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January 3, 2006
Expanding patents
While the Supreme Court is wrestling with the issue of patents, the PTO seems to be actively expanding the scope of what can be patented. First, in September, the PTO (or more specifically the Board of Patent Appeals and Interferences) ruled that a business process need not be tied to a computer program in order to qualify for a patent (Ex parte Carl A. Lundgren). According to IP attorney Barry Schindler,
The Lundgren decision swings the door wide open for businesses to apply for patent protection for any novel business method. As a result, businesses should now seek U.S. patent rights for any unique business method covering every conceivable business operation, such as methods of billing clients; hiring employees; marketing products or services, such as financial services and banking products; or simply obtaining funding.
Meanwhile, a Washington area attorney - Knight and Associates - is pressing the PTO to issue "Storyline Patents" to cover the story plot:
Like software, a fictional story may include two valuable features: the underlying storyline and the particular expression of that storyline. Like software, the latter is clearly protectible under copyright law. And, like software, the former should be protectible under patent law.
And the Blackberry patent battle continues, as the Wall Street Journal reports (NTP Wins Time To File Defense In RIM Dispute) with NTP plotting its next move:
NTP shareholder and co-founder Donald Stout said that the company's lawyers aim to get their response filed before the 30-day extension is up. "We're not trying to slow it down," he said. "Our view is, let's get on with it. We want to go as fast as possible." Stout said the company asked for the extra 30 days to allow one of its experts to help craft the response.
Even if NTP's patents are all rejected, NTP still has the right to appeal within the patent office, a process that would take until late 2006, Mr. Stout said. He says that while he expects the patents to be rejected, he believes that NTP will be vindicated when it appeals through the patent office's Board of Appeals and Interferences.
The most recent issue of Business Week calls all this "The Patent Epidemic." They point to the lowering of the obviousness standard as the root of the problem:
How to determine when an invention is "obvious" is one of the most critical and contentious issues in patent circles. Over the past two decades, critics say, the hurdle for passing the obviousness test has been steadily lowered, and the U.S. is now awash in a sea of junk patents. Some are just plain silly, such as a patent for "a method [of] exercising and entertaining cats" (basically teasing them with a laser pointer), or another for "an animal toy that a dog may carry in its mouth" (which not only sounds suspiciously like a stick but also looks like one in the patent drawings).
But many perceive a serious threat. A coalition of businesses, including Microsoft (MSFT ), Cisco Systems (CSCO ), VF, Hallmark Cards, and Fortune Brands (FO ) has jointly filed its own brief in the KSR case asking the Supreme Court to take corrective action. Two dozen intellectual-property law professors have made a similar filing. Massive overpatenting, the professors say, "creates an unnecessary drag on innovation," forcing companies to redesign their products, pony up license fees for technology that should be free, and even deter some research altogether.
In the above mentioned case, Teleflex vs KSR, the companies are asking the Supreme Court to review whether a combination of two technologies is obvious (and therefore non-patentable) or novel (and therefore patentable).
KSR's defense is simple: U.S. law does not allow patents for inventions that are "obvious." Nothing could be more obvious, KSR says in court filings, than a combination of "preexisting, off-the-shelf components" that each perform "exactly the same function" for which they were originally designed. In essence, KSR's argument is that Teleflex may as well have patented the combination of the refrigerator and the light bulb. Rodger D. Young, Teleflex's attorney, counters: "The fact that Device A and Device B exist does not make it...obvious that they should be put together."
If this case is accepted by the Court, it will join a number of other patent cases under review, such as eBay vs MercExchange (see my earlier posting "patent litigation"). With patent reform legislation stalled in Congress, the Court may end up re-writing the patent law. Let us hope that they can strike the right balance: continuing to provide the protections needed to produce and utilize intangible assets while reigning in the overpatenting which threaten the Intangible Economy.
Posted by Ken Jarboe at January 3, 2006 10:46 AM
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