Walker Digital of Priceline.com Sues Apple Over iPhone Feature
IDF Beijing 2011: The Rise of Tablets

Walker Digital Sues Apple on a Second Front regarding iTunes

1 V2 - Walker Digital vs. Apple - Patent Infringement Lawsuit report - April 2011 
Earlier this morning we posted a report covering Walker Digital's first patent infringement lawsuit against Apple concerning the iPhone's Map + Compass feature/app. On a second front, Walker Digital is suing Apple regarding their iTunes Store system. Apple is only one amongst 28 other defendants that offer online sales. The others include such brands as Amazon, Microsoft Wal-Mart, Verizon, Target and Saks. Less than a month ago Cordance Corporation sued Apple over their iTunes system as well. This is obviously going to take years before all of these iTune store system lawsuits get ironed out. As online app stores are about to explode onto the market in the coming years, these types of lawsuits will become commonplace as companies jockey for the right to royalties for their online sale patents. There's a lot of money at stake here for the winner(s) and the noise has only begun.  


Factual Background


Walker Digital is a research and development laboratory that has invested many millions of dollars in the development of its intellectual property. Walker Digital is comprised of a diverse group of inventors who solve business problems by studying human behavior and designing innovative solutions utilizing modern information technologies. Walker Digital's invention team has created a portfolio of more than 200 U.S. and international patents in a wide range of industries that include retail, vending, credit cards, security, gaming, educational testing, and entertainment. Jay Walker, the chairman of Walker Digital, is best known as the founder of Priceline.com, which brought unprecedented technology and a new level of value to the travel industry. The business processes that guide Priceline.com's success were created in the invention lab of Walker Digital. As an inventor, Mr. Walker is named on more than 450 issued and pending U.S. and international patents.


Walker Digital has invested large sums of money to develop the inventions of Mr. Walker and the team of innovators. This investment was used for many things, including the development of laboratory facilities to assist with the development and testing of new inventions which, in turn, generated additional new inventions. Many of these new inventions have been the genesis for successful businesses, including Priceline.com and Synapse, Inc. Revolutionary technologies, including the pre-sale data broadcast system and method described and claimed in the '942 patent, were a direct result of that investment.


The '942 patent represents breakthrough technology in the field of electronic computer- and internet-based commerce and marketing ("e-commerce"). Through the inventions of the '942 patent, e-commerce retailers and merchants use a consumer's identified original product to determine and offer a substitute product to the consumer, thereby increasing their overall sales. By way of example and not limitation, the e-commerce retailers and merchants receive transaction data from consumers regarding an original product, such as a Blu-ray or DVD of the movie Inception or a silver charm bracelet, through their websites, transmit that data to their servers to determine possible substitute products, such as a Blu-ray or DVD of the movie Salt or a canary stone heart prong ring, offer those substitute products to the consumers through their websites and consummate sales of the original and substitute products depending on input from the consumer.


The Asserted Patent


On June 26, 2007, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,236,942 ("the '942 patent"), entitled "Pre-Sale Data Broadcast System and Method" to Jay S. Walker, Daniel E. Tedesco and Magdalena Mik Fincham, who assigned their rights and interests in the '942 patent to Walker Digital. Walker Digital is thus the owner of the '942 patent.


2 - Illustrations from Walker Digital's Presale Data Broadcast System Patent - April 2011 

The Alleged Patent Infringement In-Part


According to court documents, the complaint states the following: "Defendant Apple is infringing (literally and/or under the doctrine of equivalents) the '942 patent in this District and throughout the United States by, among other things, making and using systems for promoting a sale of a substitute product, including iTunes, covered by, without limitation, claims 1, 12 and 13 of the '942 patent. By way of example and without limitation, Defendant receives transaction data from a consumer regarding an original product, such as DVD movie, through iTunes, transmits that data to its server to determine a possible substitute product, such as a different DVD movie, offers the substitute product to the consumer through iTunes, consummates the sale of the original product if no information concerning a substitute product offering is received or the consumer declines the substitute offering, and consummates the sale of the substitute product upon acceptance of the offer of the substitute product by the consumer.


The Civil Cover Sheet


3 - civil cover sheet in walker digital vs Apple in second case about iTunes - april 2011 

The case was filed in the United States Delaware District Court. No Judge has been assigned to this case of this date.


Others listed in the Lawsuit Include: Amazon.com, Inc., Barnes & Noble, Inc., BestBuy Co., Inc., Bloomingdale's, Inc., Dell, Inc., eBay, Inc., Expedia, Inc., Gap, Inc., GSI Commerce Solutions, Inc., Macys.com, Inc., Microsoft Corporation, NBA Media Ventures LLC dba NBA Store, Nieman Marcus, Inc., Nordstrom, Inc., Overstock.com, Inc., Saks Direct, Inc., Saks Incorporated, Target Corporation, Verizon Communications, Inc., Bell Atlantic Mobile Systems, Case Inc., GTE Wireless Incorporated, PCS Nucleus, L.P., JV PartnerCo, LLC and Cellco Partnership and Wal-Mart Stores, Inc.


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