September 19, 2002 | Read Time: 4 minutes
Kintera, a company in San Diego that leases software that helps nonprofit organizations raise money online, has submitted 13 patent applications to the United States Patent and Trademark Office. The company says it is only trying to protect its intellectual property. But some in the nonprofit world worry that Kintera is trying to patent online fund-raising techniques that charities were using well before the company was founded in 1999, and then use the patents to dominate the e-philanthropy market.
The patent office has published four of Kintera’s patent applications on the office’s Web site. Company officials say those applications are for two features of its fund-raising system: Friends Asking Friends, which allows a charity volunteer to send e-mail messages to friends asking them to visit the volunteer’s personalized Web page and make an online gift to the charity the volunteer serves; and the Honor Roll, a section of the volunteer’s personalized Web page that is updated in real time with the names of donors and the amounts of money they contributed.
The company declined to discuss the nine patent applications that the patent office has not published.
Harry E. Gruber, Kintera’s chief executive officer and a medical doctor by training, says that patents help companies attract capital, talented employees, and customers — all of which would help Kintera as it works to build “economies of scale” in what he describes as the “fractured” e-philanthropy market.
“Our whole purpose in this is to drive down the cost of fund raising by having more and more people use the same technology, built at the highest possible standards,” says Dr. Gruber.
But it is the prospect of that kind of consolidation that has alarmed people like Darrow Zeidenstein, a senior consultant at Marts & Lundy, a fund-raising consulting company in Lyndhurst, N.J.
Mr. Zeidenstein worries that if one company or a small group of companies wins sweeping patents in online fund raising, innovation will slow and the dearth of competition will push the price of such technology beyond the reach of smaller nonprofit organizations.
He says that many of the techniques included in Kintera’s patent applications, such as sending e-mail fund-raising solicitations and using Web pages to track campaign results, were in widespread use before Kintera existed.
“What they’ve done is try to claim that all these things together represent a novel business practice, and they want patent protection for that process,” says Mr. Zeidenstein. “I don’t think that’s fair.”
Kintera denies that it is attempting to patent processes it did not invent.
“We are very careful,” says Ephraim Feig, the company’s chief technology officer. “We are not patenting anything that people were already doing. We are patenting innovation.”
Company officials point out that Kintera is not the only entity to apply for patents related to fund raising and philanthropy. A Chronicle search of the patent office’s databases, using the term “fund raising,” found 26 pending applications and 63 patents granted between 1996 and 2002.
Not everyone in the nonprofit world thinks that such patent applications threaten the development of online fund-raising tools.
Patent applications can seem scary because of the way they’re written, says Bob Ellsworth, a technology consultant in Washington who has worked with Network for Good, a nonprofit online-donation site, the AOL TimeWarner Foundation, and the DotOrg Foundation.
Mr. Ellsworth says that patent applicants often start with a very broad claim and then say, “Well, if we don’t get that, then we’re trying to invent this smaller slice of that, and if we don’t get that, a smaller slice of that.”
He adds, “When a patent is actually granted, it generally looks a lot different than when it first started out.”
Dr. Gruber, Kintera’s chief executive officer, believes that the company’s patent applications have caused a stir because many people in the nonprofit world do not understand the patent process. He also thinks that people are interested because Kintera is the “new kid on the block” and has raised a substantial amount of venture capital — almost $27-million since the company’s inception three years ago.
“There’s a lot of money that stands behind Kintera, so it’s a big force, and they want to know if it’s a force for goodness,” says Dr. Gruber.
Kintera officials insist that it is.
“Are we going to sit back and watch if our competitors blatantly copy our product and blatantly infringe? No, but you know what, we’re not going to be overly aggressive,” says Michael A. Rahman, the company’s chief patent officer. “We’re not going to be bad players. We’re going to be good corporate citizens.”
To read four of Kintera’s patent applications, go to http://appft1.uspto.gov/netahtml/PTO/search-bool.html, and search on the term “kintera.”
