Steve Jobs licensed Amazon’s one-click patent for $1M in one phone call
qz.com
qz.com
Scott Forstall tells that Steve always insisted on paying for lunch for both of them every time they ate in the company cafeteria together.
Scott felt bad about making Steve wait for him at the checkout if he ordered something customized that took longer to prepare.
However, Steve insisted because he was paying by swiping his employee badge which automatically debited against your next pay period.
Since Steve was paid in stock, with only a one dollar a year salary there was nothing for the company accounting system to debit against, so although he was "the man" at Apple he took a perverse pleasure in simultaneously sticking it to the man.
Culturally, he was a hacker--looking for the gaps in institutional systems and getting a perverse pleasure in exploiting them.
Steve Jobs' personality had a large role in pushing his success, but it's also the type of personality of someone who just wants to be different because they think being different is superior (and yes: sometimes it is, sometimes it isn't). If he were a kid in the 90s he'd be ~~ tYpInG aLl hIs ImS lIkE tHiS ~~
iMac, iPod, iPhone
"I feel for Google – Steve Jobs threatened to sue me, too.
In 2003, after I unveiled a prototype Linux desktop called Project Looking Glass*, Steve called my office to let me know the graphical effects were 'stepping all over Apple’s IP'. (IP = Intellectual Property = patents, trademarks and copyrights.) If we moved forward to commercialize it, 'I’ll just sue you.'
My response was simple. 'Steve, I was just watching your last presentation, and Keynote looks identical to Concurrence – do you own that IP?' Concurrence was a presentation product built by Lighthouse Design, a company I’d help to found and which Sun acquired in 1996. Lighthouse built applications for NeXTSTEP, the Unix based operating system whose core would become the foundation for all Mac products after Apple acquired NeXT in 1996. Steve had used Concurrence for years, and as Apple built their own presentation tool, it was obvious where they’d found inspiration. 'And last I checked, MacOS is now built on Unix. I think Sun has a few OS patents, too.' Steve was silent.
And that was the last I heard on the topic..."
so this is one example in which Jobs's poor decision making didn't pan out as he had hoped.
* To see a Looking Glass demo, click here – it starts at the ~2:00 minute mark.It was one "few days work" demo somebody threw around when they first were able to manipulate windows in 3D in a compositor with Java, but it got traction in parts of the OSS blogosphere/forums as some revolutionary new desktop experience (even though there were already several similar commercial offerings, and itself was little more than some little-thought 3D manipulations and in no way an actual full SUN project).
It was touted as "SUN innovation" example, and predictably, it got nowhere.
Here it is in all its glory. Even then it was a derivative, no-sense concept: https://www.youtube.com/watch?v=u1JwfgBv5bg
I've seen the same story play out several times.
E.g. there was a node.js based editor that was the talk of HN for a while. Got nowhere, was just a simple editing window + crude syntax highlighting, and it was obvious from the start that it wont go anywhere with its direction and chops, but not if you heard the gasps just because somebody powered an editor with Node:
https://news.ycombinator.com/item?id=2020673
Or the Lighttable editor -- itself being abandoned for the next shiny endeavor, which again makes sense as it was just some inline REPL touches on top of a crude editor. At least that explored the design space a little, but the promises where touting it as the next thing that will revolutionize programming...
I have no idea of what "really happened", but my layman's interpretation of how that went down is...
- Make a great thing w potential.
- Kickstarter it.
- Rush to meet the KS deadline.
- Get frustrated. Abandon it.
- Take VC money to take "the next step" (Eve)
- Spend VC millions over X years, release some ideas in WIP repos, nothing holistic or truly practical.
- Fold.
- Then go to work for a proprietary Database Tools Vendor who will implicitly inherit any learning made during the previous projects.
Sadness and "loss" everywhere. If I was a VC in that early deal, I'd be pissed when Looker "finally releases" Eve as some middle-ware BI system.
We don't know if this license helped Apple sell so many products that it paid back the investment.
For Amazon it obviously worked out on two fronts, since they also got paid 1M. Unless you mean that this has to be weighed against lost Apple product sales on Amazon? Were Apple products even for sale on Amazon at the time?
He's referencing that other ecommerce sites (e.g. walmart) couldn't just say "oh, one click buying is a good idea, and an obvious one, so we'll implement it too". By having Apple pay significant money for right to use the patent, it adds validation that it isn't a frivolous patent, and actually a useful, non-trivial, non-obvious solution which warrents being licenced.
It gave Amazon much better ground to file patent infringement against any competitor that attempted a 1 click checkout solution without licensing the patent, both improving chance of further licensing and reducing the chance competing ecommerce platforms would implement the feature without licensing it through Amazon.
