In March, Q. Todd Dickinson, Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent and Trademark Office,
announced a new initiative to ensure that patents granted for software-implemented
business methods are of the highest quality and benefit to the growing
electronic commerce industry.
In remarks to the San Francisco Intellectual Property Law Association
Conference on Electronic Commerce and Internet Issues, Dickinson revealed
the details of a new Business Method Patent Action Plan. Among the highlights
of this action plan are to formalize a customer partnership relationship
with the software, e-commerce, and Internet industry and enhance quality
management in the patent application process.
noting that e-commerce related patent applications had doubled between
1998 and 1999, stated that the issue of patentability of such software
patents, while a continuing matter of public discussion in some quarters,
is firmly established legally. "The patentability of software has continued
to be upheld, " Dickinson said, "therefore the role of the USPTO is to
ensure that the patents issued are of the highest quality, and that means
doing the best job that we can."
aspects of the Action Plan include a new formal customer partnership with
the software, electronic commerce, and Internet industry; enhanced training
of patent examiners; a new second-level review of all Class 705 (business
method patents) applications; and the convening of a roundtable forum
with stakeholders on the issues surrounding this technology area.
The brouhaha over this issue really got going when Amazon.com founder
Jeff Bezos was issued a patent for Amazon.com's [NASDAQ:AMZN] one-click
ordering process. (United States Patent 5,960,411 Hartman, et al. Sept.
28, 1999: "Method and system for placing a purchase order via a communications
network".) Some technology pundits have noted that patents are creating
monopolies that will make it more difficult to compete with Amazon.com
[NASDAQ:AMZN] or Priceline.com [NASDAQ:PCLN]. The pundits are right, in
patents are supposed to create monopolies. The public policy bargain
of patents goes like this: If you invent something new, that's great.
We want everyone to be able to share it. But we also want to encourage
innovators to earn a profit from their inventions. So we'll make a bargain
with you: Tell us your invention - tell us exactly how to do it - so we
can share the benefits in the future. In exchange, you, the inventor,
get seventeen years of exclusivity. After seventeen years, we'll let other
people enter your market.
formal requirements of a patent are that the invention should be new,
useful, and nonobvious. But there's another procedural requirement that
can be used, conversely, to invalidate a patent. It's called the failure
to disclose the best mode. Patents usually cover a range of methods -
so the inventor is protected whether the underlying network transport
protocol is TCP/IP, or IPX/SPX, or NetBEUI, or GOSIP, or even a phone
call you get the picture. Patent applications try to cover the widest
range of possible uses so that competitors can be enjoined from making
trivial changes to the invention while claiming those changes weren't
contemplated in the original patent.
have clarified the concept during the past two centuries. Inventors can't
bury the "true" invention amongst a list of all conceivable variations.
Somewhere in the patent application, the inventor must reveal, to the
best of his/her knowledge, the precise procedure which is fastest, cheapest,
most efficacious, or, as we could say, best.
the computer world, how can an inventor document the "best mode" source
code? The "open source" software movement, which has reached a 21st Century
zenith with Linux, can trace its origin to the 18th Century notion that
innovations are best when shared. The Bezos patent, and most others of
its ilk, don't open up their source code.
complicating factor is Internet time. U.S. patents grant the holder seventeen
years of exclusive use. 17 years is a long time anyway, but it's much
too long on the Web.
USPTO needs to rework its policy for Internet business method patents.
Since the Internet seems to run in dog years - one year for a dog equaling
six for a human - let's apply that divisor and come up with a three-year
term for such patents. It's a fair balance between tradition and the pace
of contemporary economic development. The PTO also needs to push legislation
through Congress requiring open source disclosures as part of satifying
best mode requirements on patent applications. Finally, the USPTO needs
to adopt the international practice of making applications public - not
just issued patents - as required by Article 93 of the regulations for
the European Patent Office.
The USPTO isn't backing down. The legality of Internet business method
patents is no longer in dispute. If you have developed a technical innovation
for your e-business, keeping it "secret" isn't enough. Talk to an intellectual
property attorney. If you don't, your competitors will.