About two decades ago, Amazon.com, Inc. revolutionized e-commerce transactions with the innovation of single click buying. Single click buying is a checkout process that enables customers to bypass the shopping cart to make an online purchase with a single click based on payment and shipping information previously provided by the customer. Amazon received U.S. Patent No. 5,960,411 (the 1-Click Patent) for this technology in 1999. Amazon also has U.S. registrations for the trademark “1-Click”. The 1-Click Patent will expire on Sept. 12, 2017 so the technology will enter the public domain and Amazon will no longer have exclusive rights. This is good news if you like to use single click buying at Amazon.com, iTunes, iPhoto, Apple App Store etc. (Apple, Inc. licensed the single click technology from Amazon) because many other companies will begin using this technology once the 1-Click Patent expires. If you have an e-commerce site, you should be preparing for the single click world where many customers will likely come to expect “frictionless transactions” everywhere including mobile applications.
The 20 year life of the 1-Click Patent has not been without controversy. Amazon filed U.S. Patent Application Number 08/928,951 on Sept. 12, 1997 less than a year before the 1998 State Street Bank decision of the U.S. Court of Appeals for the Federal Circuit acknowledging the patentability of business methods. If you are old enough to recall the fall of 1997, you will remember that most of us were barely online if at all, search engines were relatively new, and few companies had websites. In addition, we listened to music on compact discs (iTunes and the first iPod were not released until 2001) and google was just the number 10 raised to the power 100 (Google was founded Sept. 4, 1998). The existing e-commerce sites were modeled after brick-and-mortar stores so online purchases were less than frictionless. With Amazon’s single click innovation, a novel and large improvement over then existing e-commerce sites, Amazon’s patent application sailed through the U.S. Patent and Trademark Office (USPTO) with relative ease.
The 1-Click Patent issued on Sept. 28, 1999 with relatively broad claims just in time for the Christmas shopping season. In October 1999, Amazon filed a patent infringement lawsuit against Barnes and Noble regarding its Express Lane option for online purchases. Amazon obtained a preliminary injunction against Barnes and Noble in December 1999 to remove its Express Lane option at the height of the Christmas shopping season. In 2000, Amazon licensed the single click technology to Apple, Inc. just prior to the launch of iTunes in early 2001. The U.S. Court of Appeals for the Federal Circuit later removed the injunction against Barnes and Noble on Feb. 1, 2001. By then, however, the 1999 Christmas shopping season was over (as well as the 2000 Christmas shopping season), Amazon had a head start among the two leading online booksellers, and the controversy regarding technology patents in general and business method patents in particular was in full swing. The lawsuit against Barnes and Noble was settled in 2002 with undisclosed terms.
On May 12, 2006, a reexamination of the 1-Click Patent was ordered by the USPTO based on Reexamination Request Number 90/007,946 filed on Feb. 16, 2016 by the actor Peter Calveley (allegedly because he was fuming over an incredibly slow book delivery). The request cited a 1998 patent (issued from an application filed more than a year prior to Amazon’s application) for a Digicash payment system among other prior art. With the Digicash payment system, a customer had an electronic cash account and the purchase price was automatically deducted from the account every time the customer clicked on an item for purchase using a single click. On Oct. 9, 2007, the USPTO confirmed the validity of claims 6-10 of the 1-Click Patent and rejected claims 1-5 and 11-26 of the 1-Click Patent. In response, Amazon amended independent claims 1-11 to limit the claims to a shopping cart model of e-commerce. An Ex Parte Reexamination Certificate allowing each the claims of the 1-Click patent was issued on July 13, 2010. While the patent eligibility controversy regarding technology and business method patents continued, leading the Alice Corp. decision by the U.S. Supreme Court in 2014, loud criticism of the 1-Click Patent seemed to all but disappear.
With the single click technology entering public domain on Sept. 17, 2017, some will continue to say it is an excellent example of how the patent system should work while others will continue to say it is a perfect example of a broken patent system. But what may be next? The World Wide Web Consortium (W3C) hosted a gathering of major technology companies including Apple, Facebook, Google and Microsoft last September to begin developing standards for adding payment credentials onto web browsers which would allow online shoppers to make single click purchases through any website via credentials saved on their web browser. It is not yet clear whether such a system will be successful considering the need for so many competing interests to come together and, if so, whether customers will even adopt such a system requiring entry of personal details into their browser. So are you preparing your e-commerce site for the single click world coming this fall?