So, when Apple actually paid money to Amazon, what occurred to me at the time, was that Apple had in a single stroke both added some legitimacy to the Patent, and probably got a discount on the deal because they were the initial customer. It's unclear whether the one-click behavior on IOS made use of any the processes described in the 1-click patent, but, at the very least, it didn't hurt that Apple had it in their back pocket.
All in all I think it was a win-win scenario for both parties.
I suspect a lot of deals are done this way. Joe talks to Kevin and legal sets it up. Done in a heartbeat, just in case. Whether it worked out or not...who knows but Apple went full speed ahead selling and didn't end up in court battles. (yeah, they might have won but it's just $1 mil)
The 1-click patent didn't have a great deal of credibility at the time. Many people in the tech industry were railing against Amazon and 1-click. It seemed like such a stupid patent and I think a lot of people didn't expect it to hold up.
Apple launched the iTunes store with $0.99 mp3's during the same period and the whole thing hinged on 1-click shopping. You could click a button to preview and there was one right next to it that would buy the song. No confirmation screens or checkout process. Downloaded and added to your library. It was so easy and people were spending a fortune on there because there was nothing else like it. Keep in mind this is one the heels of the decline of Napster and other mainstream P2P apps. People were being ratted out by their ISPs, sued and settling for $3000 for downloading some crummy song. Here you could do it legally and inexpensively and with a great UX because of 1-click. And for the first time you could buy a single song instead of an entire album. Prior to that, we had "singles" that contained a radio song from the album and a couple b-sides for like $5-8.
Apple had to launch iTunes with 1-click for it to be successful. The $1M license fee cost far less than the inevitable lawsuit would have. They made a fortune with iTunes and used it to enter new product categories. You could argue that that was one of the pivotal moments that transformed the company into what it is today. That licensing fee was highway robbery.
You also have Amazon who, at the time, had an outstanding selection, the best prices, fast handling times, reliable shipping and the most friction free buying process anywhere. Many retail sites didn't even have user accounts back then. You would enter your info with each order. The ones that did have accounts still made you click through several screens to place an order.
Amazon's end of the deal is they got paid $1M to not have to sue anyone (and possible lose) and have their ridiculous patent become credible overnight. The result was they maintained their superior online shopping experience by preventing others from mimicking it and leveraged it to become the beast they are today.
Also, it would be nice anyway to have an adjustable brief cooling off timer on an order, so is a nice implementation idea regardless of the one click patent.
Everyone has it now. I wonder if they got as good a deal as Apple did. We all expected someone big to fight that patent. Apple basically said “f- this” and took the easy way out even if it meant everyone else would get screwed. One of the few times Apple had first mover advantage.
As far as design patterns for purchasing go, I would say it is probably more optimal than a simple one-click, if optimising for both the buyer and seller's interests. One-click is more optimal if you are only optimising for the seller.
As a rule of thumb, people trying to sell you a thing are unlikely to give you extra time past the "I need to buy this" impulse to decide not to buy it.
In the EU, the consumer has the right to cancel any order or return any purchase, for any reason, within 14 days.
So in the EU, you already have that extra time in law.
Given that, from a retailers perspective, having a timer could actually make commercial sense, as the cost from lost sales could be balanced out by a reduction in cancelled orders and returns.
It may make commercial sense anyway, out of customers liking the feature and that translating into goodwill over time, but that would be much harder to put a figure on.
I'm sure I've made plenty of purchases where a big ticking "Are you sure you wanted to do that, Dave?" undo button might have worked but it wasn't worth it for me to go through the effort to return or refund.
They also tried patenting a method to reduce power consumption of a chip by reducing voltage. Something that isn't just a law of nature (thus unpatentable) but was also used decades before ever since ICs were developed (thus "prior art").
One of the most controversial patents is the "rectangle with rounded corners". This was a design patent and these in general are usually not just very hard to enforce but also stupid in most cases.
1. A method of unlocking a hand-held electronic device, the device including a touch-sensitive display, the method comprising: detecting a contact with the touch-sensitive display at a first predefined location corresponding to an unlock image; continuously moving the unlock image on the touch-sensitive display in accordance with movement of the contact while continuous contact with the touch screen is maintained, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device; and unlocking the hand-held electronic device if the moving the unlock image on the touch-sensitive display results in movement of the unlock image from the first predefined location to a predefined unlock region on the touch-sensitive display.
As you can see if you watch the video carefully, that older device had no feedback regarding how to unlock, and whether the unlock even worked. It makes it a more confusing, hard to use device. Hence a new patent that fixes those limitations makes sense.
Good find. Wouldn't anyone be able to bypass by simply not having a "continuously moving image", just the suggestion to slide and a button that disappears while sliding?
