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[FYI] The battle over e-commerce patents heats up


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Method Madness 

The battle over e-commerce patents heats up  

By Richard Poynder  

Since patents were first issued, the birth of each new industry has 
tended to trigger a new debate over patentability. A hundred years 
ago, critics questioned whether agricultural inventions could be 
protected, on the grounds that agriculture was not an industry. 
Twenty years ago, it was argued that to grant pharmaceutical patents 
would be unethical. And today the biotechnology industry finds itself 
at the centre of the so-called "patenting of life" controversy.  

It should, therefore, come as no surprise that a development as 
radical as the Internet should spark its own patenting wrangle. In 
particular, a cluster of patents issued by the U.S. Patent and 
Trademark Office covering e-commerce methods and techniques has set 
off a storm of criticism.  

The main complaint is that many of these new patents are far too 
broad in scope. Massachusetts-based Open Market, for instance, has 
been granted several patents that, some claim, could potentially 
allow it to demand royalties from almost any company engaged in e-
commerce. These include a patent on a secure, real-time payment 
method using debit and credit cards, one covering electronic shopping 
carts, and another on a technique for analysing how users browse Web 
content. To date, Open Market has not taken legal action against 
supposed infringers.  

In contrast, Sightsound.com -- which claims to have been granted a 
patent that covers the sale of any digital audio or video recording 
over the Internet -- is currently suing N2K, a company that retails 
music on the Web. The Mt. Lebanon, Pa., company has also written to a 
number of other prominent music sites demanding royalties on every 
sale that involves downloading music to a customer.  


Until recently it was assumed that the controversy was not relevant 
to Europe. Historically, software (which e-commerce
patents by definition are) has not been patentable in Europe; nor is 
it generally accepted that business methods can be patented.

But apart from the inherent problems of trying to enforce a 
geographically defined legal system on a global network, current 
harmonisation initiatives are eroding national differences. Thus, in 
response to the European Commission Green Paper on patenting, the 
European Patent Office has recently proposed that 52 of the European 
Patent Convention should be replaced with wording agreed upon during 
the Uruguay Round of the GATT Accord.   

"If this were to happen, not only would it open the door to the 
patenting of software in Europe, but to business methods as
well," argues Bob Hart, chairman of the Computer Technology Committee 
of the U.K. Chartered Institute of Patent Agents.
"Which would make it highly likely that many of these e-commerce 
patents would be granted in Europe, too."


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