October 29, 2005

Who Owns XML?

Continued from page 2

By Wade Roush

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RL: The answer is, by being reasonable as far as the licensing terms go. If you're not reasonable, if you're trying to hold the industry ransom, you're going to be in court for the rest of your life, because people will challenge the patent any way they can. My own personal view is that the way you avoid those challenges -- and nobody wants that -- is to be commercially reasonable in the licensing terms and not try and hold anybody up.

WR: There is some history around that. At various points, the W3C has worked with consortium members who hold patents related to developing Web standards to ensure that the patented technology is shared either under reasonable licensing terms or entirely royalty-free. Have you met with the W3C or discussed how your claims might be licensed through the W3C process?

RL: No, we haven't. Whether there should be some involvement now -- we haven't talked about it. It's an interesting question. We believe the success of any monetization system has to do with reasonable licensing.

WR: The patents we're talking about were granted in 1998 and 1999. What's the history of Scientigo? How did you come to own these patents? And what led you to decide to try to exploit them now?

Doyal Bryant: I came in about a year and a half ago. The company [then Market Central] was mainly a call-center company making a customer relationship management play, and it had assets, including Pliant Technologies, an acquisition it made in 2003. The company was deep in debt and had a lot of litigation problems. We spent nine to 12 months cleaning it up and recapitalizing and refocusing the company. I made a decision as we sold off the other assets to devote the entire effort of this company to building upon the technology platform that Paul and his team brought to us from Pliant. We needed to see if there was an asset that we had in our patents, and what value that might have to somebody else in the world. But I really want to make it clear that we are not in any way a "patent assertion" type of company. We're just trying to leverage what we have.

RL: Traditionally patents were viewed just as a ticket to court. "I have a patent, you're infringing it, you pay me." That's not at all what we are doing....What we're looking to do is to monetize the patent, which is code for a whole range of opportunities, one of which is to sell it to someone for whom it has strategic value. Many companies are looking to acquire broad patents for defensive use, so when competitors come along with patent suits they have something to trade with....There is a rapidly growing market in companies looking to acquire outside patents. That is the main focus of our strategy, to take these neutral form patents, which are very broad, reserve a license to help the company do its core business, and monetize the patents by selling them to someone for whom they have strategic value.

WR: What is your core business?

PO: We have two major product lines at this point that all fit on top of an engine that is based upon the two patents -- actually four, only two of which we've been talking about. Those two products are intelligent document recognition, which attempts to look at structured and unstructured documents as an individual would look at them and interpret them on the fly, extract appropriate information, and classify them. The other product we have is a search product that can track context and semantics and put it all together into one algorithm to give significantly more relevant answers.

WR: How does that relate to your patents?

PO: Neutral form is the basis for the engine. Based on those patents, we've created a "projection" technology that projects individual data items into a repository. Atomizing the data in that form allows you to do significantly faster processing, with far fewer resources than with the traditional algorithms.

Who Owns XML?

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