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CMU ISR 08732 - Defining The Proper Scope

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CHIAPETTAINCORPTYPESET.DOC 04/06/01 8:25 AM289DEFINING THE PROPER SCOPE OFINTERNET PATENTS: IF WE DON’TKNOW WHERE WE WANT TO GO,WE’RE UNLIKELY TO GET THEREVincent Chiappetta*Cite as: Vincent Chiappetta, Defining the Proper Scope of Internet Patents:If We Don’t Know Where We Want to Go, We’re Unlikely to Get There,7 Mich. Telecomm. Tech. L. Rev. 289 (2001),available at http://www.mttlr.org/volseven/chiappetta.html.Introduction ......................................................................................289I. Should Internet Patents Exist?............................................296II. Something Short of Business Method Patents?.................324III. A New “Competitive Arts” Regime.........................................331IV. What Do We Do in the Meantime(or While Waiting for Godot)?..............................................348Conclusion..........................................................................................361IntroductionInternet patents1 are unquestionably a hot topic. The United StatesPatent and Trademark Office (“USPTO”) is awash in applications.2 No *Associate Professor, Willamette University College of Law, B.S.E.E., Massachu-setts Institute of Technology, 1973; J.D., University of Michigan, 1977. My thanks toProfessor Glynn Lunney, Professor Toshiko Takenaka, Professor Rochelle Cooper Dreyfuss,John Whitaker of Merchant & Gould and the participants in Professors Dreyfuss’s and Take-naka’s seminar at the University of Washington for a number of very helpful comments andto Nicole Owren-Wiest for her most able research assistance. I gratefully acknowledge Ora-cle Corporation, Lyon & Lyon and Willamette University College of Law research grantsmade in connection with the preparation of this article.1. For purposes of this article “Internet patents” include patents protecting methods ofdoing business on the Internet, standing alone or as computing implementations. Patentscovering the basic equipment and telecommunications routing, switching and other relatedtechnologies vital to the operation of the Internet’s infrastructure are excluded.2.See, e.g., John T. Aquino, Patently Permissive, A.B.A. J., May 1999, at 30; SaulHansell, As Patents Multiply, Web Sites find Lawsuits are a Click Away, N.Y. Times, Dec.11, 1999, at A1; Josh Lerner, Where Does State Street Lead? A First Look at Finance Pat-ents, 1971–2000 1 (Sept. 2000) (unpublished manuscript, on file with the National Bureau ofEconomic Research), available at http://www.nber.org/papers/w7918; Richard Maulsby,Under Secretary Dickinson Initiates Action Plan for Business Method Patents, USPTO To-day, Spring 2000, at 8 (noting e-commerce related patent applications have doubled between1998 and 1999); John R. Thomas, The Post-Industrial Patent System, 10 Fordham Intell.Prop. Media & Ent. L.J. 3, 4 (1999)(citing numerous sources).CHIAPETTAINCORPTYPESET.DOC 04/06/01 8:25 AM290Michigan Telecommunications and Technology Law Review[Vol. 7:289sooner did the first patents issue than a wave of litigation broke over themarketplace.3 Commentators of all types, business,4 academic5 and eventhe regular press (electronic and otherwise)6 which normally avoids theesoteric and boring issues of intellectual property law, have weighed inon the issue. Something interesting, and maybe even important, must behappening; something which deserves a closer look.Most of the excitement can be traced back to the Court of Appealsfor the Federal Circuit (“CAFC”) decision in State Street Bank & Trustv. Signature Financial Group.7 The opinion in that case triggered pro-found changes in the role of patent law in Internet commerce. First, itconsolidated the CAFC’s strong support for the patentability of softwareinventions.8 Second, and more importantly, it has been widely inter- 3.See, e.g., Fantasy Sports Props., Inc. v. CBS Sportsline, et al., 103 F. Supp. 2d 886(E.D. Va. 2000); Amazon.com, Inc. v. Barnesandnoble.com, Inc., 73 F. Supp. 2d 1228 (W.D.Wash. 1999), vacated by 239 F.3d 1343 (Fed. Cir. 2001); DoubleClick, Inc. v. L90 Inc., No.2:99-1914 (E.D. Va. filed Nov. 12 1999); Priceline.com, Inc. v. Microsoft, No. 3:99 CV1991 (D. Conn. filed Oct. 13, 1999); Hansell, supra note 2.4.See, e.g., Victoria Slind-Flor, Gold Diggers, Corporate Counsel (Dec. 20, 1999)available at http://www.lawnewsnetwork.com/stories/A11873-1999Dec17.html (on file withMichigan Telecommunications and Technology Law Review (“MTTLR”)); Letter to theEditor: Re: “Gold Diggers” (Dec. 29, 1999) at http://www.lawnewsnetwork.com/stories/A12441-1999Dec29.html (on file with MTTLR); Dugie Standeford, Book PublisherLaunches Cybercampaign Against Amazon.com, E-Commerce Law Weekly (Mar. 8, 2000)available at http://www.lawnewsnetwork.com/stories/A18094-2000Mar7.html (on file withMTTLR).5.See, e.g., Rochelle Cooper Dreyfuss, Are Business Method Patents Bad for Busi-ness?, 16 Santa Clara Computer & High Tech. L. J. 263 (2000); Robert P. Merges, AsMany as Six Impossible Patents Before Breakfast: Property Rights for Business Conceptsand Patent System Reform, 14 Berkeley Tech. L. J. 577 (1999); Leo J. Raskind, The StateStreet Bank Decision: the Bad Business Of Unlimited Patent Protection for Methods of Do-ing Business, 10 Fordham Intell. Prop. Media & Ent. L. J. 61 (1999); Richard H. Stern,Scope-of-Protection Problems with Patents and Copyrights on Methods of Doing Business,10 Fordham Intell. Prop. Media & Ent. L. J. 105; Thomas, supra note 2.6.See, e.g., James Gleick, Patently Absurd, New York Times Magazine, March 12,2000, at 44; Hansell, supra note 2.7. 149 F.3d 1368 (Fed. Cir. 1998).8. In particular, that such inventions fit within the statutory classes of patentable sub-ject matter under 35 U.S.C. § 101 (1994). See id. at 1375. The CAFC, which possessesexclusive jurisdiction over appeals in patent application and infringement cases, had beengradually moving toward this position. See Vincent Chiappetta, Patentability of ComputerSoftware Instruction as an “Article of Manufacture:” Software as Such as the Right Stuff, 17J. Marshall J. Computer & Info. L. 89, 106–113 (1998) [hereinafter Chiappetta, Article ofManufacture]. To obtain a patent the additional requirements of usefulness, novelty, non-obviousness and description/enablement must be satisfied. Id. at 99–106. The CAFC ex-pressly acknowledged the point in both State Street Bank, 149 F.3d at 1375, and in AT&TCorp. v. Excel Communications, Inc., 172 F.3d 1352,


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CMU ISR 08732 - Defining The Proper Scope

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