unnecessarily, we . . . limit competition with no quid pro quo. Retarding competition
retards further development.” Pollack, supra at 76. “Think how the airline industry
might now be structured if the first company to offer frequent flyer miles had enjoyed the
sole right to award them or how differently mergers and acquisitions would be financed
. . . if the use of junk bonds had been protected by a patent.” Dreyfuss, supra at 264.
By affording patent protection to business practices, “the government distorts the
operation of the free market system and reduces the gains from the operation of the
market.” Sfekas, supra at 214.
It is often consumers who suffer when business methods are patented. See
Raskind, supra at 82. Patented products are more expensive because licensing fees
are often passed on to consumers. See Lois Matelan, The Continuing Controversy
Over Business Method Patents, 18 Fordham Intell. Prop. Med. & Ent. L.J. 189, 201
(2007). Further, as a general matter, “quantity and quality [of patented products] are
less than they would be in a competitive market.” Dreyfuss, supra at 275.
Patenting business methods makes American companies less competitive in the
global marketplace. American companies can now obtain exclusionary rights on
methods of conducting business, but their counterparts in Europe and Japan generally
cannot. See Biddinger, supra at 2546-47. Producing products in the United States
becomes more expensive because American companies, unlike their overseas
counterparts, must incur licensing fees in order to use patented business methods:
[O]nce a United States patent application for a new method of doing
business becomes publicly available, companies in Europe and Japan
may begin using the method outside the United States, while American
companies in competition with the patentee would be unable to use the
method in the United States without incurring licensing fees. The result is
that companies outside of the United States receive the benefit of the
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