June 24, 1996 2:30 PM PDT
Landmark copyright trial to begin
E-Data, a three-person outfit that runs an online gift shop, claims it owns a patent on electronic point-of-sale purchases. With this patent, originally granted in 1985 to computer scientist Charles C. Freeny and acquired by E-Data two years ago, the company now says it owns the means by which businesses electronically distribute digital data to a purchaser--software, video, fonts, text, audio--either online or via encrypted CD-ROM.
If E-Data's patent holds up in a New York federal court, the company will have the right to extract licensing fees from anyone who sells anything electronically from software suites to pay-per-view digital movies and Beethoven symphonies.
E-Data is now scheduled to present its infringement analysis and specific patent claims on August 21 to all 22 of the defendants that E-Data is accusing of infringing its patents, including the CompuServe online service. CompuServe refutes the accusation, criticizing E-Data for interpreting the Freeny patent too broadly.
After E-Data makes its presentations, defendants will reconvene for a conference on September 6.
E-Data recently launched an amnesty program called "Carrot or Stick: It's Your Choice" declaring that companies can either apply for a one-year renewable license from E-Data or be charged with patent infringement. Several companies, including IBM and Adobe, have in fact purchased the licenses for undisclosed amounts, but some observers have commented that such large companies would often rather simply fork over small sums than go to court, even if their case could likely win.