Patent Lawyers And Business Model Patents: Perfect Together

from the think-they-have-a-bias? dept

With all the discussion concerning problems with the patent system, it's no surprise that we often get patent lawyers contacting us, claiming that we misunderstand patent law. We have spent plenty of time discussing things with them, and the summary always seems to boil down to a tautology: "the patent system works fine, because it works." However, as we see case after case where the patent system is clearly stifling innovation and rewarding those who either failed in the marketplace or chose not to compete at all, what's become even clearer is that the patent system works for patent attorneys. They make a killing off of the system, and have every incentive in the world to keep it as is -- even to the point of rationalizing all sorts of reasons why the system "works" in the face of increasing evidence that there are real problems with the system. There's a concise article over at that points out that making business model patents legal (such as the one Netflix is now threatening Blockbuster with) was almost entirely the work of one specific patent attorney. Almost no one had been pushing for business model patents, but the judge who wrote the decision allowing such patents had been one of the patent attorneys who helped draft the patent law it relied on (the article doesn't mention him by name, but it's Giles Rich). In his decision, he claimed that it was "Congressional intent" to allow business model patents -- which he should know if he helped draft the law, which is why he's sometimes referred to as "the father of the patent system (though, it makes you wonder why he was presiding over this case). Unfortunately, that very same judge had written elsewhere that there was no real Congressional intent in the redraft of the patent law. They had been too busy to think about it, and simply turned it over to the patent attorneys (such as himself) to draft the new law as they saw fit. So, we have a patent attorney, who stands to greatly benefit from getting more patents out there writing the law -- and then later being the very judge who said business model patents were perfectly legal.

Meanwhile, if you think this is only a US-based issue, that may not be true for long. Simon Hart, who was involved in the case, alerts us to a new patent ruling in the UK, that also touches on the issue of business model patents. While the decision in the US noted there was no such thing as a "business method exception" to patents (claiming such a concept was obsolete), such an exception does still work in the UK -- and is apparently used quite frequently to reject questionable patents. However, in this latest rulling, the judge appears to have made something of... well... an exception to the business model exception. He recognized that it could be possible to allow a patent for business models if the business model is simply a component to the overall business, rather than an entire description of the business. If this sounds both confusing and potentially problematic, there are probably plenty of patent attorneys out there who are willing to start using this new loophole in the UK to push through some fun new patents there as well. In other words, it doesn't look like things are going to get better any time soon.
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  1. identicon
    Anonymous Coward, 6 Apr 2006 @ 2:29am

    That UK decision this article refers to...

    That UK decision isn't confusing at all, it's actually one of the clearest cases to come out of the UK courts in a long time.

    The point was that the invention this guy was trying to patent was "useful" in business but wasn't a business method. The argument the applicant used was that a telephone is useful in business, but no-one would say that a telephone was a method of doing business. The judge accepted this and highlighted other cases refused by the UK courts (eg a method of trading stocks) or refused by the European Patent Office (a method of running an auction) which were correctly refused as being methods of doing business. Things which really are methods of doing business are still, thankfully, routinely refused by the UKPO and the EPO.

    However, even though this guy managed to persuade the courts that his idea wasn't a business method, it was still rejected. It was a computer questionnaire which worked out what forms you needed to fill in to incorporate a company based on answers you gave it. This was considered to be a purely mental process and the fact that it was done on a computer didn't make it patentable (the US would take the completely opposite view). The application was therefore refused for being nothing more than computer implementation of a mental act.

    By the way, I am a patent lawyer, but I'm a patent lawyer in the UK and think that TechDirt is right to criticise current US practice: the inventive step barrier is set way too low for one thing and the USPTO has to find documentary evidence to make any objection. BUT, TechDirt do get their facts wrong sometimes. Even when you're right, it's important to know why you're right or the people who disagree with you will walk all over you.

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