method patents may do much to enrich their owners, they do little to promote scientific
research and technological innovation.
IV.
State Street has launched a legal tsunami, inundating the patent office with
applications seeking protection for common business practices.
Applications for Class
705 (business method) patents increased from fewer than 1,000 applications in 1997 to
more than 11,000 applications in 2007. See United States Patent and Trademark
Office, Class 705 Application Filings and Patents Issued Data, available at
http://www.uspto.gov/web/menu/pbmethod/applicationfiling.htm (information available
as of Jan. 2008); see Douglas L. Price, Assessing the Patentability of Financial Services
and Products, 3 J. High Tech. L. 141, 153 (2004) (“The State Street case has opened
the floodgates on business method patents.”).
Patents granted in the wake of State Street have ranged from the somewhat
ridiculous to the truly absurd. See, e.g., U.S. Patent No. 5,851,117 (method of training
janitors to dust and vacuum using video displays); U.S. Patent No. 5,862,223 (method
for selling expert advice); U.S. Patent No. 6,014,643 (method for trading securities);
U.S. Patent No. 6,119,099 (method of enticing customers to order additional food at a
8
Congress has acted to ameliorate some of the negative effects of granting
patents on methods of doing business. It passed the American Inventors Protection Act
(commonly referred to as the First Inventor Defense Act) which provides an affirmative
defense against a business method patent infringement action if the defendant “acting
in good faith, actually reduced the subject matter to practice at least 1 year before the
effective filing date of such patent, and commercially used the subject matter before the
effective filing date of such patent.” See 35 U.S.C. § 273. Even where a defendant
may qualify for this defense, however, he “still must engage in expensive litigation
where [he] bears the burden of affirmatively raising and proving the defense.” See
Nicholas A. Smith, Business Method Patents and Their Limits: Justifications, History,
and the Emergence of A Claim Construction Jurisprudence, 9 Mich. Telecomm. & Tech.
L. Rev. 171, 199 (2002).
2007-1130
12