Almost exactly a decade after filing his patent application for a “System and method for competitive pricing and procurement of customized goods and services,” William (Bill) Gindlesperger received approval.

The true value of such intellectual property isn’t established until it is licensed to users or determined by successful infringement litigation. Gindlesperger, founder and president of e-LYNXX Corporation, believes it to be worth billions of dollars.

The patent is specifically designed for “customized goods and services” or those where precise specifications are defined at the time of purchase. The list to which Gindlesperger believes it applies include: “commercial print, construction services, direct mail, labels, machined parts, marketing materials, product packaging, temporary staffing, textiles, transportation, trucking, and more.”

(Download a PDF of the patent, if you’re interested in reading the details.)

The Gindlesperger Method

According to the e-LYNXX announcement the patent covers any electronic system for procuring customized goods or services that automatically matches supplier attributes with contract specifications to identify qualified suppliers, disseminates a bid solicitation to at least two identified suppliers and receives and forwards a bid response to the buyer.

The patent allows for a buyer to maintain its own qualified supplier base, obtain optimal cost reductions by establishing an environment in which the supplier is permitted to sell its excess capacity by bidding high, low or not at all without regard to buyer pricing expectations, without setting a precedent for its next bid price and while ensuring inclusion in the next bid opportunity on which the supplier is qualified.

The Method incorporates an online system that handles the five major steps of an electronic commerce system used for procuring customized goods and services:

1. Vendor base selection and management
2. Job estimating, specification writing, review, and approval
3. Solicitation distribution, bidding, and award
4. Job production management, quality control, and contract compliance
5. Invoicing, payment, and cost allocation

The patent application concludes that “the buyer can create and manage large multiple vendor pools to obtain the benefits of competitive bidding based on contribution pricing, while enhancing administrative productivity, production quality, and contract compliance. In this way, the invention enables the buyer to overcome the limitations of prior art systems and methods in escaping the ‘iron triangle’ of quality, timeliness, and cost.”

Who Might Be Affected?

In early 2007, WhatTheyThink began a series with a report titled “Print Brokering, Print Management, Business Process Outsourcing (BPO) - What’s the Difference?” that described processes used by a handful of companies providing print procurement and management services.

While we at WhatTheyThink do not offer legal advice and certainly don’t want to target any company as a potential patent infringer, the processes used by several of the companies highlighted in the report resemble those described in the Gindlesperger patent.

In its S-1 filing, for example, Innerworkings describes its services this way:

We are a leading provider of print procurement solutions to corporate clients in the United States. Utilizing our proprietary technology and database, as well as our extensive domain expertise, we create a competitive bid process to procure, purchase and deliver printed products as part of a comprehensive outsourced enterprise solution and in individual transactions.

Our technology is designed to capitalize on excess manufacturing capacity and other inefficiencies in the traditional print supply chain to obtain favorable pricing and to deliver high-quality products and services for our clients.

Our proprietary software applications and database, PPM4™, create a fully-integrated solution that stores, analyzes and tracks the production capabilities of our supplier network, as well as quote and price data for each bid we receive and print job we execute.

We leverage our technology to match each print job with the supplier that is optimally suited to meet the client’s needs at a highly competitive price.

By leveraging our technology platform, our clients are able to reduce overhead costs, redeploy internal resources and obtain favorable pricing and service terms.

Two other companies, launched by Innerworkings’ own founder, Eric Lefkofsky, are built on similar service platforms: Echo Global Logistics and MediaBank.

In its own S-1, filed with the SEC on April 30, 2008, Echo Global Logistics offers logistics services following a similar model to that of InnerWorkings.

We are a leading provider of technology enabled business process outsourcing (BPO) serving the transportation and logistics needs of our clients. Our proprietary technology platform compiles and analyzes data from our diversified network of over 16,000 transportation providers to efficiently serve our clients' shipping needs and optimize their freight management.

Our technology enables us to identify excess transportation capacity and obtain preferential rates, service terms and cost savings for our clients. We provide solutions across all major transportation modes, including truckload (TL), less than truck load (LTL), small parcel, inter-modal, domestic air, expedited services and international.

Our core logistics services include pre-engagement freight analysis, rate negotiation, shipment execution and tracking, carrier management, routing compliance, freight bill audit and payment and performance management and reporting, including executive dashboard tools.

We believe our ability to identify and utilize excess capacity solves a long-standing transportation industry problem of failing to match demand with available supply and benefits both our clients and the carriers in our network.

Through our proprietary technology platform and the real-time market intelligence stored in our database, we are able to identify and utilize transportation providers with unused capacity on routes that our clients can employ.

Our proprietary technology platform, Evolved Transportation Manager (ETM), allows us to analyze our clients' transportation requirements and provide configurable solutions that often result in cost savings of 5% to 15%.

Our clients communicate their transportation needs to us electronically through our EchoTrak web portal, other computer protocols, or by phone. Using pricing, service and available capacity data derived from our carrier network, historical transaction information and external market sources, ETM analyzes the capabilities and pricing options of our carrier network and recommends cost-effective solutions.

MediaBank, also founded by Lefkofsky and on whose board of directors he serves, offers a solution labeled X|G Suite – Media Buy/Sell Exchange. The product description from the MediaBank website says:

MediaBank X|G is a robust, real-time platform that enables publishers and media properties to efficiently sell and advertisers to effectively buy media.

The architecture is a clustered, redundant environment adhering to world-class financial exchange technical best practices. Pricing features include:

• A unique, patent-pending multi-tiered pricing engine


• Support for Dutch Auction, Fixed Price and Reverse Auction


• Pricing model reflects demand and volatility

A key feature of the system is the ease within which buyers are able to find relevant advertising opportunities. As such, the X|G allows advertisers to input dozens of criteria to pinpoint just the right opportunity.

With the open market of MediaBank X|G, advertisers increase their buying intelligence and maximize their return on ad spends, while publishers and media companies have a flexible platform on which to sell premium and other inventory.

All three companies are based on fragmented industries with excess capacity and, through the application of specification and “bidding/pricing” technology, the service buyer is able to identify and select the most cost effective provider.

The Other Shoe

The recent announcement of the patent award leaves the question open as to whom Gindelsperger will approach for license fees, but it is implied that he will be doing so. Anthony Hawks was named vice chairman and chief legal officer of e-LYNXX corporation in early November and he is positioned to license “use of this patent … for any entity that buys customized goods and services.”

Watch this space, there are sure to be ongoing developments!

Some Previous Infringement Suits

Patent infringement suits are lengthy and expensive for both parties, and the end result is never definite. WhatTheyThink has followed several infringement suits over the last few years, each of which is an interesting case study.

For a little history, check out these reports and articles:

A Patent for Books On Demand? An Inside Look at ODMC versus Lightning Source, Amazon & Ingram (the patent was overturned in this decision: PDF ~1MB)

Inside VistaPrint’s Patent Infringement Suit, Comments from Robert Keane and an IP expert (the patent was declared invalid in Europe by the German Federal Patent Court, however VistaPrint is expected to appeal.)

Editor's Note: e-LYNXX has responded to our this story. Read the response here: e-LYNXX Patent – e-LYNXX Corp Responds