A future without e-commerce?

E-commerce is something that we now take for granted. Any business of any size can open up a website on the internet, and compete toe to toe with the "big guys". E-commerce technology is cheap, efficient, and levels the playing field in the market place.

Software patents threaten to do damage to this concept: as we have seen elsewhere, particularly the experience in the US, the position of patenting software allows patenting of business methods, mathematics, etc. - that is the logical conclusion of what the system proposes. Software patents are just a specialised form of algorithm patent, and what is an algorithm but an abstract method?

We can explore the damage that these types of patents would do to our business very easily. The Patent Office, on a day to day basis, makes judgements about what should be patentable matter, and what is not. We already know what types of material which is currently excluded, but that some people wish to be included. By searching through the previous decisions, and substituting the previous judgement standards for the new, we glimpse at the type of patent that would be possible in the future.

Build-to-order websites

By only going back to 2002 (it already seems so far away!), we can see that one of the interesting ex-parte decisions involved Dell USA LP, better known to most in the IT industry as Dell computers. This was a denied application for a patent.

It would be best to first describe what was claimed in the patent. The first set of claims was essentially for a website which formed the "system" part of the patent, and the second set of claims was for the method itself. And, the idea of this patent was for the configuration of build-to-order PCs on the website. The key point of their claim was for a validation module, which would ensure that what was being selected was compatible, etc. If you're underwhelmed by these claims, I encourage you to visit the decision at the above link - it's a PDF file, but the english is reasonably accessible.

Making the excluded patentable

Now, you might think that software, business methods, etc. all sounds like excluded material - and you would be right, it is. So, Dell required a way of invoking the "technical effect" genie to wave his wand over the application and turn it into something patentable. In this case, they looked to their validation module to show technical character. And as you might suspect, this argument was so weak that it fell at the first hurdle.

Rather than be deterred, they appealed and re-submitted their application again in modified form, to try to invoke the technical genie again. The patent officer hearing the appeal noted that the claims did not differ much in form or content: form was slightly different (the "web-based online interface" became a "system for configuring PCs online, including a web-based interface"), and the content was slightly different (the validation module was included, with "passive" and "active" validation, in the subsequent application). For those web-designers interested in the difference between passive and active validation; passive validation means popping up an error box when something silly is entered, active validation means not presenting unsuitable options on the web page.

Again, this application failed. Wisely, the examining officer noted that "merely programming a computer to do what a human being might be able to do mentally does not constitute a technical advance", and hence there was no way they could invoke the technical genie to provide a loop-hole for this application.

What if it were not excluded?

So, what would have happened had this patent not been based on excluded matter? Well, it's fairly clear that it would have been granted: the grounds given for refusing it were that it was excluded. Further evidence to this effect is provided by our American cousins: remember, the USPTO will allow patents on "anything under the sun" (quote from the US Supreme Court, see the US software patent history), and indeed Dell do have a US patent for a " Method and apparatus for providing customer configured machines at an internet site". It's patent number 6,167,383 in the US. In fact, Dell have an awfully large arsenal of patents. It's clear that some of those may well be worthy patents, but I think it's equally clear some of those are software/business method patents; particularly the "online" patents.

The effects of these kind of patents are to divide up the internet in a kind of e-commerce turf-war. I've expounded the example above, because Dell tried their tricks in the UK and if the proposals some people wish to make law ever do become law, these are the kinds of patents we would have. There are numerous other e-commerce patent problems, including the famous case of Amazon vs. Barnes & Noble over the Amazon patents.

By allowing these patents, we allow big business to mark their territory on the internet in a way that completely prevents competition. The more patents these companies build up, the smaller the "common" area for everyone else to inhabit. There would be no possibility of licensing these patents unless you have a great deal of money, and although patent advocates would suggest that small innovative business could gain patents of their own and use those to compete in the market place, the reality of the situation is that cross-licensing deals (virtually enforced due to the fact the small business would undoubtedly be infringing on many big companies' patents) would render the patent of the small business useless.

These kinds of patents threaten to do away with all the benefits that the internet has brought us: increased competition, efficient ways to market, and a way for small businesses to compete effectively. There is no possible benefit when you curtail this situation with patents.