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SOCNET  December 2003

SOCNET December 2003

Subject:

Fwd: NYTimes.com Article: Patents: Idea for Online Networking Brings Two Entrepreneurs Together

From:

Stan Wasserman <[log in to unmask]>

Reply-To:

Stan Wasserman <[log in to unmask]>

Date:

Mon, 1 Dec 2003 10:09:22 -0600

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (164 lines)

*****  To join INSNA, visit http://www.sfu.ca/~insna/  *****

>
>Subject: NYTimes.com Article: Patents: Idea for Online Networking Brings
>Two Entrepreneurs Together
>Date: Mon,  1 Dec 2003 08:08:38 -0500 (EST)
>
>Patents: Idea for Online Networking Brings Two Entrepreneurs Together
>
>December 1, 2003
>  By TERESA RIORDAN
>
>
>
>
>
>THE last few months have brought a flurry of new Web sites
>devoted to social networking - that is, helping people use
>friends of friends to do such things as find better dates
>or more lucrative jobs. Now, as some industry insiders rush
>to protect their intellectual property in this arena,
>others are murmuring about an impending patent war that
>they expect to bring an industry shakeout.
>
>Friendster, one of the better-known social networking sites
>and, at nine months, one of the oldest, has been joined by
>sites like Tickle, Zero Degrees, Spoke and Ryze. Spoke, a
>networking site for salespeople, has boasted that it has 15
>pending patent applications, although the applications have
>not yet been published, and the company has not disclosed
>details.
>
>Now come Tribe and LinkedIn, sites started last summer,
>whose owners paid $700,000 in September to YouthStream
>Media Networks for United States patent No. 6,175,831, also
>known as the "six degrees patent," which they consider the
>seminal social networking patent. It covers an online
>software platform that allows users to build relationship
>networks. Andrew Katz, a lawyer with Fox Rothschild who
>specializes in Internet intellectual property deals, said,
>"This is probably the pioneer patent out there." Mr. Katz,
>who said he had no financial interest in either Tribe or
>LinkedIn, added, "It should be taken very seriously by
>everybody in the industry because it is in the hands of
>people who have the means and the business acumen to
>enforce it properly."
>
>Not everyone agrees. Antony Brydon, president of Visible
>Path, which creates networking software intended to help
>salespeople, said his company would probably not be
>affected by the six degrees patent because his business
>relied on algorithms that evaluate the quality of
>relationships, rather than simply building on the fact that
>two parties acknowledge that they have a working
>relationship.
>
>"A lot of people treat relationships as binary - a
>relationship either exists or doesn't exist," Mr. Brydon
>said. "But social networks are more complicated than anyone
>could have ever predicted. It becomes very important to
>figure out which relationships are strong and which ones
>are very weak. It's important to find the 10 percent of
>relationships that can actually open deals and close
>transactions."
>
>Rather than patenting algorithms that cover, for example,
>monitoring the rate at which members exchange e-mail
>messages, Visible Path is treating them as trade secrets.
>"We put those in a black box and don't give access to
>anyone," Mr. Brydon said. "We think that is a higher form
>of protection."
>
>Patents, on the other hand, require that the inner workings
>of an invention be disclosed when the patent is published -
>the idea being that in exchange for an exclusive right to
>their invention, inventors must help propel progress by
>sharing their knowledge.
>
>But Reid Hoffman, chief executive of LinkedIn, and Mark
>Pincus, chief executive of Tribe, considered the six
>degrees patent so valuable that they bid on it and won when
>YouthStream decided to auction it, saying it was not using
>it in its current business operations. They learned about
>it from Andrew Weinreich, a lawyer, who founded
>Sixdegrees.com in 1997 with a friend, Adam Seifer.
>YouthStream bought the company in 1998 for stock then worth
>$125 million.
>
>Sixdegrees.com was a social networking company. Its name
>played on an idea by Stanley Milgram, a Harvard
>psychologist. More than 35 years ago, he suggested that all
>people on earth were connected by no more than six degrees
>of separation - that is, two people who did not know each
>other would find a link through no more than six people.
>His idea is not the subject of the patent; rather, it
>covers the software code for making it work in computer
>systems.
>
>Mr. Weinreich said in a telephone interview that the six
>degrees business concept was ahead of its time, coming as
>it did a few years before digital cameras became
>ubiquitous. Thus, it could not offer what has become an
>integral part of the online dating game: photographs.
>
>In addition to having started their respective social
>networking sites last summer, Mr. Hoffman and Mr. Pincus
>each own about 2.5 percent of Friendster, which they bought
>separately. Mr. Hoffman purchased his shares in September
>2002; Mr. Pincus bought his in February. Discussing the
>patent, Mr. Pincus said he and Mr. Hoffman were "talking to
>Friendster about partnering, where they would pay to be a
>co-owner." No one from Friendster responded to several
>e-mail messages and telephone calls inquiring whether
>Friendster was interested in the matter.
>
>Mr. Pincus said that he and Mr. Hoffman did not want to be
>perceived as "two investors gone astray trying to hold up
>Friendster for ransom." But they also did not want to get
>into a bidding war with Friendster's other investors, he
>said.
>
>Even though Mr. Hoffman and Mr. Pincus bought the patent
>primarily as a defensive measure - to prevent another
>company from acquiring it and demanding royalties from them
>or putting them out of business - Mr. Hoffman said a number
>of their competitors were going to be surprised when they
>learned of the patent.
>
>"The general attitude among entrepreneurial people is that
>they think that they were first and that there is no
>history to what they are doing," he said. "Both Mark and I
>had tracked six degrees as an intellectual precursor to our
>own businesses."
>
>The six degrees patent is not the only one to have been
>issued covering aspects of social networking.
>
>Tacit Knowledge Systems, of Palo Alto, Calif., has been
>issued at least nine patents for "knowledge systems"
>technology, which, patent disclosures suggest, touch on
>social networking. Tacit and In-Q-Tel, of Arlington, Va., a
>private venture backed by tax dollars to keep the Central
>Intelligence Agency abreast of the latest technology,
>signed a broad licensing deal in June to deliver Tacit's
>technology to selected customers in the United States
>intelligence community.
>
>Nonetheless, other entrepreneurs like Mr. Brydon are
>skeptical that patents will play a significant role in
>shaping the social networking landscape, even though Mr.
>Weinreich, the co-founder of Six Degrees, is an adviser to
>Visible Path. "This industry is going to go in a thousand
>different directions," Mr. Brydon said. "I think we're
>going to find that many of the things being protected today
>are completely irrelevant a year from now."
>
>http://www.nytimes.com/2003/12/01/technology/01patt.html?ex=1071284118&ei=1&en=98704fbfcfcd2753
>

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