The New York Times :: Patents: Idea for Online Networking Brings Two Entrepreneurs Together
...Reid Hoffman, chief executive of LinkedIn, and Mark Pincus, chief executive of Tribe.net, considered the six degrees patent so valuable that they bid on it and won when YouthStream decided to auction it, saying it was not using it in its current business operations. They learned about it from Andrew Weinreich, a lawyer, who founded Sixdegrees.com in 1997 with a friend, Adam Seifer. YouthStream bought the company in 1998 for stock then worth $125 million.
Sixdegrees.com was a social networking company. Its name played on an idea by Stanley Milgram, a Harvard psychologist. More than 35 years ago, he suggested that all people on earth were connected by no more than six degrees of separation - that is, two people who did not know each other would find a link through no more than six people. His idea is not the subject of the patent; rather, it covers the software code for making it work in computer systems.
Mr. Weinreich said in a telephone interview that the six degrees business concept was ahead of its time, coming as it did a few years before digital cameras became ubiquitous. Thus, it could not offer what has become an integral part of the online dating game: photographs.
In addition to having started their respective social networking sites last summer, Mr. Hoffman and Mr. Pincus each own about 2.5 percent of Friendster, which they bought separately. Mr. Hoffman purchased his shares in September 2002; Mr. Pincus bought his in February. Discussing the patent, Mr. Pincus said he and Mr. Hoffman were "talking to Friendster about partnering, where they would pay to be a co-owner." No one from Friendster responded to several e-mail messages and telephone calls inquiring whether Friendster was interested in the matter.
Mr. Pincus said that he and Mr. Hoffman did not want to be perceived as "two investors gone astray trying to hold up Friendster for ransom." But they also did not want to get into a bidding war with Friendster's other investors, he said.
Even though Mr. Hoffman and Mr. Pincus bought the patent primarily as a defensive measure - to prevent another company from acquiring it and demanding royalties from them or putting them out of business - Mr. Hoffman said a number of their competitors were going to be surprised when they learned of the patent.
"The general attitude among entrepreneurial people is that they think that they were first and that there is no history to what they are doing," he said. "Both Mark and I had tracked six degrees as an intellectual precursor to our own businesses."
The six degrees patent is not the only one to have been issued covering aspects of social networking.
Tacit Knowledge Systems, of Palo Alto, Calif., has been issued at least nine patents for "knowledge systems" technology, which, patent disclosures suggest, touch on social networking. Tacit and In-Q-Tel, of Arlington, Va., a private venture backed by tax dollars to keep the Central Intelligence Agency abreast of the latest technology, signed a broad licensing deal in June to deliver Tacit's technology to selected customers in the United States intelligence community.
Nonetheless, other entrepreneurs like Mr. Brydon are skeptical that patents will play a significant role in shaping the social networking landscape, even though Mr. Weinreich, the co-founder of Six Degrees, is an adviser to visiblepath. "This industry is going to go in a thousand different directions," Mr. Brydon said. "I think we're going to find that many of the things being protected today are completely irrelevant a year from now." ...
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