The use of patent protection to grant exclusive rights in methods for transacting business, electronic and otherwise, is a relatively recent phenomenon, but one that has rapidly become widespread. Less than a decade ago, many legal experts would have considered patents such as these invalid, because business methods were believed to be specifically excluded from patent protection. In 1998, however, in State Street Bank and Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed.Cir.1998), the Court of Appeals for the Federal Circuit declared that business methods are not categorically outside the subject matter of patent. In other words, an inventive business method, like any other invention, could receive patent protection if the United States Patent and Trademark Office found it to be new, nonobvious, and useful. Please read this module on Business Method Patents Online to obtain an overview of what internet business method patents are and some examples of what business method patents have been issued.
Much of the criticism of the State Street Bank decision and business method patents in general has centered on the problem of patent quality and prior art. Patent examiners look closely at relevant publications, including scholarly articles, issued patents, and other printed materials, to see whether an invention is either non-novel or obvious. Many critics feel that in the case of business method patents, many invalid patents have been and will be continue to be issued. They assert that since business method patents have not been patented in the past, there is very little patent-related prior art readily at hand to examiners. Additionally, since knowledge about business method patents resides mainly in the practices and policies of the firms that use them, even common methods may not be documented in materials that an examiner would consult. What are people doing about this? Take a look at the “wanted” patents at http://www.eff.org/patent/. Can you think of anything you use now that would be covered by these patents?
Please read Amazon, Inc. v. Barnes & Noble.com, 239 F.3d 1343 (Fed Cir 2001). What do you think about this case? Do we want to issue patents like the one-click patent? It is important to note that when an inventor gains patent protection for a business method, he gains a limited right, granted by the federal government, to prevent others from making, using, selling or offering to sell an invention for 20 years from the date of filing of the patent application. With the sharp rate that the internet is growing, do you think this 20-year period is too long?
For views opposing the current business method patent system, please read this full article by Rochelle Dreyfuss. Do you agree with the author that business method patents impair the economy? Or do you agree more with this article by John Allison and Emerson Tiller (please just read the introduction) where it is argued that business method patents are of equal or better quality than other issued patents?
Finally, take a look here at recommendations for the Patent Office from the American Intellectual Property Association. The goal of these suggestions is that the law should not discriminate against business method patents, and should treat them in the same fashion as other patents. Do you think these suggestions accomplish this goal?