The War over Patents on the Web: Who Owns an Idea?

Article excerpt

You won't find them in sleek trench coats, toting sensitive government files in chrome briefcases. Nor do they troll the Beltway in white SUVs with tinted windows. But the traditionally low- profile examiners at the US Patent & Trademark Office are suddenly playing a highly visible role as agents of the information superhighway.

Yet the limelight has not been kind to this under-funded, short- staffed group in Arlington, Va. Director Q. Todd Dickinson and his team of examiners have been accused of handing out patents on software technology like they were housewarming gifts: "Welcome to the Internet - here's your patent."

Severe critics, like Raymond Ocampo Jr., former general counsel of Oracle, Microsoft's chief software competitor, blame the patent system for proliferating economic war in cyberspace: the Internet's version of a nuclear arms race, where different companies build weapon arsenals by collecting as many patents as possible.

The debate climaxed several months ago when Amazon.com obtained an injunction against barnesandnoble.com for stepping on its claim to inventing "1-Click" purchases. Amazon's defenders and detractors disagreed on the legality of awarding a monopoly on a business method.

Below the surface, however, arguments edged toward the philosophical, questioning the need for a ferryman to control the electronic waters.

Until recently, case law put business methods outside the realm of machines, man-made products, compositions of matter, and processing methods - the four general areas of inventions patentable under US code. The question is one of semantics: Is a business method an invention and patentable, or is it an idea and therefore unpatentable?

A 1998 case in the US Court of Appeals, State Street Bank & Trust Co. v. Signature Financial Group, flatly concluded that there were no statutory grounds for opposing business-method patents. Coupled with the rise of e-commerce, this unleashed a flurry of applications. In 1997, the office granted 39 patents for business methods on the Internet. In 1999, there were 301 such grants.

To qualify for a patent, an invention must be new, useful, and nonobvious. Programmers, especially, say that maverick entrepreneurs and bullish company leaders are morphing old practices onto the Net and peddling them as novel. "Transforming data around in a way people did before, except doing it on the Internet, is always obvious," says Richard Stallman, a founder of the GNU/Linux free operating system.

For instance, priceline.com has a patent on the reverse auction, which some say has been the popular ploy of car salesmen for years. There's even a patent on a method of applying for a patent. Tim O'Reilly, president of O'Reilly & Associates, a leading computer publisher, says the equivalent in drug research would be a young medical student winning a patent on the mere notion of a cure for cancer, without actually developing a drug. …