I Can't Believe It's Patented!

By SmallBusinessComputing Staff | Posted July 01, 2001
by Robert J. Wagman

Is it possible to patent good old common sense? No, but many common-sense business methods have been successfully patented, and some people are hopping mad about it.

Back in January, we reported that a United States District Court in Washington state issued an injunction barring www.barnesandnoble from using Amazon.com's one-click method, which had been patented as a business method. Here's the latest. The U.S. Court of Appeals for the Federal Circuit overturned the injunction in February, noting that Barnes and Noble had "mounted a substantial challenge to the validity of the patent." The case was sent back to District Court, where it will be heard in September.

The Patent and Trademark Office (PTO) has been widely criticized on Capitol Hill for issuing overly broad business-method patents to Internet companies. Reps. Howard Berman (D-Calif.) and Rick Boucher (D-Va.) have introduced H.R. 1332, the "Business Method Patent Improvement Act of 2001," which would make it more difficult for applicants to patent business methods specific to the Internet, and would also make it easier to challenge such patents.

Janice Mueller, assistant professor of patent law at John Marshall Law School in Chicago, expects many more patent-law cases in the next few years. "The Amazon patent was one of the first [Internet patents] issued," Mueller says. "They are now beginning to flow out of the PTO, and many will end up being challenged in the courts. This litigation is going to be around for many years."

The 1998 case State Street Bank & Trust Co. v. Signature Financial Group Inc. set the precedent for business-method patents in the U.S. The court upheld a patent issued for a data- gathering and -tracking method, declaring there should be no "business-method exception" to U.S. patents, because such methods are "useful and tangible inventions."

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