The Internet And Patent Conflicts

Patents are a monopoly granted by the government for a limited period of time.  (See "Patent Law" on this website.}  The purpose is to provide incentives for inventors and thereby improve machines, processes and the manufacture or composition of matter.  

Patents used to be thought of as limited to new inventions such as the better mouse trap.  However, the decision to allow the patenting of software has opened up the door to the patenting of inventions not previously thought patentable.  The most recent example is business method patents.  A court recently decided that business methods can be patented.  In the State Street Bank case, the business method was the way a company used a computer program to administer mutual funds.  It wasn't the software that was patented - it was the method used by the company.  The First Circuit said that it met the requirements of the patent law and a patent could be validly granted.

The problem with this case is that there is no limit now to what can be patented as a business method.  Methods used by other companies for years can be patented by one company and then the patent used to make other companies change the way they do business.  The most interesting example is a patent for "one-click" shopping that has been awarded to Amazon.com.  The internet community is upset over the grant of a monopoly for something that many websites have been using.  Another one is the award of a patent to Priceline.com which may grant them a monopoly on a certain type of online auctions.

Companies that have been using business methods for years (and try, usually, to protect their methods as trade secrets) petitioned Congress to give them some protection.  In 1999, Congress passed ^ to give companies some insulation from business method patents that affect their method of doing business if they have been using their method more than one year prior to the application by another company for a patent involving the same method..

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