Patent Suits Continue: Should Customers be Concerned?

Before the long Thanksgiving weekend, I posted a quick blog entry on Emptoris’ recent patent suit against Ariba. Most likely, this suit came as a response to Ariba's previous infringement claim against Emptoris (which used FreeMarkets' negotiation-focused patents as the basis for the complaint). But how should customers or prospects look at these actions and filings? In my view, if we look at the relative brief history of the space, there's no need for customers or prospects to get overly concerned about all of this recent patent enforcement activity. As far as I can tell from my limited research on the subject, no vendors have either closed their doors or taken features away from customers as a result of patent litigation in the Spend Management sector. Rather, these suits represent posturing for either:

A) Money (e.g., ePlus' process patent claim against Ariba)
B) Competitive positioning (e.g., Ariba's suit against Emptoris at a time when it was rumored that Emptoris would file an S/1)
C) Counter claims / leverage (e.g., the recent Emptoris complaint could be read in part as a response to Ariba's claim against Emptoris)

So in short, if you're a customer or prospect of either Emptoris or Ariba, don't be worried (at least at this point). Even if it was Texas Instrument who had filed the complaint, it would not be a cause for concern (one of TI's primary revenue strategies is patent enforcement, in fact). In general, those who file patent suits -- despite what a claim might state -- could care less about shutting down a defendant. They either want to make a buck off of them or damage their competitive positioning. But as a customer or prospect, I will point out, you do have a choice to vote with your wallet and provide other companies not engaged in filing patent litigation suits with an advantage for opting not to bring in the lawyers. After all, there's something to be said for letting products compete based on their own merits rather than bringing in the $500 / hour legal sharks to duke it out.

Jason Busch

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