The link between patent law and billy goats | 2021
Patents, like bridges, are the main attractions to trolls.
But while their bridge-dwelling cousins have a taste for bailey goats, patent-linked trolls have a more expensive appetite for tech companies and their work. Trolls troll patents for intellectual property on the cheap, then demand spoils in the form of royalty payments or legal settlements from companies that make things that others are already buying. This tactic has become so popular and so effective that some tech companies are beginning to mimic it with their patent portfolios.
The proliferation of companies aggressively acquiring and litigating computer-related patents has led to calls for legislative reform. Meanwhile, the status of these patents ranges from perfectly legitimate to almost absurd. (In one notable example, patent owner Jim Logan sued several podcast creators, claiming that his 1996 patent for reading magazine articles aloud and distributing them via cassette tape meant he had a claim to the idea of any shared audio content being sent directly to the listener.) )
Software patents are undoubtedly important, because there are new and better software innovations yet to be invented. But patents on “working methods” are another matter. Many business style patents are little more than a hypothetical application or little challenge to a principle well established in some aspect of day-to-day commerce. Patents are supposed to protect real inventions, not just ideas. (Time travel would be cool. Maybe I’ll patent the idea of using a computer to power a time travel machine.)
For an immediate example, consider Amazon.com’s “one-click” ordering system. 1-Click is not only a registered trademark; Amazon has patented this process as well. At least, it has sought to do so, with varying degrees of success. Europe rejected the patent application completely. Ultimately, the Canadian Patent Office granted the patent, after courts ordered a re-examination of the initial patent denial. The United States granted the patent; When that patent was challenged, Amazon narrowed it down a bit, and the patent office re-examined the revised version and eventually approved it.
Why the differences between patent offices? It comes down to the nature of what Amazon sought to patent. If you think of Amazon as a large department store, one click is the equivalent of letting a customer say, “Ship it to my account and send it home.” Wealthy moms have said the same thing in physical stores for the past 100 years. All that was done with one click was to compress and combine several existing steps: entering your address, entering your credit card information, reviewing everything and clicking confirm. Amazon did not invent cookies (the way this information is stored), and the patent has nothing to do with the way the payment was actually processed. It was about eliminating redundant steps.
The idea of simplifying multi-step processes has been around forever. There was a particular movement toward efficiency in business a century ago, led by Frederick Winslow Taylor, whose followers included Henry Ford. Taylor’s ideas are credited with arriving at the principles of mass production that drove industrialization in the early 20th century. Today, efficiency consultants are common in business. They do not, in general, perform entirely new operations. Instead, they look at current business practices and suggest ways in which these practices can be implemented faster or more accurately.
The Amazon 1-Click method simply said, “What if we save customer information the first time you enter it, so customers don’t have to enter the same information again?” If this idea is a patented business process, we have a problem.
The government decided that the patent, at least in America. The case of Alice Corp. Against CLS Bank International that was discussed recently that we really have a problem.
The subject matter of the case is the claimed invention which functions as a kind of computerized security system. Alice Corp. managed. from obtaining a patent on the system because although escrow agents are generally not patented, the computerized component of the system has been considered an integral part of the process. It can be argued that CLS Bank infringed on Alice Bank’s patent when it also created a computerized system to track the various transactions that banks conduct with each other throughout the day in order to prevent either party from promising more than they can deliver.
A lower court invalidated Alice’s patents, on the grounds that they represented abstract concepts not eligible for a patent. The Federal Court of Appeals upheld the trial judge’s ruling. However, this appeal decision was divided seven ways, and did not result in the clear majority opinion.
It is not clear whether the Supreme Court will go further than it has in previous intellectual property cases. While many observers have expected Alice to be a decision affecting software patents specifically, arguments seem to suggest that the court will instead focus on when, if any, business method patents are appropriate. In the event that Congress does not write clear rules, it is left to the courts to decide where the limits of patent law lie.
Judge Stephen Breyer worried that allowing patents that only protect the idea of using a computer to do something useful — like time travel — would shift the focus of the system away from encouraging truly useful innovation.
Experience shows that patents are currently issued on a large scale to cover ideas rather than inventions. Amazon did not invent the computer, the mouse, the click, or the credit card. I patented the idea of combining these existing tools more efficiently – an idea exactly what business schools have been studying for decades. While the Supreme Court may not be willing to effectively ban patents on working methods, I would at least hope to limit these patents to inventors who develop a truly new idea and a practical way to apply it.
And I would not at all grieve if the Supreme Court concludes that working methods are ideas, not inventions, and therefore are not patentable. Some of the trolls might leave hungry, but I’m sure they can find more useful ways to make a living.