“Oh competitors who copy everything we do, even sometimes in cargo cult fashion... we didn’t patent this. Please don’t copy it.”
If they don’t not only will they get ripped off (losing the benefit of their good/unique design) the competitor may patent the feature and then Apple would have to spend millions of dollars and years to overturn the patent and hopefully get attorneys fees.
It sucks, but it’s a perfectly sane business decision. They open themselves to liability if they don’t.
As for the one-click payment system that helped build both their online stores, the US patent to that expired in September 2017.
I could understand allowing a months-long patent of this kind, but 18 years seems about an order of magnitude too long.
(Also it's a joke)
edit: The more I think about it, I wouldn't be surprised if someday in the not distant enough future this is the way 90% of all commerce happens.
And "Amazon" replied:
"Hello, Steve, my name is Adrian, I will be happy to help you."
Seriously, it is not like he cold called "Amazon", he already knew whom to contact exactly, had already met the relevant executive (or the CEO) personally many times, etc., etc. , and the actual deal was probably closed after several weeks of meetings, a formal legal review and what not.
Sure, though the article literally says that Jobs "called up Amazon", not Bezos.
Besides the (hopefully) quick laugh, what I was trying to say was that the private/direct phone number of Jeff Bezos is unlikely to have been on a public directory and that the (untold) before is that the two already knew each other personally and had most probably already done business together, the telephone call is only a tiny part of how the deal matured.
There are a lot of these articles that somehow push the concept that some people (geniuses/leaders/etc.) made quick decisions/deals/whatever game changing innovations on the spur of the moment and were successful at that only because of serendipity or intuition.
While this may happen, I doubt that - even if the initial sparkle came "by chance" and "suddenly" - the merit of the success of this or that deal is to be attributed to that moment alone (as opposed to the before and the after).
More like T. Edison:
Genius is one percent inspiration, ninety-nine percent perspiration.
Just metonymy --- when we use an inanimate thing to stand in place of a person (like "North Korea agreed to a cease-fire", which is metonymy because the abstract concept of a country doesn't "agree to" anything).
> what I was trying to say was that the private/direct phone number of Jeff Bezos is unlikely to have been on a public directory
Doesn't need to be public. These high-level people (CEOs, famous musicians, etc.) have easy ways to contact one another. They might have only met once and exchanged numbers "just in case", or maybe the story was a shorthand way of saying "Steve had his secretary call Bezos's secretary right then" (which is entirely possible to do spur-of-the-moment if Apple had ever had contact with Amazon at all). I think the spirit of the story --- that the call took a very short time, maybe a couple minutes --- is totally reasonable.
Tim Cook told a story once that he was unsure what to do at some point with regard to shareholders or something, so he called up Warren Buffett. Apparently they had exchanged numbers once in the past when they had been at some event together or something like that. It was a spur-of-the-moment call without any phone tag, at least as Cook tells the story.
I know, but you cannot use it "asymmetrically" in a case such as this.
Apple may metonymically call Amazon, but if the call (and the deal) is initiated by Steve Jobs, the call (and deal) is received by Jeff Bezos or by one of his top executives.
BTW there is an evident need for symmetry also for the "merit" of the fast decision/acceptance by the receiving party, you cannot incense the one making the fast, direct and serendipitous proposal and then hide the one (person) on the other side that so quickly accepted it (for 1M $) under the metonymy.
>Tim Cook told a story once that he was unsure what to do at some point with regard to shareholders or something, so he called up Warren Buffett.
Yep, he didn't call up Berkshire Hathaway.
You absolutely can.
Setting: a restaurant. Steve is another employee.
"Hey, did Steve take the bill to the ham sandwich?"
This is 100% acceptable. Just because you don't use it doesn't mean it's unacceptable. For more on metonymy and examples of it, check out the book "Metaphors We Live By". There are a few chapters devoted to real-world uses of metonymy, and this is absolutely common among native English speakers.
Also, do you have something against using the letter y for the "kit" vowel? I've never seen spellings like "simmetry" or "metonimy" before in any dialect. (Honest question.)
> Yep, he didn't call up Berkshire Hathaway.
Is it so unbelievable that wealthy people might have met once and exchange phone numbers? What use would Berkshire Hathaway be for him? He wanted advice from Buffett directly, not some other person, nor the company as an entity.
Also, your argument doesn't make any sense anymore. Why is it that you feel Tim Cook has to call Berkshire Hathaway (company) and not Warren Buffet (person), but you think that Steve Jobs called Jeff Bezos (person) and not Amazon (company)?
Only typos, sorry, corrected.
>Is it so unbelievable that wealthy people might have met once and exchange phone numbers? What use would Berkshire Hathaway be for him? He wanted advice from Buffett directly, not some other person, nor the company as an entity.
