Patently Absurd

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June 2000 press
release from TeleDynamics Group
– a small company in Clearwater,
Florida – announced that their "latest patent could very
well create a major explosion in demand for our service." TeleDynamics
is one in a growing chain of companies to queue up for governmental
privileges in the form of an absurdly broad patent protection. In
the case of TeleDynamics, the new patent may well give the company
an ownership claim in one of the most common Internet business practices.
According to Monte Sims, the company's CEO, the patent "applies
to virtually any activity" during which data is collected about
an individual and automatically provided to a third party. Such
data collection – which is a source of dismay to privacy advocates
– has been used by mom-and-pop websites as well as Fortune
500 businesses since the mid-90's. In short, anyone who gathers
user information over the Internet or by means of a toll-free telephone
number could be in violation of patent law. Wired

reports that TeleDynamics
, who intends to vigorously enforce
its legal monopoly, "envisions a lucrative future loaded with
licensing deals based on the new patent award." The "lucrative
future" comes with government guarantees.

news comes fast on the heels of a letter, which British Telecom
(BT) dispatched in June to the top ISPs in the United States. The
letter informed the ISPs that they needed to license the technology
of hyperlinks – the colored Internet text that connects a user
from one webpage to other sites with the click of a mouse. Hypertext
has been aptly called "the connective strands that hold together
the World Wide Web." BT is claiming a patent right in the very
structure of the WWW.

it is heartening to see the U.S. Patent and Trademark Office being
vigorously attacked for granting overly broad patents, TeleDynamics'
grab at government privilege has caused nothing near the uproar
occasioned by a similar bid on the part of Amazon last year. In
September 1999, Amazon successfully patented its "1-Click"
service through which customers can shop without having to enter
shipping and billing information with each new purchase. Amazon
lost no time in bringing a patent-infringement suit against its
major competitor Barnes & Inc. In response, a widespread
and spontaneous customer boycott of Amazon was promoted across the
Internet. Although it is not possible to assess the "invisible
hand" impact of the informal boycott, perhaps it is reflected
in Amazon's recent decline in sales.

enforceability of sweeping patents such as those accorded to TeleDynamics
and BT is still in question. The prospect of their freezing effect
on Internet business and technological development, however, raises
a more fundamental issue. Are patents a valid form of intellectual
property or merely a governmental grant of monopoly?

patent involves identifying and using a law of nature or a fact
of reality, neither of which have been created by the discoverer.
For example, no one created the principles of electricity although
many have patented specific applications of those principles. Often,
the patent occurs because a field of endeavor has reached a stage
that makes certain inventions or other breakthroughs almost inevitable.
It is not uncommon for two people to independently develop extremely
similar applications. The most famous example of simultaneous discovery
may well be calculus, which was independently developed by both
Newton and Liebnitz. The 19th century libertarian Benjamin
Tucker captured the objection to one man being granted a patent
on the development of principles that should be open to all when
he wrote: "The central injustice of… patent laws is that
it compels the race to pay an individual through a long term of
years a monopoly price for knowledge that he has discovered today
although some other man… in many cases very probably would have
discovered it tomorrow."

property attorney, N. Stephan Kinsella, has described some of the
standards applied to patents. He writes, "The Supreme Court
has identified three categories of subject matter that are unpatentable,
namely u2018laws of nature, natural phenomena, and abstract ideas.'
[Diamond v. Diehr, 1981] Reducing abstract ideas to some type of
u2018practical application'…is patentable, however." To be patentable,
inventions are required to be novel, to have utility, and be non-obvious.
Novelty means that the invention has not been anticipated by a prior
application or existing knowledge. Non-obviousness means that the
application should be inventive over and above what is obvious to
anyone skilled in the patent's area at that time.

the current patents being claimed over Internet methods and procedures
fulfil such requirements – for example, the requirement of inventiveness?
Consider BTU's monopoly ownership claim over hypertext. BT patented
the technology of hypertext in 1989 although it permitted other
companies to use it royalty-free for a decade. But the technology
of hypertext and its specifics had been discussed in other sources
for some fifteen years before BT snatched at the monopoly. In 1974,
computer visionary Theodor H. Nelson published the now-classic "Dream
Machines" in which he used the term u2018hypertext' to describe
"forms of writing which branch or perform on request; they
are best presented on computer display screens." Nelson even
provided diagrams that could be used in textbooks today. BT is merely
riding the crest of popular wave: companies who claim ownership
in applications they did not invent.

or not you agree with the propriety of intellectual property, the
current patents being approved by the U.S. Patent and Trademark
Office are absurd and destructive. In its model of patents, 18th
century America broke with tradition. Historically, patents were
grants of privilege awarded by a ruler to an elite who were either
u2018favorites' or who were willing to pay the requisite bribes. By
contrast, the purpose of the American patent was to extend protection
to every single person, without privilege, so individuals could
rise through merit and inventiveness. By granting patents to those
who have not invented applications or whose applications were anticipated
by technology's state-of-the-art, the U.S. Patent and Trademark
Office violates the purpose of American patents and returns to the
days of royal privilege.

20, 2000

McElroy is author of The
Reasonable Woman
. See more of her work at
and at her personal website.

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