The New Yorker on Business Process Patents

caledon writes "The New Yorker has a clear, concise, nontechnical essay by its finance columnist James Surowiecki criticizing business process patents: Patent Bending. 'Although we have always had a vibrant patent system, we've managed to strike a balance between the need to encourage innovation and the need to foster competition. As Benjamin Day, Henry Ford, and Sam Walton might attest, American corporations have thrived on innovative ideas and new business methods, without owning them, for two centuries. In the past decade, the balance has been upset.' Makes the argument persuasively."

Comments

Case Law and Congress's answer

[Dan Berlin]

Cert. was denied in State Street Bank in 1999.
That's why it's still good law.
The Supreme Court has smacked down CAFC on quite a few occasions when they produce completely strange opinions.
This happens because CAFC seems to have a bunch of judges who think patents are god's gift, and that everything should be patentable under the sun, and a bunch of judges who think that patents should be strictly limited and enforced.
I find myself agreeing with about half the decisions, and vehemently hating the other half.

In this case, however, you are correct, and the Supreme Court thought Congress should do something about it.

Which they did.
They passed the "Intellectual Property and Communications Omnibus Reform Act of 1999".

It contains the so-called "First Inventor Defense." This defense provides a first inventor (or "prior user") with a complete defense in patent infringement lawsuits, whenever an inventor of a business method (or prior user) uses the invention but does not patent it.

The argument against software patents

[heironymouscoward]

(Sumamrized from a lecture by Richard M. Stallman).

The argument against software patents is made on three grounds:

1. the products of the software industry are so large and complex (because of the lack of physical constraints) that the scale of 'invention' is hundreds times greater than in the physical world.

2. patents are expensive (10k Euro in Europe) and rarely can small businesses or individuals afford to aquire them.

3. even when people overcome point 2, they find that the large patent portfolios of large companies render their patents useless.

Conclusion: large companies purchase patents in order to protect not their inventions, but their competitive advantage. Since innovation comes from smaller teams, patents thus work against innovation.

Software patents exaggerate what is a manageable problem with physical patents, and turn it into a serious problem for smaller designers. Basically patents allow large businesses to collaborate with burocracy to create barriers against the entrance of smaller groups.

This is bad, corrupt, and economically stupid.

End of argument.