The US Patents Office has long been a standing joke around the world for awarding absurd patents that would be rejected out-of-hand in any other country. But now comes a new level of absurdity that’s directly targeting network marketing.

(One can only look forward to the day when some US-based opportunist applies for a patent on the process of breathing in and out sequentially. There seems little doubt that the drones at the US Patents Office will grant their application.)

Specialist MLM attorney, Gerald Nehra, reports today about lawsuits issued against several MLM companies for patent infringement, to wit, a patent on the process of rewarding channel partners for orders placed directly with a brand owner online.

In other words, if a distributor with an MLM company has customers who order directly from that company online, the distributor gets paid their entitlements on that sale.

Anywhere else, patents, copyrights, trade and service marks and design registrations are issued only for very specific implementations, not for ideas.

The US Patents Office is notorious for issuing patents that are, at best, questionable — like Amazon’s dubious patent on affiliate marketing. (Yes, Virginia, if you operate an affiliate program online you are probably in breach of Amazon’s absurd patent, at least in the USA. Fortunately, Amazon is not run by fools, so they’ve never attempted to enforce it.)

In any other country, patents offices consider issues like “prior art” — existing precedents — before even giving the time of day to a patent application. True to form, the US Patents Office appears to adopt the position that prior art, or state-of-the-art, is a separate legal issue that can be fought out in court by anyone taking exception to a patent being issued to some johnny-come-lately opportunist who tries to stake a claim to what others have been doing for years.

This is no different to the issuing of domain names in the USA. So domain squatting, hijacking and claim-jumping have been rife with US-based domain names from the beginning.

The ONLY real winners in these legal contests are the lawyers. These are battles that the combatants can barely afford to win, let alone lose. So how on earth does this kind of lunatic system come to be — or, worse still, allowed to continue to exist?

It may have something to do with the fact that the majority of law-makers are — you guessed it — lawyers (attorneys).

Patents Offices tend to be run by — yes, you guessed it again — lawyers (attorneys).

And judges are almost always former — amazing! You’re right again! — lawyers (attorneys).

Can you spot any kind of common denominators or possible “jobs for the boys” patterns here?

So what do we do about this lunacy?

If you live outside the US or its territories:

Don’t worry. This particular form of lunacy exists only in the USA. No other country would dare to try pushing the boundaries of intelligence and integrity to this extent.

Warning: Lawyers representing US patent holders constantly try to intimidate and bluff people and companies overseas in the hope that their bluff won’t be called and their victims will comply with their outrageous — and illegal — demands.

How do I know this?

Because I’ve been the intended victim, many times, in the past. But I fight back — I write to them, pointing out that they’re either incompetent and ignorant, or else they’re guilty of attempted blackmail, and asking them which it is, because I plan to publicize them and their attempted bluff, long and loud, online and offline, in my national business columns.

For them, it’s like pulling the pin on a hand grenade and handing it to me, only to have it tossed back to them. Not very smart.

(These days I seem to be left well alone by these rapacious parasites. It’s a fairly small world that they operate in, and word soon gets around.)

If you live in the USA or its territories:

1. Pray that your company isn’t like Avon® or several other companies that have succumbed and taken out licenses from these legalized predators and parasites.

2. Get organized! Team up with others to pressure your congressional reps and Senators to change the way the US Patents Office operates, and introduce some sanity to the process. And keep it up! Research shows that it can take as few as 8-9 handwritten letters to change a lawmaker’s position. (Not emails, circular or pro-forma letters. They must be hand-written, by individual constituents.)

3. If you operate an affiliate program, you WILL be targeted for patent infringement, sooner or later, because ALL affiliate programs based in the USA infringe this ludicrous patent. Count on it. These leeches will sool their lawyers onto affiliate merchants, en masse, once they’re have the case law awards or the compliant victims, in order to license their proprietary solution to every merchant in the USA.

Get active and organized to fight this NOW! Once the demand letter from the attorneys arrives, it will too late for you to get organized.

An alternative solution: set up an offshore business, outside US jurisdiction, to handle all affiliate sales, orders and payment processing. (And don’t make the mistake of hosting your merchant site on US-based or owned servers!)

Think this is over-the-top? Think again!

Here’s proof that they’re targeting network marketing companies:

http://www.reshare.com/papers/mlm.jsp

Author Profile  Consults to managements of direct selling companies, small business and home business owners. Writes regular columns and feature articles for various business media, online and offline. Author of several best-selling business books. Presents seminars and workshops, webinars and other training programs. Creator of Fourth Generation Thinking, Selling, Business Systems. Read more from this author