"It's not broken but we're fixing it"

The patent office reveals its new plan for examining "business method" patents, and, no, it says, it's not responding to industry pressure.

Published March 30, 2000 5:00PM (EST)

The Patent and Trademark Office announced on Wednesday that it will scrutinize "business method" patent applications, like the one Amazon.com filed for its one-click ordering system, more intensely than all other innovations seeking protection.

This decision didn't come about because the office was doing a poor job, nor because of the "fairly concerted public relations campaign" demanding reform led by Amazon's CEO Jeff Bezos and others on the Net.

The inspiration for revamping the process, according to patent commissioner Q. Todd Dickinson, came from within the agency: "The office has had this in the works for a while," said Dickinson, who said that the patent office is taking its cue from State Street vs. Signature Financial. This 1998 court decision established that patents could apply to ways of doing business. The case helped ignite an explosion of e-commerce patent applications, like the several hundred filed by Priceline.com founder Jay Walker, or the controversial customer referral patent recently awarded to Amazon.com.

"We're doing a very good job," Dickinson told a group of about 60 attorneys who had gathered in a downtown San Francisco hotel for an intellectual-property conference on Wednesday. "But we can do an even better job. These steps are very important ways to make sure that we meet our customers' demands in a field that's growing rapidly."

The lawyers, some of whom complained freely about the troubles afflicting the patent office, didn't necessarily agree with Dickinson's assessment. Some even questioned whether Dickinson's overhaul would do much more than slow the process down.

"It's going to add another layer onto their already brutal and lengthy process," said Tom Coverstone, an intellectual property attorney at Washington law firm Burns, Doane. The problem, from Coverstone's perspective: Dickinson's plan adds extra work, but not extra resources.

Greg Aharonian, publisher of Internet Patent News, agrees: "If you're proposing these new things without telling me how you're going to fund them, it's hard to believe that they'll work."

Specifically, the plan, which went into effect Wednesday, mandates that the 40 examiners who focus on "business method" patents expand their search for "prior art" (examples of similar existing innovations), by examining online databases of foreign patents and software innovations, like the one maintained by Software Patent Institute. Currently, the patent examiners are only required to search the patent office's own files.

Most importantly, according to Dickinson, the plan involves scrutiny from "a third pair of eyes." Instead of passing on a patent application to one supervisor for approval, examiners will now have two senior examiners making sure they aren't issuing patents to innovations that fail to meet the requirements that they be new and not obvious (the two primary criteria by which an innovation's originality and therefore patentability are determined).

The plan also calls for informal training sessions for the patent examiners: Beginning in July the patent office will hold round-table discussions with executives and technologists from high-tech companies.

Of course, these patent reforms will have to come about with no additional head count. Dickinson said he would like to add more examiners, but can't unless Congress sanctions a bigger budget. Bezos, with whom Dickinson plans to meet next week, has also called for Congress to let the office keep more of its cash. Dickinson is not optimistic that it will happen this year.

That's too bad, said Larry Shaw, a San Francisco attorney at the conference, who suggested that the patent office should increase its fees and use those funds to pay its examiners better. "In the end it comes down to the money," says Shaw. "It's good to see an awareness of the problem, but there still isn't acknowledgement of the cause. It's like admitting there's a leak, and deciding to bail out the water instead of fixing the leak."

By Damien Cave

Damien Cave is an associate editor at Rolling Stone and a contributing writer at Salon.

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Intellectual Property