Opinion and Response

HAVING HIS SAY

Beware Divine Followers

Roman Martynenko, chief financial officer of San Francisco-based Web services provider Ecofabric, on the continuing threat of patent-infringement lawsuits:

For some catalogers, the apparent demise of lawsuit-happy Divine ended concern over being sued for allegedly violating e-commerce ownership rights. According to the overly optimistic, running e-commerce operations no longer marks a company as a target for patent infringement litigation.

While it is true that Divine, having declared bankruptcy and under suspicion of possible criminal violations, is no longer capable of shaking down online marketers, if you're celebrating an end to Divine-like interlopers fishing in your revenue stream, put the champagne back on ice.

Industry observers believe that legal action alleging patent infringement against online catalogers may reoccur sooner rather than later. John Ferrell, an attorney with Carr & Ferrell, a law firm in Palo Alto, CA, told the San Jose (CA) Business Journal that the “Internet landscape is littered with valuable patents” leading “to an increase in patent-related lawsuits.” All that's in doubt is the identity of the next to bring litigation.

The Divine shakedown of Web marketers exposes just some of the new and poorly understood risks of doing business online. Among these risks are unpredictable and escalating costs; vulnerability to patent infringement litigation; hacker attack and theft of customer data; and an inability to comply with proposed Internet sales tax, antispam, and other often ill conceived legislative schemes emanating from both state legislatures and Congress.

Combating these risks means dedicating considerable inhouse resources to run your Internet operation or seeking outside help. If you opt to outservice the development or management of your e-commerce site, obviously you need to choose your service provider carefully. You want to find a vendor whose incentives are aligned with your business.

Case in point: E-business software/services providers Multimedia Live, Fry, and my company, Ecofabric, have assumed responsibility for settling Divine claims or are sheltering their clients by using patent-compliant technologies. If a provider is not willing and able to deal with such threats, find one who is.

If wise heads prevail, Internet historians will look back upon the Divine scare as a wake-up call that motivated the industry, with the help of well-qualified e-business providers, to finally devise a comprehensive and integrated business strategy that defends against litigation shakedowns, minimizes exposure to Internet risks both known and unknown, and enhances revenue generation. To such an end, we should dedicate our efforts.

Catalogers Get Bookish

It seems everybody is writing a book these days, and catalogers are no exception. Home decor cataloger/retailer Pottery Barn has come out with three books: Pottery Barn Living Room, Pottery Barn Bedrooms, and Pottery Barn Bathrooms. The books, according to the catalog's copy, promise to “help you find your own personal blend of comfort and style” with photographs, step-by-step guides, and advice. The tomes cost $24.95 each, or $60 for a boxed set of the three.

And in a bid to help businesses, Ann Arbor, MI-based gourmet foods cataloger/retailer Zingerman's is now selling Zingerman's Guide to Giving Great Service. The new book claims to reveal how Zingerman's treats its customers like royalty, “from going the service extra mile to valuable tips on hiring service-oriented staff.” The 20-year-old marketer is no stranger to sharing its customer service secrets with others…for a price. Zingerman's nine-year-old ZingTrain training division offers two-day “Art of Giving Great Service” seminars for $850. Note: The new book will set you back a mere $12.

Lands' End Founder Backs Global Warming Studies

It's nice to see that catalog billionaire Gary Comer is putting his money to good use. The founder and former chairman of apparel and home goods cataloger Lands' End has been giving generously to researchers studying abrupt climate change, which some believe are related to global warming.

Comer, who founded Lands' End in 1963, sold the catalog to Sears, Roebuck & Co. last year, receiving more than half of the $1.9 billion cash price. According to a July 17 cover story in The Wall Street Journal, Comer began doling out some of his millions after experiencing unusual ice conditions on a cruise through the Northwest Passage two years ago. Since then, Comer has given $1 million to the Woods Hole Oceanographic Institution and some $7 million to fund several climate-change research groups.

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