The Web is built on open standards. Until recently, XML was considered one of them. Now, Scientigo is claiming that two of its patents cover one of XML's fundamental principles and is looking to benefit from XML's broad usage.
Charlotte, NC-based Scientigo specifically claims that its two patents on a "method for modeling, storing and transferring data in neutral form" # 5,842,213 and # 6,393,426 covers XML's basic idea of data storing data in a self-defining package, which enables it to be correctly displayed regardless of platform.
Scientigo CEO Doyal Bryant has said that the company plans to make money from the patents by either licensing XML vendors or selling the patents to another company.
"There are many approaches to monetizing IP assets, and we believe [Scientigo] is approaching and preparing itself for the next wave in IP [intellectual property] asset management," said Bryant in a statement.
"Many people, lawyers in particular, are still looking at IP assets as a bundle of legal rights that you need to assert in court in order to get some money out of them."
Therefore, "With the existing high-level interest in XML and next generation search and document content management technologies, we believe the time is right for us to aggressively move our technology and IP strategies forward," said Bryant.
To make this happen, Scientigo has partnered with the law firms of Sterne, Kessler, Goldstein & Fox PLLC, an IP specialist; Wilson Sonsini Goodrich & Rosati PC and Inflexion Point Strategy LLC, a self-proclaimed "intellectual property investment bank."
Scientigo, itself, under the name Market Central Inc., has until recently been best known as a call center and CRM (customer relationship management) software company.
The patents themselves came from Pliant Technologies Inc., a Texas-based company, which Scientigo acquired in 2003. Pliant's CEO and founder Paul Odom, is now Scientgo's SVP of software applications and solutions.
Analysts, however, doubt the validity of Scientgo's patents.
Stephen O'Grady, a software industry analyst for RedMonk, said, "ugh," when asked about Scientgo's claims.
O'Grady explained in more detail: "The Scientigo claims are simply another unnecessary data point indicating just how broken the patent system is as it applies to software. While I've more or less given up hope that legislation will address this problem directly rather than leaving it to case law and precedent, sooner or later, the problem will have to be solved.
"As has often been noted, these overbroad patents, which require no implementation and thus prior art, are a real menace for software vendors of all sizes."
Indeed, "the only silver lining in this case appears to be the fact that by attacking XML, Scientigo will have to assail nearly every large vendor on the planet—a tall task, obviously."
O'Grady would seem to be correct. Besides its use on the Web for Web Services, organizations as diverse as Microsoft and OpenOffice.org use XML for document formatting.
Still other companies, like Sun Microsystems Inc., use XML for software development tools like the forthcoming Java Studio Creator.
Ron Schmeltzer analyst for ZapThink LLC sarcastically wishes Scientigo "good luck" on its patent capitalization attempts.
"XML is derived from a much-older technology, SGML, which has been around since at least 1986," explained Schmeltzer.
"Not only that, HTML derives from the same work, so are they going to pursue HTML claims as well? Besides, there's so much prior art here around metadata languages and text-based encapsulation formats that they have hardly a leg to stand on."
Schmeltzer added that this is "yet another example of a company that has chosen to forgo building real value for their customers to look for a quick and dirty buck in squeezing more successful vendors with ill-conceived patent claims.
"I don't think this is what the founding fathers had in mind when they developed our patent system."
Nevertheless, Scientigo is staying its course. The company claims that it has spoken to numerous XML vendors and that it is looking for "reasonable licensing terms."