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Abstract
Business method patents are a special class of patents that allow companies to assert ownership over technologies and the ways in which those technologies are put to use. Looking at the history of business method patents in the United States and the recent resurgence of this type of patent activity in the mobile and handheld computing sectors, I argue that business method and related software patents act as quiet quests for control over information and cultural practices. Business method and software patents highlight how certain actors use moments of technological change to secure economic and cultural advantages through law and regulation. Instead of fostering innovation and rewarding inventors, these patents are an impractical form of intellectual property that seeks to mimic traditional conceptions of physical objects in an era of digital goods. This article serves as a call for scholars undertaking research on the migration of media and culture to new digital formats and devices to consider how patents act as protocols that pre-inscribe devices with certain features, gestures, and meanings. As an increasing variety of cultural goods such as music, movies, and books migrate into digital formats online, business method and software patents have significant implications for the production, circulation, and use of digital commodities.
Notes
[1] In their cross-industry study, legal scholars James Bessen and Michael Meurer (2008a) suggest that “patents are critical for investment in R&D in the pharmaceutical industry” and argue that pharmaceutical patents on chemical compounds are much more likely to earn profit for the companies involved and much less likely to be litigated. Their argument is primarily an economic one so they do not address the social risks of patenting a particular drug or compound that might be otherwise necessary (Vaidhyanathan, Citation2006).
[2] In particular State Street Bank v. Signature Financial Group (1998). In 1993, Signature Financial applied for a patent on a method for calculating accounting ratios for certain kinds of mutual funds. In 1998, the Federal Circuit decided the technology represented a practical application of a method because it produced a useful and tangible result.
[3] 1-Click refers to the button that allows users to order a book from Amazon's website without having to re-enter their address and payment information at each purchase. Amazon stores the users’ credit card and shipping address in its databases from previous purchases, so the users are spared from filling out personal information in text boxes and other common cumbersome checkout tasks.
[4] A private citizen, movie technician Peter Calveley, challenged the patent by submitting prior art that anticipated the claims made by Amazon. In response to Calveley's challenge, the USPTO modified the scope of the patent. The revised version still gives Amazon rights over the 1-Click method, but this is confined to checkout systems that involve online shopping carts. It would not, for example, affect mobile forms of e-commerce where a shopping cart metaphor/technology is not used. Further, there are other markets where Amazon's patent was not awarded. In Canada, for example, the 1-Click patent was the subject of a 13-year legal battle before finally being approved early in 2012.
[5] The Peer-to-Patent project uses social software to expose patent applications to a greater number of ‘experts’. Peers versed in particular fields and domains search for prior art, find old publications and previous instances of similar inventions. They then use this information to rate patent applications. The USPTO patent examiner performs his or her search separately, and after that, consults the recommendations of the peer group before making their final decision.
[6] An early example of a cross-licensing patent agreement is Apple's licensing of Amazon's 1-Click patent (Apple, Citation2000). On the heels of Amazon's lawsuit against Barnes & Noble, Apple's deal offered indirect support for Amazon's claim to the patent. Like other matters of law, patent documents provide theoretical protection for inventors but a patent's true validity only emerges in practice when it is challenged or recognized through specific cases. Apple's willingness to license and use Amazon's technology helped establish the legitimacy of the 1-Click patent.
[7] We can also look to the recent case where an NPE, Personal Audio LLC, is claiming it owns the technology and methods behind podcasting and is currently in the midst of suing popular and independent podcasters.
[8] The case, In re Bilski, decided June 2010, involved a method for paying an average monthly amount for a utility bill based on previous consumption (instead of a fluctuating amount, based on usage).