for everything from airline tickets to cars. That patent and the business built around it have already made Walker enormously wealthy -- Priceline is worth nearly $10 billion, and Walker's stock holdings are worth over $4 billion, if only on paper.

Walker is a pioneer in the game of staking a claim to intellectual property. He holds 18 patents on Internet business ideas and has about 250 more pending. This in itself makes him something of a controversial figure, because among the intellectual property cognoscenti "business process" patents and software patents are a very new knot in an otherwise well-worn fabric. From the moment that Priceline, with much hoopla, revealed its patented business, observers have been predicting that such patents, rather than fostering genuine new ideas, were more likely to result in litigation as companies tried to block each other's businesses.

Walker himself has been accused of patenting the merely obvious. Bill Gurley, then a high-profile securities analyst and now a venture capitalist, argued bluntly that seven months before Priceline launched, he'd outlined a business model almost identical to Priceline's in a Fortune magazine column. "How can an idea that so easily pops into the head of an Internet pundit be considered 'unobvious' to the general Internet practitioner?" wrote Gurley with evident sarcasm.

Now, Walker finds himself under attack in the courtroom. A San Francisco company called Marketel is suing Walker and Priceline, alleging that Walker stole its trade secrets. Meanwhile, Walker Digital is accumulating new patents, each seemingly broader than the last, that would theoretically give him ownership of the business models common in whole industries.

In looking closely at three of Walker's key patents, a pattern emerges. In two cases, the core Priceline patent and a patent for "expert based commerce," Walker's inventions sound remarkably similar to ideas whose existence Walker was aware of but whose inventors didn't bother to run to the patent office. In another, an almost stunningly broad patent for anonymous communication over a network, Net businesses were already acting on remarkably similar ideas not only before the time the patent was granted (that's a process that can take several years), but before Walker even applied for it.

Well, Edison didn't come up with all his inventions first, did he?

Next page | Just what did Walker know before starting Priceline?