Not at all unbelievable, actually very probable, I was only pointing out how you didn't use the metonymy in your Tim Cook example.
Oh, my mistake! I thought maybe it was like how British people spell things differently from Americans, and maybe this was another thing along those lines. Apologies.
> I was only pointing out how you didn't use the metonymy in your Tim Cook example.
Oh I totally misread that. Apologies again.
Metonymy is not compulsory in any case, but it does serves a specific purpose when it's used. Metonymy is used to draw attention to a person's (or maybe group of people's) identity through an inanimate object. You might talk about the "first violin" in an orchestral setting, but "Jane" (the violinist) when talking about her dreams and aspirations in school. It's just used depending on context and desired mental imagery.
In the Steve Jobs case, it was Amazon that held the one-click purchase patent, so it makes sense that he would call Amazon. Additionally, it may not even have been Bezos he needed to talk to. Maybe it was some other executive or something. The fact that it might have been Bezos is not the important thing, so metonymy is used to say "Steve wanted to acquire this specific thing from Another Company".
In contrast, Tim Cook called Warren Buffett specifically because of his skills as an individual. Calling Berkshire Hathaway wouldn't have made sense because the company doesn't have that knowledge. If Cook had wanted to hire consultation, then he might have called Berkshire Hathaway, but as it was he was talking to a specific individual for personal financial advice.
Anyway, back to the Steve Jobs case, remember that he wanted not only to talk to the entity that held the patent, he also wanted to make a 1 million $ proposal for acquiring the license and wanted an immediate reply, so he needed to talk to someone with enough power to accept the proposal and to accept it immediately, so that would be very specifically be either Jeff Bezos or a top Amazon executive with those powers (and the guts to close such a deal directly on the phone without telling the boss), there is no contrast with Tim Cook wanting to talk specifically with Warren Buffet.
Consider that a million dollars to either Steve or Jeff back in the late 90's was rounding error. Also, consider the history of the one-click patent[1]
So let's say that Steve and Jeff hadn't ever met or talked before. Steve is in a discussion with people at Apple and the subject of one-click comes up and Steve thinks 'we need that!'. Not having Jeff's number, Steve gets Amazon's main number off their web site calls and says 'This is Steve Jobs... I need to talk to Jeff'[2] Maybe the person at Amazon takes him at his word, maybe there's some verbal jousting involved, but after a few minutes he gets through to Jeff. Now they're on the line with each other and Steve pitches licensing the patent for Apple. Jeff says 'sounds good, let's do it.' [3] Now, at this point both of them probably hand things off to their staff and say 'get this done' and lots of activity occurs to dot the i's and cross the t's.
This is not outside the realm of possibility. For example, Warren Buffet is known to have done much larger deals with people he's never met in a surprisingly short period of time.[4] Sure, there's usually due diligence done[5] that is more drawn out during which the details are fleshed out. But an actual (large dollar) deal can get done (i.e. agreed to in principle) with less time/energy involved than many of us invest when spending a few hundred dollars.
So that's a very long-winded way of saying: for most people (i.e. hired guns) it doesn't work that way, but when you're the founder/owner it can if you want it to.
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[1] I'm not sure if you were around/paying attention when the one-click patent happened but there are a few things I remember: 1) it was not a very popular patent to many outside Amazon 2) it was not clear whether or not the patent was even valid 3) there was a lot of hand-wringing about if it was granted it should only be used for defensive purposes (i.e. that it might be fine to get it as a defense against patent trolls but that Bezos shouldn't try to monetize it.)
[2] Not unheard of or even out of character if you believe half the stories told about Steve like the time he supposedly walked into General Motors HQ for an impromptu meeting with their then CEO, Roger Smith... who took the meeting. Reasons why he might take this kind of meeting range from 'I'm bored.. why not' to 'the balls on this guy... this should be good for a laugh' to 'this guy might be a good contact to have down the road.' Also, if you've ever worked for a 'don't you know who I am?' kind of boss, this type of behavior is entirely believable at face value as you've likely lived it.
[3] Maybe Jeff is thinking that having Apple endorse the patent strengthens it and that's a good thing, maybe he thinks that the patent is a dead end and Steve's offering some easy money so what the hell, maybe he's looking at the bigger picture in terms of developing a deeper relationship with Apple. Who knows, but he has several potential motivations.
[4] http://fortune.com/2016/11/02/warren-buffett-berkshire-hatha...
[5] Except when it's not. Like back when eBay 'bought' Skype... except they forgot the IP which was the valuable part. Or Theranos. Or Madoff. etc. etc.
If Steve Jobs wants to get in touch with Bezos (lets assume no prior contact) he would ask his PA to "get me a call with Bezos" - The PA then reaches out to Bezos' PA and they arrange the call between them