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Scientigo-A-GoGo


Patents

By JCausey, Section IP Articles
Posted on Mon Oct 31st, 2005 at 12:29:31 EST

A couple weeks ago news broke about a company in Charlotte, North Carolina - Scientigo - who was planning to enforce patents that they claim gives them rights to XML. Once again, we have an example of how poorly patents on software and business methods serve the public good they(patents) were supposed to be granted for. The fact that this company is trying this tact should come as no surprise though. Some have suggested Scientigo has looked to the SCO v. IBM case as a "model" for how to sow FUD and slow down a market in which a company is about to become extinct. However, it could easily be the other way around. As you will see, Scientigo CEO Doyal Bryant has been involved with similar schemes in the past and the "team" he has put together appears to have no qualms about software patents.

The Patents
Before getting into some of the background about the parties involved, I would like to quickly mention the two patents involved. One is 5,842,213 which is titled Method for modeling, storing, and transferring data in neutral form. This particular patent was filed in January 1997 with inventors listed as Paul S. Odom and Michael J. Massey. The other patent, 6,393,426 is a continuation of the other patent and was filed in July 1999. The interesting thing that some others have pointed out is that the original patent was filed AFTER the XML draft specification was publicly released. Of course, this followed on over ten years of work on SGML, of which XML is a subset. So, it appears this is yet another patent that never should have been issued (even if one accepts the concept of software/business method patents).

Party #1 - Scientigo
Our first stop in looking at the history of Scientigo is to review who they are. Interestingly enough, the company just recently changed their name. OK, perhaps they did get that bit of strategy from The SCO Group - change your name as you commence your litigation strategy in hopes your past will not follow you. In this case, Scientigo was formerly known as Market Central. Their primary product appears to have been "SourceWare Search". According to one web site, this application:

is designed to find and effectively leverage information across the enterprise, whether contained in an Intranet, email, C drives, file servers, or in a database on the network.
Now, I don't know about you, but it sounds like Google Desktop Search to me. I'm sure there are probably other products out there that are similar (I'm still trying to get Beagle for my SuSE desktop to work).

Scientigo also recently acquired a "product" from Convey Systems, OnDemand CRM. From what I've been able to find so far, Convey Systems has ceased to exist as Convey, being swallowed up by Scientigo/Market Central. Convey was formerly a part of The TAG Group, Inc. Interestingly enough, TAG also appears to have ceased to exist (at least on the web - nothing at www.tagginc.com), though its other line of business, techumbrella is still alive.

The fact that both TAG and Convey Systems have apparently ceased to exist is probably related to the fact that the CEO of both of those companies, Doyal Bryant, was part of the deal when Market Central acquired Convey Systems. Mr. Bryant became the new CEO of Scientigo. Mr. Bryant has a background with several companies, mostly in the telecomm industry including ZTEL, Premiere Technologies, CommSouth, Talk.com, PrimeTec International, and ATMNet. It appears to me that this connection is most closely related to his role as a managing director with Emerging Technology Advisors, a firm that provided consulting services in the telecomm industry. For instance, in this article he is discussing prepaid dailtone services and we see Z-Tel's name pop up as well. It is through this background that we find out he is familiar with the concept of patent litigation. This is not the first time he has tried something like this - back in 1998 he was advising Marvin E. Marshall who claimed to hold patents on technology used by calling card companies. As you read the linked article, you can see how the strategy of submarine patents was alive and well back in the 1990's.

Party #2 - Sterne Kessler Goldstein & Fox
The second party to look at is the law firm of Sterne Kessler Goldstein & Fox. They specialize in a variety of areas, including intellectual property. They are a very busy firm when it comes to filing patents. According to Scientigo's press release announcing their "dream team", the three individuals from SKGF involved with Scientigo are Rob Sterne, Michael Specht, and Don Featherstone. The bios for all of these individuals are available on the firm's web site. Looking at the info for Robert Sterne, you may note that he frequently partners with Michael Q. Lee, another member of the firm who wrote an article, A Long-Term View: Software Should Be Patentable in Europe in which he argues software patents encourage innovation. In particular, he tries to make an argument that software patents and open source can "co-exist".

