In a move which may have big implications for the incentive industry, a couple in Utah are suing Starbucks and Apple for patent infringement for selling giftcards at a bricks-and-mortar retail store, which are then redeemed online.
As described here:
“James and Marguerite Driessen of Lindon, Utah say they developed in 2000 (and successfully patented in February 2006) a utility dubbed RPOS, or retail point of sale, for Internet merchandising. The concept, which forms the heart of the infringement lawsuit, would allow gift cards for pre-defined items that can be sold at a brick-and-mortar store but used online; customers could redeem a card for a dining room set or a DVD, for example.”
When Apple released iTunes Custom Cards, allowing customers to buy a specific artists album or songs, the Driessens asked Apple to license their patent. In response, Apple pulled the cards from the US, but kept them in the UK.
However, in November 2007, Apple launched the Digital Release Album, a gift card again tied to a specific song or album, and designed to be sold in Starbucks for download in store.
“Starbucks is said to be a complicit partner in the infringement as a willing distributor, selling the cards across the US and holding its “Song of the Day” promotion to encourage purchases of the allegedly infringing iTunes cards.”
As well as illustrating the ridiculousness of being able to try and patent a retail model, and the patent trolling which seems to dominate the US technology sector, it may hamper the development of incentive gift cards for specific online purchases.
But in many ways, buying a gift card at a retail store for online redemption is a complete inversion of the logic of retail-online transactions. Surely it would be much better to use an online transaction to gift an item, that the recipient can then choose to have home delivered, go and pick up at a store, if they desired?
This would offer the ease of use and reporting capabilities of an online system with the instant gratification that the retail shopping experience offers.