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Sign of the Times: Topps' Method of Trading Baseball Cards

The small pharmacy a mile from my childhood house was a frequent summer bicycle destination for me growing up. That's where my friends and I would go to buy packs and packs of Topps' baseball cards. I still remember opening a wrapper in 1978 to find a Pete Rose--while he was in the middle of his 44 game hitting streak. I hear that card in mint condition might fetch 20 dollars. (Mine--now bent and missing corners--maybe gets a buck.)

So it was nice to see a few weeks ago that Topps obtained its first utility patent in almost seven years (only its sixth utility patent in 30 years). Moreover, this is Topps' first patent that has nothing to do with chewing gum or candy -- it's...get this...a business method patent:

U.S. Patent No. 7,797,194

Method and apparatus for offering for sale collectibles on primary and secondary markets

Assignee: The Topps Company, Inc.

Issued: September 14, 2010

1. A method of facilitating an issuer of collectibles to manage an offering of collectibles for sale, each of the collectibles having a predetermined condition, said method comprising the steps of:
a) initially offering for sale the collectibles to potential purchasers for a period of time set by the issuer;
b) receiving orders from the ordering potential purchasers;
c) allocating the offered collectibles among selected of the ordering potential purchasers;
d) facilitating steps a), b) and c) by a programmed computer; and
e) maintaining the condition of the collectibles during steps a), b) and c), whereby the allocated collectibles are of the predetermined condition and the issuer may guarantee the condition of the allocated collectibles,
wherein step b) offers an initial offering of collectibles, and there is further included the step of offering for sale selected of the allocated collectibles on a secondary market at the direction of the purchasers of the allocated collectibles.

Commentary: Great. I suppose this means that my kids may not be trading actual baseball cards: instead, they'll be trading futures in baseball cards. Then again, if "personal seat licenses" are now the norm for ticket holders, then why not introduce children to similar concepts early on, right? At least it gets them to think of these cards as the investments they really are, rather than just things to put in your bike spokes so they will make cool ratchety noises. (Sorry, Pete.)

Of course, there's one immediate shortcoming, in my opinion. The patent talks about an "IPO" for a card ("Initial Player Offering") and buying multiple cards for players expected to increase in value (e.g., you may want to buy many Derek Jeter cards "if you believe that Derek Jeter will become the best shortstop of all time," says the patent). That's a great tool to teach kids about buying and holding stocks, but what about selling short? There's apparently nothing in Topp's system that allows me to sell you the Stephen Strasburg card I don't have.

Topps No formal drawings. Even the figures look like they were drawn by 11-year olds.

Bilski. Does this even need mentioning? Actually, the Examiner did reject several claims for failing machine-or-transformation, but other claims somehow survived. Given the recent PTO's recent pronouncements on interpreting KSR, however, I'd think that step d) here might not overcome an obviousness rejection.

Seven Appeal Briefs, No BPAI Decision. The claims in Topps' patent application were given their first final rejection in 2001. But as hard as Topps tried to appeal those rejections, it just couldn't make it up to the Board. The first two attempts resulted in the examiner reopening prosecution with new grounds of rejection. Then there were two defective briefs. Then a substitute brief kicked by the Board because it was not considered by the Examiner. Then another defective brief. Then another brief that reopened prosecution with a new rejection -- which was overcome, resulting in allowance. I suspect the Examiner was simply worn out by this point. Or Topps' counsel takes lessons from the Swamp King.

Filed five months too early? Topps' application was filed in January 2000. Unfortunately, Patent Term Adjustment only is allowed for applications filed after May 29, 2000. With over ten years from application to issuance, that would have been over seven years of "B" delay, alone (assuming there was no applicant delay--you can check that for yourself). But here is is the real travesty of all those failed appeal attempts: under the older Patent Term Extension--which applied to this application--had Topps received a favorable appeal decision from the BPAI, then it would have received extra term dating back to the Notice of Appeal. But without any decision on the merits by the Board (even though the Examiner reconsidered his rejections several times), the term is a flat 20 years from filing.

Adding even more insult to injury, Topps had successfully petitioned to make the application special, resulting in an accelerated examination. Despite, these efforts, in hindsight Topps would have been better off dropping this app in favor of a continuation after the first final rejection in October 2001.

Derivatives. Anyone care to create an options exchange for Topps?

UPDATE 10/20/2010: I'm informed that Topps actually has a commercial service based on the teachings of this patent, called etopps.

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