In 2003, Gary Kremen, Mike Zapolin and I acquired the assets of Electric Classifieds, Inc. (Gary’s old company) for “several thousand” dollars and legal costs. Electric Classifieds had sold their technology to Match.com, where Gary was a founder, but eventually went defunct after a few years circa 1997. The buried treasure? U.S. Patent 5,706,434. See alsoGoogle Patents

What is U.S. Patent 5,706,434?

If your technical and legally minded you can read about it at Google Patents or the USPTO. The patent covers several seminal Internet technologies that had not yet been fully realized in 1995.

Beside several claims surrounding email protocol and transfer, the patent covers HTML web pages served using data pulled from a relational (SQL) database.

So any company that stores customer or product data and serves it up dynamically to a user with a login is using the IP of this patent. Examples: Login to your online banking account and retrieve your account information, purchase history at Amazon.com, email from Gmail. Vast infringement. While the company was defunct its patent became THE standard for serving up web pages and email communications.

What happened? Before we could use the assets of Electric Classified to pursue licensing deals we had to put the assets up for public auction. Nathan Myhrvold’s company, Intellectual Ventures, showed up at the auction and purchased the patent at a premium to what we had paid. Dr. Myhrvold is the former CTO of Microsoft and under his leadership Intellectual Ventures had gobbled up a lot of patents in the past few years. Stay tuned for that story…

We made over 10x on the money invested in the transaction but it was the toughest check I ever had to cash.