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The battle over e-commerce patents heats up

http://www.ipmag.com/monthly/99-nov/poynder.html


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.

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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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