Yesterday's Supreme Court decision on patent injunctions in the Ebay/Merc case, in one of the concurring opinions, has a very troubling statement that reflects serious Supreme Court ignorance of patent quality and the nature of science and technology.
In a concurring decision from Justices Kennedy (who wrote it), Stevens, Souter and Breyer, there appears:
"In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test."
First, is anyone claiming or complaining that controversial business method patents are VAGUE, or at least anymore VAGUE than much of the nonsense in patent specs that somehow passes Section 112 enablement requirements? NO NO NO NO NO NO. Is a "Buy Now" button VAGUE? Is one-click VAGUE? Are reverse auctions VAGUE? Is technical analysis for stock trading VAGUE? Is compensating a manager based on measurable levels of performance VAGUE? Is reserving the bathroom on an airplane VAGUE? NO NO NO NO NO NO. Where the heck did the Supreme Court get the idea that business method patents have a vagueness problem any worse than any other area of technology (other than reading caselaw- and science- defective IBM briefs)? I hope the Supremes know enough about patents to not confuse vagueness with obviousness (this latter problem discussed below). The district court made a similar unsubstantiated comment about vagueness.
And please, will the federal courts shut up about vagueness and IP if they aren't going to apply Due Process public notice considerations.
Such judges should resign and go into practice with Larry Lessig.
This vagueness nonsense is bad enough. But please don't talk about patent quality unless you talk to me first. Whoops, that's what they didn't do:
"The potential vagueness and suspect validity of some of these patents ..."
Oh oh oh - the Supreme Court is worried about the suspect validity of business method patents. Again, COMPARED TO WHAT? Patents on recipes for fried chicken? I spend a good amount of my time busting patents involving the applications of the science of economics (how to refer to business method patents if you understand science, economics, business and the law :-). I also spend a good amount of my time busting electronics patents, optics patents, communications patents, biotech patents, etc.
The quality is all relatively the same - most cite no non-patent prior art, and too often miss citing very relevant prior patents. Additionally, given the PTO's "double eyeballs", which has lead to a low rate of issuance of "business method" patents, it is easy to show that the quality of such patents differs little from other patents. Indeed, the PTO is reporting such statistics with which many can agree:
Greg -
By the way, at the PTO's Business Methods Partnership Meeting held on 5/3/06 in Alexandria, the PTO reported out that the allowance rate in Class 705 (business methods) had increased from 11% in 2004 to 19% in 2005. At 19%, the allowance rate is still artificially low (compared to about 60% in the PTO office-wide), but the trend is in the right direction. The PTO attributed the increase to the disposal of a number of poorly-drafted Internet bubble business method applications and the emergence of more well-drafted, focused applications the last several years...
"More well-drafted, focused applications", which with some decent prior art searching, brings their quality level up (or down) to the level of most other areas of technology. So unless the Supreme Court is worried about the suspect validity of all patents, it should shut up about "business method" patents - they don't know what they are talking about.
I hope the Supremes don't actually believe what they read in IBM briefs.
I find these comments made by the Supreme Court troubling. They need to be presented with demographics and quality of patents across technology areas - the type of information that really is not found in the cases they have to consider, but is the type of information inherently needed if they are going to make these statements.
And why are the Supremes using the phrase "business method" and saying that for the most part, they don't have much legal or economic significance?
First, as pointed out in the State Street decision, business methods have been patentable, if not before, but certainly after the Patent Reform Act of 1952. Thousands of such patents had been sought, some to the point of litigation (Merrill Lynch). For example, prior to Priceline, there were a variety of auction patents. Given their overlaps with software patents, it is not hard to show that the legal and economic significance of business method patents tracks that of software patents over the last 30 years. The Supreme Court does not understand this history. It needs to be informed.
Second, harking back to the CAFC's State Street and Schrader decisions, it is a disservice to the public to use the term "business method". As Judge Newman rightly pointed out in Schrader, and quoted in State Street:
[The business method exception] is . . . an unwarranted encumbrance to the definition of statutory subject matter in section 101, that [should] be discarded as error-prone, redundant, and obsolete.
Why is the Supreme Court using a term that is error-prone, redundant and obsolete? Didn't they read the State Street decision? A pharmaceutical company mixes some chemicals and produces a drug for sale - that's a freakin business method, the business method of mixing some chemicals in a way that you can sell the final product. Now if the Supreme Court is referring to patent claims where one of the claimed components is something that represents monetary value, say so. In short, other than being glib, what the heck are the Supremes refering to when they say "business methods"? I hope they aren't using any of Congressman Berman's circular definitions ("A business method are methods used ....... blah blah blah ...... by businesses.")
This offhand comment at the end of the concurring is troubling in what it reveals about the Supreme Court's lack of knowledge or seriousness with regards to "business method" patents. They need to be better informed before they make any more related decisions - and they weren't informed about this issue to any extent in the Metabolite filings. Save such thoughts for when the Lundgren decision gets appealed.
Greg Aharonian
Internet Patent News Service
