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Absurdly broad patents are channeling resources from innovation into lawyers' pockets.
Have you ever read Bleak House, the Dickens classic in which lawyers fight incessantly over a disputed inheritance until they gobble it all up in legal fees? With the U.S. Patent Office now handing out a staggering number of patents on various methods of doing business-as opposed to actual inventions-it looks like we're in for a modern-day remake. In today's version of Jarndyce v. Jarndyce (the interminable Bleak House proceeding), lawyers haggle over these absurdly vague and broad patents, squandering not just money but the very innovation the patent system was established to stimulate.
For a preview of Bleak House 2: The Patent Years, consider last November's appeals ruling in the case Interactive Gift Express Inc. v. CompuServe et al-a.k.a. the fight over U.S. Patent No. 4,528,643, "System for Reproducing Information in Material Objects at a Point of Sale Location." One of the first patent infringement claims involving an e-commerce business method to reach the top (the U.S. Court of Appeals for the Federal Circuit), this case has seen almost as many judicial twists as the presidential election. I thought we had reached a sane solution in 1998, when a lower court took a narrow interpretation of the patent's scope. But now, after several years of litigation that has tied up time and resources at more than 40 e-commerce companies, the appellate court has overturned the lower court on all five contested claims. What's more, instead of definitively reversing the decision, it has remanded the case for-you guessed it-more legal proceedings.The question in this case is whether the patent gives E-Data of Greenwich, CT (formerly Interactive Gift Express), an exclusive right to the underlying "method" of selling downloadable material-music, software, books, films and more-over the Internet. E-Data's lawyers claim it does. They contend CompuServe (now part of America Online), Ziff Davis Publishing, Broderbund, Intuit, Waldenbooks, and other defendants-and by inference thousands of additional online businesses-infringe the patent whenever they sell downloadable material.
The result has been a judicial mess. But, to be fair, you can't blame the courts alone. Like many other business-method patents, E-Data's is so enticingly broad, so vaguely worded and so potentially lucrative it's little wonder a dizzying succession of lawyers, financiers and small-time entrepreneurs want to cash in on it. (For the hairsplitting legalese of the appellate ruling and related documents, see www.patents.com/ige.htm.)
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