When did you start managing meetings online? Registering attendees via the Web? Holding virtual conferences? More to the point, what online meeting technologies were you using before December 30, 1997?
The timeline of the meeting industry’s technical evolution has become a hot topic, as it is central to the patent claims of Software Management Inc., a Pittsburgh-based meeting technology provider that has filed a patent application claiming the invention of 158 different meeting-related online processes. The timeline is important because if a particular process was in public use more than a year before the SMI patent filing on December 30, 1998, then SMI’s claim for that process is invalid.
Many of the major meeting industry associations, including the Convention Industry Council and Meeting Professionals International, began seriously addressing the SMI patent case late this summer—issuing white papers and holding industry discussions—after SMI sent royalty invoices to 25 organizations that are potential violators of its patentable claims. The American Society of Association Executives, in fact, has put out a call asking members to share records, anonymously if they prefer, demonstrating the early use or sale of online registration services or other Internet-based meeting management systems.
Although the 25 notification letters were sent to associations, corporations and other groups using online meeting management processes—particularly processes using the Application Service Provider model—are potentially in violation of SMI rights if its patent application is approved.
Check Your Mail
"We’re going very carefully, very legally," says SMI President Paul Franke. While perhaps 2,500 organizations are potential patent violators, after the first 25 notification letters, the company "halted [mailing the letters] to review the way the industry would react and to answer questions," says Franke, noting that the letters to individual organizations were preceded by notices to vendors and suppliers late last year. Will more letters be coming soon? "I don’t know; we’re still looking into that," Franke says.
While SMI has no right to royalty payments until it actually holds a patent, under the American Inventors Protection Act, in order to be entitled to royalties that are retroactive from the date its patents are granted (some day in the future) to the application date (August 2001), the company must notify patent infringers.
Several issues are at hand for meeting organizers. Industry experts are recommending that planners document the history of their Web-based convention practices and examine theirwith Web service providers. "Check to see if your agreements with these other parties contain provisions which would cover SMI’s infringement claims. … Also, what does your insurance provide?" reads the Meeting Professionals International white paper, which was written by Jonathan T. Howe of Howe & Hutton Ltd., Chicago.
For organizations that have received written notice, the situation is more complicated. (And perhaps for others as well: According to Franke, "SMI is currently reviewing all notification approaches including ‘notification’ using the trade press.") As the MPI white paper warns, "Recipients of the SMI letter are faced with a choice of expenditure and risk." They could pay the invoice—reportedly upward of $1,000 per event—but it might be a waste since "the requests for payment are speculative if and until, if ever, the patent issues. Should no patent issue or should a patent issue in a substantially altered form than the published application, this money will have been paid in vain," states the MPI white paper. On the other hand, if the patent is granted in basically identical form to the application, recipients of the SMI letter could potentially face "litigation of the most expensive variety," the MPI white paper states.
During an audioconference addressing the SMI issue, which was organized by the Professional Convention Management Association in August, Franke said that he is open to the idea of an industry escrow account. The account would hold payments until the outcome of the patent application process, allowing royalties to be returned if SMI is unsuccessful in its patent bid.
The Convention Liaison Council position paper, which holds that there is "no significant advantage to sign a license agreement now and pay royalties," offers an addendum for those who have received notice from SMI: a draft of a letter to SMI. The letter thanks SMI for the patent information and requests updates on progress of the application.
A Meeting Titanic?
"We did not want to be the groundbreaking patent filers in the industry, but we are. … However, we are probably the first of hundreds to be filed by many organizations and individuals over the next 10 years," said Franke in the PCMA audioconference. Indeed, E.J. Swiek offered facts to back up that thought. Swiek, president of Flashpoint Technologies, Bethel, Conn., who also participated in the PCMA audioconference, said, "This is just the tip of the iceberg, I feel, as far as patents coming forward. I did quick research … getting ready for today and pulled up at least 10 patent applications that all are relevant in the convention industry, and they’re all filed by other than SMI. … The wake-up call is here."
Estimates of when the U.S. Patent and Trademark Office will rule on SMI’s application range from several months to several years, with the latter being the more likely. Until then, "this is, by all accounts, the lull before the storm," says Howe’s MPI white paper, "and no one is even sure whether the storm will hit."
Concludes Franke, "At this time, it still appears that SMI is the pioneer in the online convention field and is entitled to the patent in this field, unless verifiable evidence emerges. I may fail in the end, but so be it. That is the process, and [it’s] one we should follow."
SMI Patent Homework
To read the SMI patent filing, go to: www.softwaremgt.com
To read more on the SMI patent filing, visit:
PCMA audioconference transcript (members only)