E-centives Inc. owns five US patents and also has dozens of pending US and foreign patent applications relating to its developments. It believes that its on-line print-at-home coupons will significantly impact on the coupon industry - which it values at $7 billion.
To protect this interest, it has sued rival print-at-home coupon provider Coupons Inc. in a Maryland federal court, alleging infringement of two of its patents.
Both of these patents are entitled "method and system for the electronic distribution of product redemption coupons to remote personal computers located at users' homes."
Basically, the patent descriptions cover the storage by a web site of coupon data for downloading by individuals. Each user's demographic, as well as choice of coupon, is provided back to the on-line service and coupon distributor for subsequent marketing analysis. When the printed coupons are presented at a retail store, the discount is provided to the user. Upon redemption by the store via a coupon redeeming centre, transaction data is also supplied to the coupon issuers and distributor for integration into marketing analysis.
Critics of business method patents will no doubt find little novelty in this description – it appears to merely apply one of the best known and most basic forms of direct marketing to the internet age.
According to the Promotions Marketing Association, more than 8 out of 10 Americans use coupons when grocery shopping, so the attraction of holding a monopoly in the on-line coupon market is obvious.
"We contacted Coupons, Inc. prior to serving them with the lawsuit and offered them a license," said Kamran Amjadi, CEO of E-centives. "Their refusal forced us to serve them to protect our intellectual property. We want to make sure our significant investments in resources and technology are not taken advantage of by those who are not playing according to established laws."
Amjadi concluded, "We will aggressively protect the rights granted to us by the United States Patent and Trademark Office against those who we believe infringe on these rights."