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First published: November 27, 1999

Pressing Patent Suit May Backfire on Amazon.com

DATELINE–New York

In what might be the most bizarre marketing stunt of the dot com era, the mammoth bookstore chain Barnes and Noble apparently tricked rival Amazon.com into a well-publicized patent dispute.

Amazon Inc. filed suit against Barnes and Noble on Friday of last week claiming the retail chain’s online store meticulously copied Amazon’s “1-Click” express checkout system. Both “1-Click” and Barnes and Noble’s “Express Lane” systems allow online customers to make multiple purchases without having to re-enter credit card information.

Just one month ago, Amazon founder Jeff Bezos was awarded patent No. 5,960,411 for a “method and system for single-action ordering of items in a client-server environment.” Because most e-commerce sites use similar processes to store the credit card information of return customers, the patent-infringement law- suit immediately raised a ruckus among leading e-tailers. The consensus among industry insiders is that the lawsuit has little or no merit.

Barnes and Noble Vice President of Marketing Jack Servon greeted the news of the lawsuit with characteristic aplomb. In an interview with Wired News, Servon was pleased to note that Amazon had substantially boosted traffic to barnesandnoble.com just by “spelling our name correctly” in a press release announcing the lawsuit.

“By suing us, Amazon is admitting that our service is just as good if not better than their own – we couldn’t buy better publicity,” crowed Servon, who added, “They might as well try to patent leather shoes.”

What he neglected to mention to the press, however, was that the patent lawsuit had in fact originated inside his office at Barnes and Noble headquarters.

In a brilliantly conceived marketing ploy which could make or break his career, Servon “leaked” rumors that Amazon intended to take legal action against his own company. Some analysts believe these rumors prompted the Seattle-based behemoth to file the actual patent infringement suit. Amazon refused to comment on the origins of the suit.

Barnes and Noble, a division of Bertelsmann A.G., has been sharply criticized in recent months for its lackluster foray into the online shopping market. In an industry where a name is literally an address, the company has waffled between identifying itself as bn.com and barnesandnoble.com. Lagging far behind Amazon in hits and sales, barnesandnoble.com posted an $8 million loss in the last quarter alone.

When Servon learned from Barnes and Noble’s in-house counsel that Amazon had been awarded a patent for a commonly used Web technology, he sensed opportunity in the air. Rather than retreat from a possible confrontation, he cooked up a scheme to lure his competitor into prosecuting what most consider a ridiculous legal action. And if media reaction to the lawsuit is any measure, Servon’s gambit has been an unqualified success.

“If Servon did goad Amazon into suing B and N, he deserves extra stock options,” observed Dennis O’Keeffe, an analyst with Forrester Research. “The suit makes Amazon look like it’s opposed to progress. It’s as if Ford put a patent on a machine that can take people from one place to another.”

Investors appear to agree. Amazon’s stock closed yesterday at 82 3/4, down 10 points.

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First published: November 24, 1999

Gore to Quit Vice Presidency, Campaign Full Time

DATELINE–Nashville, Tenn.

Vice President Al Gore Jr. is on the eve of announcing that he will resign to devote more energy to his lagging presidential campaign. Sources close to the Gore campaign say the vice president may make his plans to leave office public as early as Dec. 1.

The prospective resignation was first reported last week by Internet journalist Matt Drudge. According to Drudge, publisher of The Drudge Report, Gore’s team had floated the possibility of resigning months ago, but the candidate refused to consider the option seriously at that time. Unnamed sources from the Gore team told Drudge that the vice president’s lackluster performance in the polls and former Sen. Bill Bradley’s unexpected surge in popularity have forced Gore to take drastic steps to preserve his presidential bid.

Just six weeks ago, Gore relocated his campaign headquarters from Washington, D.C., to Nashville, Tenn., in an effort to shake his Beltway insider image. But as rival Bradley secures endorsements from such Democratic party luminaries as former Cabinet member Robert Reich and AFL-CIO President John J. Sweeney, Gore continues to struggle to define his candidacy.

If Gore does resign his position as vice president of the United States, President Bill Clinton will be empowered by the 25th amendment to appoint a successor. It will be only the second time in U.S. history that a sitting vice president has removed himself from office. In 1973, then-Vice President Spiro Agnew resigned as part of a plea bargain in a tax evasion case. Gerald Ford was appointed by President Richard Nixon to finish Agnew’s term, and, upon Nixon’s resignation, went on to become the first unelected president of the United States.

The Gore campaign sees the resignation as a way for the vice president to be relieved of his largely ceremonial duties, so he can spend time traveling the country and “reintroducing himself” to voters nationwide. But many political analysts wonder whether even such a bold move can salvage Gore’s presidential prospects. “This is either the smartest move the old Al Gore ever made, or the dumbest thing the new Gore 2.0 may well do,” says David Gergen, a longtime journalist and adviser to presidents of both political parties.

