Hothand Inc. has been awarded a patent for search, location services and mobile advertising all in one package on mobile devices.

The patent was filed in 2004, before most predicted the power of the mobile Web. Today this has become one of the hottest spaces in wireless and the battleground for some of the largest companies in the world.

“The patent’s claims are pretty broad,” said Michael Van Loy, an attorney at Mintz Levin Cohn Ferris Glovsky and Popeo PC, San Diego. “It is basically centered around the method for getting an advertiser to target ads to users that are interested in that advertiser and also it’s about getting a consumer local to your point of sale.

“Because of that you are effectively maximizing you ad dollars,” he said. “[And enablers are] charging a higher rate for a merchant that is getting that level of effectiveness.”

The patent will affect wireless carriers, mobile marketing and advertising, mobile coupon providers, search engines, advertising, location-based advertising, local directories (mobile and online) and technology providers. 

Currently, most search engines and mobile applications provide only location details and basic information.

Hothand realized the only way to get shoppers to return over and over again was to include ad space for merchant promotions such as mobile coupons and other incentives. Since the mobile ad offers vary, consumers are motivated to return. This increases the value and explodes the potential revenue.

Hothand worked closely with patent attorneys from the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. to develop a patent with wide applicability.

As described in a portion of the patent abstract:

The method involves receiving, from a database over a communication network, information for one or more merchants associated with the mobile device user information for the geographic location and the merchant type, and presenting the associated merchant information on the mobile device. The associated merchant information can include a merchant name, address and phone number, a merchant advertisement, merchant mobile coupons, or a merchant product or service offering to users of the shopping service.

Research firm IDC predicts a $2B market for location-based mobile marketing by 2012.

With this new patent, Hothand hopes to license or partner with the advertising, technology and mobile marketing companies.

“What it means for the mobile industry is it validates Hothand’s vision of mobile phone technology to use the mobile phone for commerce activities,” said James Cleary, attorney at Mintz Levin Cohn Ferris Glovsky and Popeo PC.

“The mobile industry should be very encouraged that a patent like this is allowed,” he said. “It lets companies share their innovation with the world.”