The Multiple Unconstitutionality of Business Method Patents: Common Sense, Congressional Consideration, and Constitutional History

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Business method patents are of sufficiently doubtful constitutionality that the Supreme Court should either render them void or, at the least, require a clear Congressional fact finding that they are likely to promote the "Progress of ... [the] Useful Arts." (1) Four separate arguments support this conclusion. First, common sense shows that patents on business methods do not promote progress. Second, Congress has not considered whether business method patents are likely to promote progress. Third, "useful arts," as that phrase is used in the Constitution, does not include mere commerce. Lastly, the historical background of the Intellectual Property Clause (2) demonstrates that the ratifying generation would have considered business method patents abusive of the basic rights of Englishmen. The ratification background and the history of early patent practice also support argument three.

Consider the following hypothetical patent:

I claim:

(1) A method of doing business comprising:

(a) loading trade goods on a vessel in a port of the northeastern American continent;

(b) without voyaging to either the British Islands or the European mainland, proceeding with this vessel to a port in China and there selling the trade goods and acquiring other merchandise, and;

(c) without voyaging to either the British Islands or the European mainland, returning the aforementioned vessel to a port of the northeastern American continent. (3)

(2) The method described in claim one, where the vessel takes on furs on the Northwest coast of North America on its way to China. (4)

(3) The method described in claim one, where the vessel is below 175 tons burthen. (5)

(4) The method described in claim one, where the vessel's return voyage is financed, at least in part, by a loan from a creditor in the Chinese port, with the vessel or its cargo serving as collateral. (6)

These business method claims probably would have been novel, useful, and not obvious to a person of ordinary skill in the art of international trade (7) in 1780. (8) However, would these claims have stated patentable subject matter under the Patent Act of 17907 That act allowed the Patent Board to grant protection to "any useful Art, Manufacture, Engine, Machine, or Device, or any improvement therein...." (9) Competition demonstrates that no such patent was issued, even though the China Trade was a matter of great pride in American entrepreneurship, perhaps being "the quintessential business innovation of the 1780s...." (10)

We have good reason to doubt that such patent claims would have been issued -- not just because the Board had discretion to deny patents, (11) but also because business method patents seem outside the 1790 understanding of either the Patent Act or the enabling clause of the United States Constitution: "business" was not considered among the "useful arts." (12) These hypothetical claims seem, in fact, quite close to the then-current archetype of an abusive "monopoly," (13) allowable, if at all, only after individualized legislative scrutiny. The seemingly uncontroversial nature of the Intellectual Property Clause affirms that the ratifying public did not read it as to allow exclusive rights to trading companies, i.e., odious monopolies, i.e., business method patents.

The above arguments rest on history. Additionally, common sense suggests that business method patents are unnecessary and anti-competitive, and, therefore, unconstitutional because they do not promote the progress of the useful arts. "Promoting progress" is a limit on Congress' patent power, which renders extremely unwise decisions unconstitutional. The constitutional limitation may not be avoided by claiming power under a more general clause, such as the Commerce Clause. (14) The Necessary and Proper Clause is also unavailable because it may not be used to negate constitutional limits or to empower Congress to pursue a goal not entrusted to the federal government. …