February 9, 2001, 12:00 AM

Business Unusual

Whether you grumbled, yawned or crossed your fingers over the recent exploits of crackers, carders and thieves on the Internet, you have to admit that security has become the year’s sleeper issue. It’s time to wake up, if only because the potential cost in diminished public confidence is spread equally among Internet merchants.

Even though security experts doubt these acts of vandalism will slow the momentum of online shopping, the Internet industry needs to match this growth with responsibility. Surveys conducted since the hacks occurred show that consumers are worried about online security. Let’s not wait for a catastrophe to put better filters and firewalls in place.

It’s appalling, but not at all surprising, that the mischief makers want to prove how much they know about flaws in the architecture by crippling popular Web sites or selling stolen credit card numbers. Still, you can’t argue with the fact that it’s careless of merchants to store unencrypted credit card data on Web-facing servers. That’s not an oversight but a disregard of consumer trust.

Last month’s rash of denial of service attacks exposes other vulnerabilities more difficult to remedy. These incidents are not matters of oversight but of magnitude, thanks to software capable of turning a few keystrokes into a barrage of bogus requests. “It’s the equivalent of a company preparing for a snowstorm but getting hit with an earthquake,” one analyst told Internet Retailer (see page 8). Yet here, too, there’s work to do in fending off phony traffic jams. Our Tech Roundup on page 52 will help get you started.

The Internet really is today’s wild West, full of both opportunity and peril. Anyone with an idea, worthy or sinister, has fertile ground to test its potential for growth. So I’m sure the show of wits isn’t over from crackers who think they have something to prove.

The Web’s debates and controversies may be complicated by technology, yet every new industry has experienced similar cycles and growing pains. None of this changes the basic principles of good faith and clean competition. That’s a point our cover story makes in surveying the explosion of business-method patents-one-click shopping and other business techniques enabled by software.

Lawrence Lessig, a Harvard law professor well-known for his friend-of-the-court briefs in the Microsoft antitrust case, argues that one-click buying isn’t all that novel on the Web and questions Amazon’s patent on the technique. As this issue went to press, Amazon had succeeded in extending patent protection to the technology behind its affiliate programs. “The Internet is technology-pervasive by definition,” he says. “It’s all novel.” He worries that legal maneuvering will stifle innovation. Yet supporters of business-method patents say they’re necessary protection in the knowledge economy. “In the ephemeral world of the Net,” says attorney Kevin Rivette, “it pays to protect everything.”

But even Rivette wants to see these patent disputes worked out in Internet style-he imagines engineers dueling like gun slingers on Web bulletin boards. Now there’s a scene worthy of the wild West.

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