Patent Office Seeks to Quiet Critics

SAN MATEO (03/30/2000) - The Patent and Trademark Office (PTO) yesterday night detailed a new initiative to address industry criticism over its practices for issuing Internet-related business methods patents, which some argue are too broad-based and monopolistic.

The Business Method Patent Initiative outlines plans for industry outreach and quality control by the PTO, including enhancing technical training for examiners. It also calls for expansion of current searches for "prior art," which is PTO-speak for instances where an invention existed prior to the claim, thereby invalidating the patent claim.

According to Don Pelto, patent attorney with McKenna and Cuneo, in Washington, this initiative represents a step in the right direction for the PTO. In particular, Pelto pointed to the initiative's mandate of a second review for all Internet and business method patents. Having a senior-level examiner give a second review to all of these patents, with an eye toward the scope of the claim, could reduce the number of erroneously issued patents, Pelto said.

However, Gregory Aharonian, editor and publisher of the Internet Patent News Service, holds a different opinion of the initiative.

"(The) consensus is that the proposed changes will have little effect," Aharonian wrote.

Some controversial patents have inspired boycotts of Amazon.com Inc., which came under fire for its one-click shopping patent and its newest patent covering its affiliates program.

Amazon sued Barnesandnoble.com for infringing on its one-click shopping patent.

Barnesandnoble.com, although forced to change to a two-click shopping process, thanked Amazon.com in a prepared statement for spelling its name correctly in the press release announcing the lawsuit, and laid all the credit for its subsequent increased sales and traffic at Amazon's feet.

Jeff Bezos, chief executive officer of Amazon.com, recently responded to the criticism and boycotts of his e-commerce site by suggesting the current 20-year term that cover patents should be shortened.

But according to Henry Petri, patent attorney with the law firm Howrey Simon Arnold & White, in Washington, Bezos' suggestion would have negligible effect on the problem. In technology, innovation moves so fast that a patent really only gives a company a market share advantage for a few years before it's outdated and built around, Petri said.

Priceline.com is also involved in litigation with Microsoft's Expedia over its patent on name-your-own-price auctions, another controversial patent. Jay Walker, founder of Priceline.com, feels that mistakes such as the infamous Compton New Media case -- where the PTO issued Compton a patent on multimedia itself, even though multimedia had been around for 20 years -- are bound to happen when dealing with the volume of applications that the PTO sees each year. Walker is also chairman of Walker Digital, an idea factory that specializes in developing and patenting business processes.

"The patent office's job is to brand intellectual property when the inventor proves to the patent office's satisfaction that the invention is non-obvious, useful, and novel. That's not an easy task," Walker said.

"The patent office is going to issue of couple of hundred thousand patents a year, and so it's going to, by definition, make some mistakes, just like every organization that does hundreds of thousands of diagnosis a year is going to make some mistakes," Walker added.

The PTO issued 399 Internet-related business method patents last year, more than double the 182 in 1998, according to Brigid Quinn, deputy director of public affairs for the PTO.

Petri feels that the PTO's new initiative will not affect the growth in patents in this area, but will affect the quality.

"I don't think it's going to decrease the number of patents issued, but I think it's going to improve the quality of those patents issued," Petri said.

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