A deal for Build.com to acquire web-only small appliances merchant Living Direct has been in active negotiation, sources tell Internet Retailer.
SpeedTrack filed the suit against such major e-retailers as Amazon.com and Overstock.com, claiming patent infringement. The company says its patent covers a particular kind of web site navigation that offers several ways of navigating to a product.
Some of the biggest names in online retailing are being sued over the way they guide visitors to products on their e-commerce sites.
SpeedTrack Inc. filed the patent infringement suit yesterday in the U.S. District Court for the Northern District of California. The 23 defendants include Amazon.com Inc., Overstock.com Inc., 1-800-Flowers.com Inc., BarnesandNoble.com Inc., OfficeMax Inc., Macy’s Inc., Best Buy Co., Dell Inc. and The Home Depot Inc. SpeedTrack has not specified the damages it is seeking.
The suit relates to a particular kind of guided navigation that associates each product with descriptive terms so that the consumer can find the product by searching in several ways. For example, if a pair of shoes are identified as blue and suede, the site can offer materials as a navigation option and then the colors available for that product. Or visitors could search first by color and then see available materials. This is different from a fixed hierarchy, such as shoes/materials/colors, that only offers a single path to an item, according to attorneys for SpeedTrack.
“SpeedTrack has done a lot of homework in terms of identifying people it believes are infringing its patent and using its technology for free and profiting off of it,” says Marc Morris of the law firm of Hennigan, Bennett & Dorman LLP, which is representing SpeedTrack. Morris says it is possible SpeedTrack would sue other online retailers that use a similar guided navigation system.
SpeedTrack previously filed a similar lawsuit against three manufacturers of Global Positioning System devices and Wal-Mart Stores Inc. The three GPS manufacturers settled, but Wal-Mart did not, and that case is still pending, Morris says.
In fact, Endeca Technologies Inc., which provides site search and navigation technology to Walmart.com, joined the Wal-Mart suit and has challenged the validity of SpeedTrack’s patents, Morris says. He says the U.S. Patent Office has agreed to reexamine the patents, but has not delivered an opinion on its validity.
At least one of the online retailers being sued in the latest case says it will put up a fight. “We are vigorous defendants of anything that comes in the nature of a patent troll suit, which is how we would characterize this,” says Marc Griffin, general counsel for Overstock.com. “They can expect the fight of their lives.”
The term “patent troll” refers to a company that exists only to pursue licenses or lawsuits related to patents, but Morris says SpeedTrack does not fit the mold. He says the company has used the patented technology to develop web site search and navigation technology, including a system called Criminal Information Management System, or CRIMES, used by many police agencies.
He says the principal developer of the patented technology, Jerzy Lewak is a theoretical physicist who remains a central figure in SpeedTrack, a company created about a decade ago to develop products based on Lewak’s inventions. Lewak was awarded the patent at issue in this lawsuit in 1996.
SpeedTrack contacted the online retailers named in the suit in December 2006, according to the suit. Morris says SpeedTrack hoped the retailers would license SpeedTrack’s technology, as the GPS manufacturers had done. “SpeedTrack is not a patent troll. It’s not looking for litigation. It would have preferred an amicable resolution,” Morris says.
The retailers named in the lawsuit are Amazon.com Inc., No. 1 in the Internet Retailer Top 500 Guide; Dell (No. 3); OfficeMax (No. 6); Best Buy Co. and Best Buy.com LLC (No. 10); Costco Wholesale Corp. (No. 14); Hewlett-Packard Co. (No. 16); Systemax Inc. (No. 21); Macy’s Inc. and Macys.com Inc. (No. 23); Overstock.com (No. 29); 1-800-Flowers.com (No. 31); Redcats USA (No. 34); Barnesandnoble.com LLC and BarnesandNoble.com Inc. (No. 41); The Home Depot (No. 43); Nike Inc. (No. 49); Recreational Equipment Inc. (No. 67); Northern Tool & Equipment Catalog Co. (No. 74); Value Vision International Inc., owner of ShopNBC.com (No. 87); Retail Convergence Inc., owner of SmartBargains.com (No. 101); J&R; Electronics Inc. (No. 103); and B&H; Foto & Electronics Corp. (No. 122).