To counter expected criticism that Gore is abandoning his sworn duties for personal gain, the vice president’s handlers are spinning the move as a fiscally and politically responsible decision. “Vice President Gore has to be flown around the country in Air Force 2 at the taxpayers’ expense,” intimates one staffer, “but private citizen Al Gore will foot the bill for his own transportation, security, and staff.” President Clinton is said to have settled on a short-list of potential replacements for Gore. Current Secretary of Labor Alexis M. Herman purportedly tops Clinton’s list of prospective appointees. If appointed, Herman would, in the event of Clinton’s death or incapacitation, become the first black and the first female to hold the nation’s highest office.

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First published: November 20, 1999

High School Students Sabotage Security Bar Codes

DATELINE–Austin, Texas

In the wake of the Littleton, Colo., massacre at Columbine High, schools around the country are rushing to beef up security on campus. In addition to metal detectors, armed guards, and anger-management workshops, some schools are adopting bar code technology to keep track of students.

Bar coding students has proved to be far cheaper and much less intrusive than stationing police officers on campus in Austin, Texas. At Austin High, one of the 300 schools nationwide to add bar codes to student identification cards, students are now required to wear safety badges at all times.

Teachers and security guards at the school employ a hand-held scanning device based on Palm Pilot technology to take attendance and monitor hall access. Each ID bears a student’s unique class schedule, emergency contact information, and disciplinary records. Or so school officials thought.

On a Tuesday afternoon in the first week of October, a fight broke out in the Austin High library over the use of an Internet terminal. But what normally would have been a brief dispute quickly escalated into a carrel-clearing melee because of the number of students present. When the fight broke out, over 80 students were crowded into a space designed to accommodate no more than 40 students at one time.

When the students were hauled down to principal P.G. Piper’s office to be disciplined, administrators were astonished to find out that according to their IDs, all 80 of the students were assigned to the same “free reading period.” Normally only 10 to 15 of Austin High’s best students receive the privilege of an unmonitored study hall.

“It quickly dawned on us that our problems were much more serious than a simple student-to-student altercation,” Piper recalls. “Such a high number of students assigned to free study could only mean that someone had infiltrated the bar code security system.”

That someone turned out to be a junior by the name of Quiqui (pronounced kee-kee) Martinez. A disciplinary case with poor grades in all subjects except math, Martinez used his home computer and one of the school’s own photo scanners to crack the new bar code system. The computer savvy prankster then created a series of “get out of jail free” bar codes that, when affixed to official student IDs, would permanently excuse students from participating in gym class and qualify them for several consecutive periods of unsupervised “study” time.

Rather than personally distributing counterfeit IDs, Martinez simply posted the bar codes, along with instructions for their manufacture and use, on AOL. The Web page was eventually yanked in response to complaints from Austin High, although not before hundreds of students had downloaded one of the 25 different bar code profiles created by the enterprising Martinez.

School officials have not yet been able to determine the extent to which their new security system has been compromised by the fake bar codes. Martinez, who was expelled in the wake of the incident, now has a lawyer and is suing Austin High.

“The school district put the safety and well-being of its students in the hands of a computer system,” argues Martinez’s attorney Nick Blackbridge. “And then it tries to cover up its mistake by sacrificing this young man’s future. Quiqui Martinez is entitled to free speech, even if that speech takes the form of a bar code.”

The administration of Austin High has refused to comment on the Martinez suit. However, officials are currently debating whether to continue using the bar code system or to scrap it altogether in favor of on-campus police.

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First published: November 10, 1999

FAT OF THE LAND: First in a Four-Part Series

DATELINE–Atlanta

Marketers are calling it Generation XL.

According to a report issued by the U.S. Centers for Disease Control last week, the number of obese Americans rose nearly 50 percent between 1991 and 1998 to 17.9 percent of the population. But if public health officials are alarmed by this epidemic of fat, big business has taken the new trend in stride.

From redesigned home furnishings to flexible razor blades, companies are finding ways to cater to the 47 million Americans who are now significantly overweight. Spruce Brugmann, a senior analyst with Bain & Company, has been tracking the consumer goods industry for the last decade. Brugmann predicts that over the next 20 years, most manufacturers will be forced to focus on the needs of obese consumers.

“Call it the largest common denominator,” says Brugmann, “[the obese shopper] is the one unfragmented demographic that cuts across all geographic, class, and gender boundaries.”

Meghan Crabtree, a buyer for the Pottery Barn furniture and home accessories chain, agrees. Her employer has begun to restructure its inventory to compensate for the growing body mass of the average consumer. “You’ll see softer angles in the sofas and chairs we sell,” she says. “At the same time you’ll see more dressers with legs – no hard-to-reach bottom drawers.”