Party #3 - Wilson Sonsini Goodrich Rosati
The next firm retained by Scientigo to help with this scheme is Wilson Sonsini Goodrich Rosati. The individuals involved include Trevor J. Chaplick and Michael I. Raschid. One thing I noted about Chaplick is that he once co-authored a paper with Sterne of SKGF, Why directors must take responsibility for intellectual property. WSGR has an interesting list of results of cases and clients they have worked with. I noted that they helped Diamond Multimedia in a suit against the RIAA in a case involving Rio mp3 players.

Party #4 - Inflexion Point Strategy
The final element to add to this mix is Inflexion Point Strategy, which describes itself as an "IP investment bank". The firm is run by Ron Laurie, a consultant and attorney who has, among other things, taught courses at Stanford and U.C. Berkeley. Going through his site, he has an extensive history with tech companies and a variety of deals.

Conclusions - stock scam in the making?
So where is Scientigo heading with this move? Besides the obvious - trying to submarine their way to MONEY! In initial reports, Scientigo CEO Bryant specifically mentions Amazon as an example of a company that may owe royalties if this scheme succeeds. The question I wonder about is "why Amazon?" Could this be some type of attempt to target A9, Amazon's new search service? Or perhaps Amazon may serve as a "test" for them to go after any company storing product data using XML?

Another likely theory is "stock scam". I ran across a report by Ron Struthers, who operates playstocks.net, in which he was really talking up Scientigo back in March 2005. As he explains, there is big potential for someone to capitalize on search engines and he apparently thinks Scientigo has just the right "technology" to do that or as he puts it, they could be the "next big thing in search technology." The parallels with SCO are almost humorous -

  • "potential to make $50 for every $1 invested if" according to Struthers
  • a bunch of interrelated (nee incestous?) relationships between companies
  • changing the name
  • a stock with
    the potential to obtain a market cap of several $billion instead of the miniscule $14 million currently"
  • a CEO who just made a presentation about PIPE deals
As a final note, Taglich Brothers has initiated coverage (with a neutral rating) on the Scientigo stock, although they do note that last year about this time the independent auditors had expressed some doubts related to Scientigo's status as a going concern. If you want to monitor this company, you may want to check out the Yahoo listing for Market Central.

Thanks for reading,
Jeff

< Breaking News! (106 comments) | Time for Windows to Prove Its Value? aka put up or shut up? (23 comments) >
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Scientigo-A-GoGo | 11 comments (11 topical, 0 editorial, 9 hidden)
Bye bye spambot (none / 1) (#10)
by Potential Recruit on Mon Nov 27th, 2006 at 13:44:36 EST
This used to be a spambot post that is flooding the site. Due to volume, I had to resort to this while I work to block access by these bots. My apologies - thanks for your patience.

Jeff

Bye bye spambot (none / 1) (#11)
by Potential Recruit on Mon Nov 27th, 2006 at 13:50:17 EST
This used to be a spambot post that is flooding the site. Due to volume, I had to resort to this while I work to block access by these bots. My apologies - thanks for your patience.

Jeff

Scientigo-A-GoGo | 11 comments (11 topical, 0 editorial, 9 hidden)
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Related Links

~ news broke
~ Scientigo
~ 5,842,213
~ 6,393,426
~ some others
~ one web site
~ Google Desktop Search
~ acquired
~ techumbrel la
~ this article
~ was advising
~ Sterne Kessler Goldstein &amp; Fox
~ filing patents
~ press release
~ A Long-Term View: Software Should Be Patentable in Europe
~ Wilson Sonsini Goodrich Rosati
~ Why directors must take responsibility for intellectual property
~ list of results
~ Inflexion Point Strategy
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~ report
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