Deep Currents

Trick or treat? On Halloween many patentholders in insurance, banking, accounting, and software got a trick from the DC Court of Appeals, which finally reversed the patentability of business processes. This decision almost completely reversed the 1998 decision that first made business processes subject to patent. Who cares? Well, business processes are one of the few things that typically spread throughout commercial industry without a fee. That’s pretty important to the basic dynamism of our economy. The classic example of why this was a silly idea was Amazon.com’s patent for the one-click ordering system on its website, an simple stepwise innovation that was purely common sense to anyone building e-commerce systems. The article also has a good historical example:

In 1833, the New York City Sun newspaper was founded. Benjamin Day, the publisher, didn’t file for a patent on his innovative business practices of selling advertising and using news boys to distribute his papers. All up and down the eastern seaboard, newspapers popped up. It is very doubtful that this industry would have come about had the Sun’s business practices been patented.

Yes, this is a bit of gut shot to some of our largest firms when the economy is already in shambles. But it will also save untold millions in legal costs for bankrolling patent protection. And the real benefit is that it sets a precedent for denying unnecessary patents in synthetic biology, biotech, and genetics, as my friend Denise Caruso commented on Facebook:

I hope this is the first of many shake-ups in the patent system, which during the boom years granted some of the most absurd protections imaginable. Plenty of equally dangerous/stupid ones are in the offing in biotech and synthetic biology. And the scare tactic about intangible assets in this piece pisses me off — IP is not by any far stretch the only intangible asset that comprises that ‘70 percent of market cap’ figure, nor are the rest of a company’s intangibles dependent upon it.

Written: November 8th, 2008