The Latest Software Patent Outrage

This page was written in 1996.

E-Data Systems is making a splash through its aggressive enforcement of a patent they claim covers all forms of "on-demand electronic distribution" -- using a "system and method whereby products composed of digital data are purchased and embedded electronically at a point of sale location from a host computer" [E-Data's FAQ].

As such, the E-Data patent covers the electronic distribution of software, fonts, images, music, video, news, sheet music and other forms of information. Here's the patent abstract:


SYSTEM FOR REPRODUCING INFORMATION IN A MATERIAL OBJECT
AT A POINT OF SALE LOCATION

U.S. Patent No. 4,528,643

ABSTRACT
The present invention contemplates a system for reproducing information in material objects at a point of sale location wherein the information to be reproduced is provided at the point of sale location from a location remote with respect to the point of sale location, an owner authorization code is provided to the point of sale location in reponse to receiving a request code from the point of sale location requesting to reproducing predetermined information in a material object, and the predetermined information is reproduced in a material object at the point of sale location in response to receiving the owner authorization code.
[Full text of patent]

To date, E-Data has sued over 40 companies, although they have yet to win in court (to our knowledge). Several companies, including Adobe, First Virtual, IBM and VocalTec have settled with E-Data, presumably through licensing.

E-Data is targeting "companies engaged in the following activities may be legally determined to be contributory infringers:

  • CONTENT PROVIDERS Owners and sellers of products which are sold and delivered electronically by the provider or through a distribution network owned by another within the scope of at least one of the E-dataSystems(tm) patent claims.
  • RESELLERS Distributors who provide a distribution network for content providers to sell products within the scope of at least one of the E-dataSystems(tm) patent claims.
  • SERVICE PROVIDERS for electronic distribution applicactions Providers of various services, i.e., encryption, locking, unlocking, metering, etc., who provide applications for content providers and/or resellers within the scope of at least one of the E-dataSystems(tm) patent claims."
  • In a truly magnanimous gesture, E-Data is offering an "Amensty Program" from June 1, 1996 through August 31, 1996. During this period, "low cost sliding scale licensing plans are available. Additionally, [E-Data] will forgive potential past infringement damages for new licenses."

    A brief history of E-Data's activities can be found in their own press releases.

    Other Sources

  • The Netly News
  • Chronology of E-Data's Enforcement of the Patent
  • Info Law Alert's Background Story on the E-Data patent: "Three employees and a patent"
  • NEW! (as of June 27th): Info Law Alert Story on E-Data's Day in Court
  • Oppedahl & Larson Web site: Overview of the pending suits, info for defendants and their lawyers, and a copy of the judge's June 25th order in one of them -- Interactive Gift Express, Inc. v. Compuserve, Inc. et al.
  • What You Can Do

  • Watch this page. We will update as more information is available.

  • Last updated: Thu Jul 4 22:49:37 EDT 1996. HTML by rh@lpf.org