(1) Even after these many years of use in the software business,
the Supreme Court has not ruled that /any/ "algorithm" patents are
valid. In fact, they've quite clearly stated that they are not,
but they did so as dicta in opinions that upheld the patentability
of devices whose only distinguishing characteristic is an algorithm,
so the USPTO and the industry has taken that to mean such patents
are valid, and thousands have been issued. Since that ruling the
court has become less IP-friendly, but the legislature has become
moreso; it's anybody's guess how the issue will be settled.
(2) To be patentable, a work must be both "novel" and "unobvious".
This probably fails both tests, but since the USPTO issued it anyway
(they have no competent computer scientists, so they've issued
patents for such absurdly obvious things as XOR cursors and natural-
order spreadsheet recalc), there is for the moment a presumtion in
the minds of most equally incompetent trial judges that the USPTO
knew what it was doing. The holder can sue you for infringement and
you will have to defend yourself at no small expense.
(3) The nature of the net changes the dynamics of the litigation a
little bit. It is rare to have an invention that a million people
can vouch for being used earlier, and for being obvious. Something
as common as Net shopping-carts also will have media attention.
Mass protest is also a distinct possibility. Imagine thousands of
small-time net merchants thumbing their nose at it; there's little
the patent holder could do against them all.
(4) If the patent /is/ valid (hard to imagine, but possible), it
belongs to the person who first "invented" (i.e., conceived) of it,
/provided that "due diligence" was maintained in reducing it to
practice/. That is, it doesn't matter what the filing date was if
the holder can prove that (a) he had the idea before, and (b) he
was diligent in bringing the idea to fruition since then. So you
will need to look for prior art as early as possible, not just any
prior to the filing date. Preferably something before the company
in question was formed.
-- Lee Daniel Crocker <lee@piclab.com> <http://www.piclab.com/lcrocker.html> "All inventions or works of authorship original to me, herein and past, are placed irrevocably in the public domain, and may be used or modified for any purpose, without permission, attribution, or notification."--LDC