But it’s not just furniture that will be retooled for Generation XL. A larger “larger” population will need heftier elevators, more tensile textiles and elastics, springier flooring, shoes that offer greater support, and bigger school desks, to name only a few of the products currently being refit for a fat future.

While companies like Canada’s Ample Stuff have been selling plus-size home accessories such as towels and coat hangers for years, mainstream manufacturers may make such specialty retailers obsolete as the average size of products quietly increases. Because no industry can afford to overlook a full one-fifth of the population, large portions, expanded dimensions, and increased payloads are fast becoming the norm.

Economists estimate that in conjunction with e-commerce, the growing demand for a “supersized” infrastructure will drive economic growth well beyond the year 2020. Such estimates take into account factors associated with increased rates of obesity: mainly, a reliance on automobiles, an expansion of suburban sprawl, and the increase of personal computing at work and home.

Clifford Barrett, a public health researcher at the CDC, links the remarkable change in body size to a shift in working conditions and other economic factors. “People who work longer hours, who don’t have time to eat right, who drive to work and back because they’re in a hurry, and who don’t have time to exercise,” says Barrett, “that’s who falls into the obesity cycle – and, frankly, that’s almost everybody.”

In fact, last week’s CDC report identified “environmental pollution” as a factor contributing to the obesity epidemic, linking poor air quality to a sharp decline in the practice of outdoor exercise. According to the CDC, the acceleration of sprawl and an increase in commuting has put more cars on the road and discouraged the development of pedestrian amenities like sidewalks. That in turn has led to an even higher level of pollution, which encourages even more people to confine themselves to their cars and homes.

“It used to be that busy people got around a lot,” explains Barrett, “but now with online shopping, e-mail, and overnight delivery, we’re swapping out legwork for keystrokes. And that’s bound to have as big an impact on the body as it does on the economy.”

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First published: November 3, 1999

Rubber-stamp Voting Complicates Mayoral Ballot Count in San Francisco

DATELINE–San Francisco

An odd twist in the last-minute write-in campaign by Supervisor Tom Ammiano has done more than slow the ballot count in the San Francisco’s contentious mayoral race – it has called into question the very validity of the city’s election process.

San Francisco voters hit the polls en masse Tuesday, and the above-average turnout may have been the result of a controversial get-out-the-vote effort launched by grass-roots supporters of Ammiano, the gay stand-up comic who currently serves as the president of the San Francisco Board of Supervisors. The high turnout, focused in the Castro and other Ammiano electoral strongholds, could translate into a spot for the leftist candidate in the Dec. 14 runoff election.

That is, if the Department of Elections decides to count a significant and unusual portion of the “write-in” vote.

Go Tom Go, the ad hoc committee formed to catalyze Ammiano’s last-minute campaign, had pinned part of its hopes on an innovative strategy: the use of rubber stamps. The organizers’ plan – supplying voters with custom-made rubber stamps to help them “write in” Tom Ammiano for mayor – may have gotten their man elected. Or it may have made all those stamped write-in votes count for naught.

Ammiano had declined to enter the mayoral race at the August filing deadline to be on the November ballot, citing the difficulties of competing against the sizable war chests of the other candidates. But in a stunning turnabout, Ammiano announced in October that he would join the fray as a write-in candidate. Opponents who at first thought Ammiano was simply testing the waters for a future mayoral bid are now fuming at the prospect that the rubber-stamp vote may have gained Ammiano a space in the upcoming runoff election.

“While the law allows flexibility in counting write-ins, we feel that the voter, and not a rubber stamp, should make their intention clear,” says Clint Reilly’s spokesman, Tom Pier.

Ammiano supporters disagreed. “It’s hard enough to get people to vote, let alone write down someone’s name,” explains Ben Walters, an Ammiano backer who worked the polls in the city’s southern districts. “And for the record, we also handed out pens.”

George Madrazo, spokesperson for the San Francisco Department of Elections, says use of the rubber stamps has raised a fundamental question. “If a rubber stamp is used, the name is not technically written on the ballot,” he notes. The Department of Elections faced criticism before the election when it announced that ballots with “Ammiano” and not “Mayor Tom Ammiano” would be accepted; the department is struggling with a decision on whether the rubber-stamped ballots will be counted, Madrazo says, but the rubber-stamp controversy involves more than mere abbreviation. “‘Rubber-stamping’ suggests approving something without considering it,” says Madrazo. “Frankly, we have concerns that the voting process, which is a very personal thing, has become unduly impersonal and coerced.”

Actually, the term “write-in ballot” itself is bit of a misnomer in San Francisco. According to county election law, write-in candidates are required to file papers with the city to establish eligibility for election. Only ballots inscribed with the names of declared candidates are counted in official election tallies. If an undeclared candidate is written in for mayor, the vote is null and void.

Neither Mayor Willie Brown nor his primary support group, the Campaign to Re-elect the Mayor, has issued an official statement on Ammiano’s rubber-stamp tactics.

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