All around, hopeful entrepreneurs are treasuring new patents like geese ready to lay golden eggs. Stephen Messer, for example, is building an Internet business called LinkShare around a patent he got in November on managing referral fees for traffic between affiliated Web sites. His sister, Heidi Messer, a lawyer who is now LinkShare's president, encouraged him to apply for the patent on his idea. "When he told it to me, I thought it was profound," she says.
He's a believer in patents now. "Without the patent system, I never would have done what I did," he says. "Without the patent system you create a world where pirates have the advantage and pioneers are penalized." His lawyers, in fact, are taking a close look at the many companies using affiliate-referral systems. One of them is Amazon.
As for one-click ordering, a final verdict could be years away, and in the meantime, on-line merchants will have to be careful. Mothernature.com already has one-click remedy packs. Safe Harbor has one-click ordering of digital video products. Are they patent infringers?
"I think the beauty of the patent law is, it encourages innovation, because it says, look, we challenge you to come up with a better way," says Heidi Messer. "Somebody out there," says Stephen, "I guarantee you, probably sitting in a garage right now, has an idea that does zero-click."
Heidi laughs. "Telekinetic!"
Telekinesis would be worth patenting. Meanwhile, much of the value of the patent system lies in the disclosure of technologies that might otherwise be hoarded as trade secrets. But when Barnes and Noble decided to implement one-click ordering, its programmers did not need to see Amazon's patent. The software techniques are transparent. Any Internet company with a decent programmer at hand could imitate Amazon's system without breaking a sweat and without copying its actual code. This isn't rocket science, in other words. I say as much to Commissioner Dickinson. He is unruffled; evidently he's heard it before. "We don't patent only rocket science," he says. "We patent football-helmet mailboxes." And indeed they do. Sportsbox Inc., a.k.a. a couple of guys in Richmond, Ky., owns the patent for mailboxes built in the shape of football helmets; before you make one, you'd better get their permission.
Dickinson, who practiced as a corporate intellectual-property lawyer for 25 years before taking over the patent office, says the law prohibits him from discussing any particular patent. (The patent office forbids its examiners to speak to the press at all, and the examiners who did talk about their work for this article insisted that their names be withheld.) Still, he can't resist revealing some pride in the progress of the Amazon case so far. "It's interesting because it's one of the first Internet patents to come to at least one conclusory stage of the litigation process," he says. "A federal judge found that the patent was sufficiently valid to issue a preliminary injunction, which is a rather extraordinary thing, right in the face of the Christmas holiday season. I thought that was kind of amazing, to be honest, and tends to suggest that the patent has validity."
In making her preliminary finding that Barnes and Noble infringed the Amazon patent, she did not have to examine the underlying software code. Just how Barnes and Noble implemented one-click ordering doesn't matter. Any single-action ordering system violates Amazon's exclusive rights, she found. She also expressed a public-interest argument: "Innovation will be discouraged if competitors are permitted a free ride on each other's patented inventions," she declared.
The commissioner agrees: "The patent system has done its job for two centuries of protecting and nurturing and rewarding innovation. The system has worked."
But the digital revolution worked without patents. The great bursts of technological innovation of the past two decades, the rise of personal-computer software and the spread of the Internet, took place in a free-wheeling and competitive climate, with ideas bouncing at light speed from one place to another. A little head start in this world goes a long way; in the digital economy, "first movers" gain a tremendous and possibly long-lasting advantage, without extra government fortification. The greatest successes, like Microsoft and America Online, had nothing to do with patent protection. Amazon did not need patents to grow from Jeff Bezos' garage to its current preeminence.
Who Wants to Be a Billionaire?
Bruce Dickens, for one. On the basis of a single
patent for a method of fixing Y2K problems, he's demanding billions of dollars from
corporate America. [To article.]
The Patent That Never Was
Inventors rank high in our pantheon of heroes. If someone has a great idea that makes life a little better for millions of people, surely fortune and fame are fair compensation. Yet, when it comes to rewarding and protecting the greatest achievements, the history of twentieth-century invention suggests that the patent system has at best a mixed record. [To article.]
Only the Congress can now return the patent system to its time-honored role as a catalyst for innovation, rather than a concentrator of economic power. For limited times, the Constitution says and the generations of technology pass much more quickly now than they did in 1790. We want to reward inventors with a head start, not a lifetime entitlement. "Perhaps on the Internet, patents should last one Internet lifetime, which is about two years," says Greg E. Blonder, a longtime researcher and vice president at Bell Labs and now entrepreneur in residence at AT&T Ventures.
This is a crowded and densely packed world; when a software engineer at IBM comes up with a new idea, it's usually safe to bet that dozens or hundreds of software engineers in cubbyholes around the world are thinking along the same lines. Blonder himself has more than 60 patents to his name: toys, consumer electronics, software and business methods. He often gathers technologists for daylong brainstorming sessions; typically, these groups produce hundreds of useful "ideas," of which perhaps one in ten turns out to be truly novel. "Problem is," Blonder says, "had I gathered together a different group of a dozen people, they'd come up with practically the same list. Arguably, any idea generated so easily and frequently is both obvious and a dubious candidate for a 20-year government-sanctioned monopoly." Patents should be the exception, not the rule, he says. "As to my own business-process patents, well, as long as everyone in town is carrying a gun, I have to be armed as well. But I'd be glad to see the system change."
One thing is certain: the modern Internet entrepreneur is not a species in need of extra government incentives. If one-click ordering had not been patentable, surely Jeff Bezos would have invented it anyway in May 1997, put it to work in September 1997, seen it copied in subsequent years by Barnes and Noble and thousands of other Internet merchants, learning from his success, to the overall benefit of consumers. Surely he would have become a very rich man; and his future success would depend on his ability to continue outperforming his competitors, and to continue innovating.