Meetings Monopoly? Online Reg Software Could be Legal Liability
By Rowland Stiteler
Software Management Inc. (SMI) has been granted a broad-reaching U.S. patent for its multi-layered meeting and convention marketing, management and online registration software, in a victory for the company that may shake up the meeting and event industry.
According to legal experts familiar with the situation, the patent likely puts SMI in position to charge licensing fees for potentially dozens of other companies that have produced similar software, or to file patent infringement suits against those companies if they decline to pay.
The potential for liability goes beyond that of companies that produce similar software, however—it extends to destination marketing entities, hotels and convention centers and even meeting and event planners who merely use meeting management and online registration software that is in violation of the new patent.
“It’s not an overstatement to say this is a hugely significant development in the industry,” said Jonathan T. Howe, Esq., founding partner and president of Chicago-based Howe & Hutton Ltd. “It has potentially far-reaching consequences, and an important point is that not all of those consequences are known yet.”
Critics claim that SMI is not just seeking to reap the rewards for some unique process that it created, but using the legal system to gain a monopoly over a process that others have developed independently and have been using in their businesses for years.
“There are dozens of other software applications out there that were not created by SMI and pre-date SMI’s patent by years,” said Corbin W. Ball, CMP, CSP, president of Corbin Ball Associates and 20-year meeting management tech veteran. “What bothers me about this is that it appears to be an attempt to use the legal process to gain a monopoly. There is a difference between gaining a legal right to do something and having a moral right to do something.”
SMI has yet to spell out its specific intents.
“It is possible that some of the existing technology in the meeting industry today may be in violation of SMI’s recently issued patent,” said Jennifer Reichenbach, president of SMI. “We are working closely with our patent attorneys to review a variety of strategic options and will be proceeding very carefully to determine our best direction.”
Attorney Howe has a wait-and-see outlook about what will happen next.
“I am reminded of the old adage about the dog chasing the car,” Howe said. “What does the dog do with the car if he catches it? Based on public statements, SMI does not know for sure where it will go with this, and with the slow pace at which legal matters go forward, it could indeed be a long, long time before the true impact of all of this is known.”
An important factor, Howe says, is a case pending before the U.S. Supreme Court, Bilski v. Doll, which deals with whether a patent can grant exclusive rights to single party for commonly used processes. The court ruling, which is expected this spring, could negate SMI’s ability to claim patent infringement against a broad group of software providers and users.
Legal Issues Affecting Emerging Technology - @ MeetDifferent
Attend MeetDifferent, Feb. 20-23 in Cancun, to learn more about managing liability and related topics during “Web 2.0: Legal Issues Affecting Emerging Technology,” led by Barbara Dunn of Howe and Hutton Ltd. This session is so essential, it is being offered every day during MeetDifferent.
Posted on: 12/29/09