Amazon Patent Approval May Cause Trouble For Barnes & Noble

Yesterday, Amazon, Inc. AMZN was granted a patent filed in 2006 on e-readers with secondary LCD displays. The patent specifically gives Amazon rights over: "A handheld electronic device comprising: a housing; an electronic paper display disposed in the housing and having a first surface area; and a liquid crystal display (LCD) disposed in the housing proximate the electronic paper display, the LCD having a second surface area that is smaller than the first surface area of the electronic paper display." As Engadget has reported, this has the potential to cover much more than Amazon's Kindle. Barnes & Noble, Inc. BKS sells its own e-reader, the "Nook," which could very easily be described by the above patent description. That might spell major headaches for the company, as it would mean that Amazon could sue Barnes & Noble for violating its exclusive patent and force it to stop selling -- or at least significantly alter -- the Nook. The patent essentially allows Amazon to corner and dominate the e-reader market, which will likely be a boon for its earnings. It could also force other e-reader makers like Barnes & Noble back into R&D, as well as negatively impact their earnings due to lost sales, legal expenses and higher investment spending needed to develop a different product.