Is Jay S. Walker the New Age Edison?
15 years ago, the way we booked a flight with an airline, was done either in person or over the phone. Now, we roll out of bed over to our laptop and a few clicks later we’re off to Tahiti. Jay S. Walker took it one step further. Witty commercials starring former Star Trek actor William Shatner began to appear in the late 90’s. Changing up the world of online sales, he introduced the idea of enabling consumers to name the price they’ll pay for airplane tickets, as well as hotel rooms, mortgages and cars with priceline.com.
Walker spent his formative years exercising his entrepreneur skills. While pursing a degree in Industrial Relations at the prestiges Cornell University, he started the Midweek Observer in Ithaca, New York and it turned out to be triumphant. This was only the beginning of his success.
Walker went on to co-found Synapse group inc., a subdivision of Time Warner. Synapse became the largest merchant of public magazine subscriptions in the United States, putting to use their “continuous service” patented business model. The controlling share of the company was purchased for a cool 500 million dollars. ("Loeb Enterprises")
From there, Walker went on to tackle Priceline.com. Priceline was developed in a laboratory with around 30 individuals who all set out to discover e-commerce solutions that would make a difference in generations to come. In a 1999 interview with Charlie Rose, Walker explained his mindset behind the idea as well as the development of the website. “It’s just that simple.” Said Jay, “I can give you a price you can’t get anywhere else. Common sense tells you Priceline will work.” He realized that airlines book about half of the seats in their aircrafts daily, meaning airplanes were flying with about half a million empty seats. Priceline was the answer to the public’s desire to travel on a bargain, and the airlines answer to making money for what they would have otherwise acquired none. Walker has used this same model to sell cars, groceries, and houses. Priceline gets a commission of the difference between the price the consumer pays and the price Priceline purchases that product for. ("An interview with Jay Walker")
Through out the years Walker has developed the nick name “New Age Edison” due to his keen knack for inventing. Nobody has been more diligent in patenting Internet business ideas than Walker. He is the holder of ten internet business idea patents and has over 250 pending. Numbers like this are quite controversial. It becomes tricky, because internet businesses are still a rather new concept in an old game. Walker has been accused of patenting the evident , Bill Gurley, then a high-profile securities analyst and now a venture capitalist, argued bluntly that seven months before Priceline launched, he'd outlined a business model almost identical to Priceline's in a Fortune magazine column.
It seems as though as the turn of the millennium Walker was looked at as this inventing guru, lately he’s been more occupied with battling companies on legal issues. Walker Digital, filed fifteen lawsuits against more than 100 companies on April 11th of this year. This situation reminds of last year when Microsoft’s Paul Allen sued over methods of content aggregation and recommendation. If you recall, when Paul Allen, the Co-founder of Microsoft and the owner of the Interval Research’s patent, sued Facebook, Google, AOL, eBay, Apple, Yahoo, Netflix, Office Depot, OfficeMax, Yahoo and YouTube, as well as more other Companies which, according to Allen’s claims, have violated the IR patents that control the online trading. Although this isn’t walkers first time dealing with this sort of mess. Walker Digital was previously involved in litigation include suits against Microsoft, Facebook, and the interstate Powerball lottery.
Although the press that walker has accumulated appears to be negative, in comparison to Allen’s press, but walker digital is receiving loads of attention. Paidcontent.org speaks on the matter. “Walker has been dabbling in the world of patent-trolling for over a year now, but with no such fanfare; …. Now maybe he’ll get his turn in the spotlight: he’s filed 15 lawsuits against more than 100 defendants, including Microsoft, eBay (NSDQ: EBAY), Amazon (NSDQ: AMZN), Facebook, WalMart, Groupon, Apple (NSDQ: AAPL), Sony (NYSE: SNE) and Google.“ Although it appears that last week Walker Digital and Apple reached a possible patent licensing deal, as Walker voluntarily dismissed Apple from two of its lawsuits.
The recent Intellectual Ventures suits present just one example showing that the NPE (“patent troll”) business model is fast becoming dominant in the world of IP. Thomas Edison held over 1,000 patents, but practiced none of them. He invented, which is what he did best, and let others manufacture products from his inventions. If an inventor cannot sue for patent infringement and recover damages, then why should anyone invent anything? Only vigorous patent enforcement rewards inventors for their inventions and incentivizes others to invent.
References:
"Michael R. Loeb." Loeb Enterprises. N.p., n.d. Web. 8 Jul 2011. <http://www.loebenterprises.com>.
"An interview with Jay Walker." Charlie Rose. PBS: 17 NOV 1999. Television. 8 Jul 2011. <http://www.charlierose.com/view/interview/3991>.