June 30, 2003

Business Methods Run Wild

The U.S. Patent and Trademark office recently granted a patent to NetFlix for their online DVD ordering system. [NYTimes.com]. Now, I am a long-time NetFlix customer, but this indicates there's a real problem in our patent system with the increasing issuance of so-called "business method patents." Tim Hanrahan and Jason Fry write in Real Time for the Wall Street Journal that

The Internet bubble may have burst, but one of its unfortunate side effects is still with us, like a drunken partygoer who hasn't noticed that a) it's dawn, b) there's no more beer and c) everyone else has gone home. . . . If you thought the [business-methods patent] controversy was as dead and buried as, say, IPOs for online pet-food delivery businesses, guess again. . . . Could someone -- anyone -- please grab Mr. Business Method Patent by the collar and heave him out in the hall so we can clean up?

Hear, hear!! It was bad enough with Amazon's "one-click" patent, but now we've got insurance patents, order-processing patents and other patents for what are not inventions, but just ideas. Of course ideas are creative and deserve protection, but they should not be patentable. The difference is that copyright and trademark permit others to use creative ideas -- within limits -- to make better works, but patents are exclusive. It's a difference of kind, and a crucial distinction between things that people actually build and things that they just dream of. Dreams are wonderful fantasies, as are business methods patents.

 Posted by glenn

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