Hot on the heels of coming to terms with Priceline after a 3-year legal battle over patent infringement, IBM is taking aim at Expedia (along with affiliated companies that include Hotels.com and Orbitz) with a new law suit over the same intellectual property. In doing so, IBM is laying the foundation for collecting licensing fees from every company offering omnichannel, device agnostic, conversational services. The patent portfolio spans display of info and services across multiple devices, insertion of advertising or promotional messages into Web pages and a way of preserving “state information” (such as a user’s identity) across “stateless” networks.

These methods and processes were invented by IBM’s researchers to support Prodigy, a consumer online service launched in the early 1980s by a trio of corporate category leaders that linked Big Blue with the broadcasting giant CBS and the world’s leading retailer Sears. It was a formative time in the pre-Internet and World Wide Web world when the leading providers of consumer online services were America Online (now dubbed Aol and operating as part of Verizon’s OATH subsidiary) and Compuserve Information Services (then a subsidiary of H&R Block, but after an acquisition by Aol in 2004, part of OATH as well).

From the beginning, Prodigy sought to differentiate itself by taking on the characteristics of Videotex services, meaning that it displayed text, pictures and animations (crude as they were at the time) as part of a more graphically engaging page that could be displayed on a multiplicity of terminals. This is an attribute of every interactive service that is accessible through iOS, Android, MacOS, Windows and others. It is covered by “Claim 1 of the ‘967 patent” for which Big Blue is now making claims for compensation.

Recognizing that subscription payments were but a fraction of potential revenue, IBM’s researchers developed and patented the methods and procedures for end-users to obtain advertising and promotional messages from remote systems operated by hotels, airlines or travel agencies. This is one of the fundamental patents, referred to as the ‘849 patent which Big Blue now makes claims for compensation.

The Conversational Commerce community should take note of Claim 51 in the ‘601 patent that is subject to the suit. It deals with “preserving state information (such as identification variables about a user and/or the user’s request) in a conversation via a stateless protocol” from on or more servers. This sounds routine by today’s standards (using http or https) to request a Web page. In the 1980s dial-up world it was radical and it leads to what is probably the most important claim from the perspective of both Intelligent Assistance and Intelligent Authentication.

One of the claims in the ‘346 patent is that IBM’s researchers “invented methods for user account creation operations using a single-sign-on process in a federated computer environment. Even though it was conceived of nearly 40 years ago, it goes a long way toward defining the enrollment process that supports Intelligent Authentication, a continuous, friction-free way to establish trusted communications between brands and individuals.

BPOs and contact center operations professionals may detect a resemblance to the enforcement activities of Ron Katz and the dreaded RAKTL (Ronald A Katz Technology Licensing LP). Having worked with three industry giants, AT&T, American Express and First Data Corporation, Katz compiles a portfolio of process patents describing hundreds of processes and operations for an automated contact center. He began an enforcement effort by convincing the major outsourcers, one-by-one to license his technologies. He eventually convinced more than 200 firms, including IBM and Sears incidentally, to pay his fees.

My understanding is that the Katz patents, expired around 2009. While they were in force, brands would routinely ask their contact center outsourcers to indemnify them against Katz’s enforcement proceedings. Other large firms – a list that included American Express, AT&T, Avon Products, Bank of America, Delta Airlines, Merck, Microsoft, Target, United Airlines and Wal-Mart – all of which had large internal contact centers, paid for their own licenses.

Industry-wide Implications

With claims that span advertising insertion, enrollment and continuous authentication, service providers, technology developers and brands may have to regard paying licensing fees to IBM as part of the cost of doing business.

Categories: Conversational Intelligence, Intelligent Assistants, Intelligent Authentication