ECE 477 Digital Systems Senior Design Project Rev 8/09

Homework 10: Patent Liability Analysis

Team Code Name: ______POSitron______Group No. __7___

Team Member Completing This Homework: __Jacob_Wyant______

E-mail Address of Team Member: ______jwyant__ @ purdue.edu

Evaluation:

SCORE

/

DESCRIPTION

10 /

Excellent – among the best papers submitted for this assignment. Very few corrections needed for version submitted in Final Report.

9 /

Very good – all requirements aptly met. Minor additions/corrections needed for version submitted in Final Report.

8 /

Good – all requirements considered and addressed. Several noteworthy additions/corrections needed for version submitted in Final Report.

7 /

Average – all requirements basically met, but some revisions in content should be made for the version submitted in the Final Report.

6 /

Marginal – all requirements met at a nominal level. Significant revisions in content should be made for the version submitted in the Final Report.

* /

Below the passing threshold – major revisions required to meet report requirements at a nominal level. Revise and resubmit.

* Resubmissions are due within one week of the date of return, and will be awarded a score of “6” provided all report requirements have been met at a nominal level.

Comments:

Comments from the grader will be inserted here.

1.0  Introduction

POSitron is a point of sale system that allows a customer to easily purchase any product normally sold in a convenience store with improved efficiency by utilizing kiosks for product browsing and a separate inventory management system.

There are some issues with this idea, however, from a legal perspective due to the sheer number of patents dealing with point of sale systems which all contain a high degree of similarity. Fortunately, all of the patents examined do not mention any ideas used or utilized as a part in the POSitron.

2.0  Results of Patent and Product Search

Describe (at least 3) patents and/or commercial products that perform substantially the same function as your project. Remember to concentrate on the primary function(s) performed by your project (e.g., RFID-based beverage consumption monitoring, gesture-controlled IR remote, etc.). For each patent, list the filing date and include a (condensed) abstract along with the key claims for which the potential for infringement exists. For any commercial products identified, list any functions performed substantially the same way. Also, contact the manufacturer of the product to see if there are any patents pending or have been issued.

Initial searches for vending machines or automatic stores resulted in the discovery in some of the very first patents for these concepts: mechanical devices for selection, feeding, and dispensing of products from a storage compartment into a pick-up area for the customers. The first of these was filed in March of 1940 as an “Automated Article Selecting System and Apparatus”[1], and another, a “Package Feeding or Dispensing Apparatus”[2], was filed in December of 1941. Both of these have since lapsed and, again, are dealing with mechanical systems but the central idea is the same and so recognition is granted to these inventors.

Later searches into the more modern means of automated sales referred to as “point of sale” machines brought forth more recent patents with ideas quite similar to our own. The first which will be discussed is patent US 7,324,960, a “POS System”[3]. The document describes “A POS system including at least one store server and a plurality of POS terminals.” This phrase, or one with minor variation, is seen at or near the beginning of each patent concerning a POS system as it is the essential basic description. Several other portions also parallel our own and many other POS systems in that it is divided into a host database and a kiosk to interface with customers but the unique portion is that this idea also deals with a “…means for executing a transaction cancel instruction received from the store server to cancel a transaction that occurred at the POS terminal…”[3].

The second patent found protecting an idea similar to the POSitron is US 7,344,069 filed Jul. 7, 2000 with the name “POS System”[4]. Again this system contains a basic line similar to the previous patent: “A POS system comprising a host unit and a plurality of POS terminal units connected thereto via a predetermined communication line for data transfer/receipt between each POS terminal unit and the host unit is disclosed.”[4] And also like the previous patent discusses how it is divided into a host database and a kiosk to interface with customers. The unique aspect to this idea is that “sales data such as sales items, quantities and dates, which are inputted from a terminal unit installed in each shop, are sent out to the host unit. The host unit receives and sums up these sales data, and executes the most efficient stock management.”[4] Here lies the difference with our idea as in ours the stock management is handled entirely by the microcontroller on site at the inventory location.

The third patent is US 5,689,101 filed Jul. 31, 1995 under the name “POS System”[5]. This patent as it discusses not only a system involving kiosks for customer interaction and a database containing all of the store’s product information but also a “…system which employs a purchased commodity accommodating and transporting apparatus…”[5]. This makes it the idea most similar to the POSitron since it also contains a form of what is referred to in the POSitron as the “inventory management system”. Fortunately there system differs in that “A two-dimensional bar code printing section is provided on the purchased commodity accommodating and transporting apparatus and prints commodity code information from a commodity code reading section as a two-dimensional bar code.”[5]

3.0  Analysis of Patent Liability

Analyze your project’s potential liability for both literally infringing functions (identified in Section 2.0, above) as well as infringement under the doctrine of equivalents. Clearly and carefully describe how the function(s) performed by your project are similar/different than the function(s) performed by the patents/products identified in Section 2.0.

Based on the how close the patents for other POS systems are in their description it appears that very little is necessary to justify a novel idea in this area. As discussed, all three potentially infringing patents involve a series of customer kiosks which communicate to a central database which, in most cases, returns information and commands concerning product actions. This in fact is the biggest difference in our system: the structure of the system. The POSitron will not be receiving any commands from the central database but only information. The user kiosk will then decide what the next action it should perform without assistance from the database. Furthermore, all actions concerning inventory storage and distribution will be controlled solely by the microcontroller. This is a design decision unseen in any observed patent.

In addition to this difference of format is the difference in product information labeling which the third described patent, US 5,689,101, contains its own labeling system that is entirely different from what is done in the POSitron. The POSitron takes advantage of that information already in place on product packages both nutritional and the bar code.

4.0  Action Recommended

If the potential for infringement exists (identified in Section 3.0, above), indicate what action(s) should be taken. Remember that “simply adding functions” does not eliminate the potential for infringement. Also, simply “contacting a lawyer” is not a satisfactory answer (for real, commercial applications, this is assumed).

As discussed, no actions are seen as necessary to avoid infringement litigations. To be sure of this conclusion a law firm would be contacted before serious financial and temporary commitments were made. Any attempted suits would dealt with on the defense that the POSitron performs the function of a POS system in a significantly different way and therefore does not infringe on any existing patents.

5.0  Summary

Briefly summarize the contents of this report.

POS systems under patent protection are all very similar and only a difference in performance of the general task of automated sales is necessary. The POSitron’s difference is in its structure and the division of labor in that structure. Because of this the POSitron is a novel idea for a POS system and is therefore under no threat of litigation from patent infringement.


List of References

[1]  “United States Patent US2374537” [Online]. Available: http://www.freepatentsonline.com/2374537.pdf

[2]  “United States Patent US2353394” [Online]. Available:

http://www.freepatentsonline.com/2353394.pdf

[3]  “United States Patent US7324960” [Online]. Available:

http://www.freepatentsonline.com/7324960.pdf

[4]  “United States Patent US7344069” [Online]. Available:

http://www.freepatentsonline.com/7344069.pdf

[5]  “United States Patent US5689101” [Online]. Available:

http://www.freepatentsonline.com/5689101.pdf

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