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N.Y. Senator Concerned About Patent Process

N.Y. Senator Concerned About Patent Process

(12/13/99, 1:32 p.m. ET) By Mo Krochmal, TechWeb

NEW YORK -- Government may have to step into the patent process, said Sen. Charles Schumer (D-NY) on Monday at an e-commerce conference.

"This is one of those issues where you can't avoid intervention," said Schumer, a member of the Judiciary Committee, on Monday in his keynote address at the E-commerce and New Business Models Roundtable sponsored by Polytechnic University.

Traditionally, U.S. patent law has not considered business methods for patent protection, but a court ruling in 1998 opened a floodgate of patents on processes., an Internet retailer based in Stamford, Conn., was one of the first, gaining a patent for its buyer-driven, "name your price" business model. Most recently, a New York company, Linkshare, last week was granted patent protection on its technology for managing Internet affiliate programs.

"A lot of companies are investing in patent portfolios, not to stimulate innovation, but to set up a toll gate," said John Clippinger, CEO of Lexeme, a Boston-area software company.

For businesses, the environment being created is one of insecurity, he said.

"You can be cruising along and all of a sudden, a torpedo comes up and you have to wonder what is the price of litigation," Clippinger said. "You need to have a war chest for litigation. There has to be a new way to think about it."

That new way may come from legislation, said Schumer, a laywer who served as a congressman for nine terms before defeating Alfonse D'Amato last year in the New York senatorial election. Next year, Schumer, a 49-year-old Democrat from Brooklyn, will become the state's senior senator on the retirement of Daniel Patrick Moynihan in 2001.

"It's clear that thousands of companies don't know how patents will affect them," Schumer said.

He said the patent office has become "more expansive" in how it grants patents.

"This is one of the greatest challenges we face in government -- how to protect intellectual property," Schumer said. "I'm worried that if the patent process becomes too broad, we could snuff out innovation." He said government will have to take a bigger role.

"We need some kind of framework," Schumer said. "We should be working together to create that without stifling creativity."