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Internet Business Method Patents
Pages 259-284

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From page 259...
... Tiller McCombs School of Business University of Texas at Austin INTRODUCTION The large number of Internet business method patents applied for and received since the mid-199Os has raised considerable concern among policymakers, academics, business, and other interested observers. That business methods are patentable subject matter seems to be beyond question after the decisions in State Street Bank & Trust Co.
From page 260...
... In the areas of software patents generally, and business method patents particularly, there has been much concern that the corps of patent examiners has been insufficiently populated with those qualified to seek out nontraditional sources of prior art and to knowledgeably examine these patents. Some observers argue that examiner inexperience has been and continues to be a major problem in these areas.6 Only recently has the USPTO begun to hire examiners in software and related fields7 and, even more recently, to institute programs for training and providing more access to literature on the business disciplines.8 Because much of the criticism of Internet business method patents focuses on their perceived differences from other patents granted by the USPTO, it is important to know whether these patents do in fact differ from the more general patents that issue from the USPTO and, if they do differ, in what ways.
From page 261...
... was developed especially for this study. It generally mirrors the data categories from the General Patent Data Set, with a few additions.~° We list below the data elements collected from each Internet patent and our motivation for including each element.
From page 262...
... Another observation clearly provides strong support for this conclusion. One finds wide variations in the number of patent and nonpatent prior art references among U.S.
From page 263...
... to rely more on citations to other software and industry publications nonpatent prior art references than would more general patents given the shorter cycles of innovation involved with software. In our study, a finding that Internet business method patents contain fewer total references, and especially fewer nonpatent prior art references, would add strength to the criticisms that Internet business method patents are being granted without sufficient review by the USPTO.
From page 264...
... One example is a reference to a partial title of an item, followed by "found on the web on x date." The General Patent Set did not contain comparable data on nonpatent prior art references. Entity Status of Patent Assignee The entity status of the owner of the patent including Individual, Nonprofit (such as a university or a foundation)
From page 265...
... Patents. These two groups together constitute what most people believe to be "Internet business method patents." Well-known examples of each include Priceline.com's patent on the "Name Your Own Price" method of doing business (we identify this an IBusiness Model because it can be a stand-alone business or a distinct line of business)
From page 266...
... see whether entity size was related to the level of business concept or technology of the patent, in other words, does large business dominate the business concept patents at the expense of small business or individual inventors? DATA ANALYSIS Our goal for these comparisons was to examine continuous and categorical patent attributes by patent type (Internet-related compared with General, or Internet Business Methods compared with General)
From page 267...
... . In addition, a nonparametric Wilcoxon test was performed with the unadjusted values, which also showed that there was a statistically significant difference between the number of total prior art references cited in general patents and Internet patents [Wilcoxon test statistic = 1103312, Z = -6.42, p < 0.0001]
From page 268...
... These findings suggest that criticisms of Internet-related patents that are based on the amount of prior art cited (especially nonpatent prior art) are not supported by the data.24 Comparison of Internet Business Method Patents and General Patents Excluding Internet software patents from the data set and looking only at Internet business method patents (both I-Business Model and I-Business Technique patents)
From page 269...
... = 6.44,p < 0.00011.27 We note that there are many Internet business method patents with no nonpatent prior art and a few Internet business method patents with many nonpatent prior art references that could bias our results (that Internet business 25The t-test used the Satterthwaite adjustment to the degrees of freedom to account for the unequal variances between groups [F(1092, 999)
From page 270...
... In short, and most significantly, we found that Internet business method patents are less likely than general patents to have zero nonpatent prior art references in the patent. In sum, we found that Internet business method patents are supported by more total references, patent references, and nonpatent references than general patents.
From page 271...
... Comparison of Internet Patent Subtypes and General Patent Data Set Taking the analysis one step deeper, we looked individually at all Internet patent subtypes: I-Business Model Patents, I-Business Technique Patents, and ISoftware Technique Patents. It may be that certain types of Internet business method patents are especially controversial or problematic.
From page 272...
... The t-test and Wilcoxon tests were consistent for all of the above findings.29 Those prior art-related criticisms aimed at the broadest type of Internet business method patents the Internet business model would seem to find no support in the data. Moreover, in terms of prior art generally and nonpatent prior art specifically, there is no evidence to support the 29The l-tests used the Satterthwaite adjustment to the degrees of freedom to account for the unequal variances between groups.
From page 273...
... TABLE 4 Nonpatent Prior Art References in 20 Sample Nonpatent Reference Category Mean Median Acad/Trade 4.44 1.0 Comp/Indus 1.9 0 Univ. Pubs 0.17 0 Gov Doc 0.12 0 SW 0.46 0 PP 0.73 0 Pat Apps/Searches 0.08 0 Other 0.13 0 30In a multivariate analyses, we considered the effects of several other variables not fully discussed here and found no significant differences between General patents and Internet patents.
From page 274...
... This could mean that one set of Internet business method patentholders pays even greater attention to nonpatent prior art than other groups (although these other groups still have as much or more nonpatent prior art than patents generally)
From page 275...
... PATENTS IN SOFTWARE AND BIOTECHNOLOGY TABLE 6 Nonpatent Prior Art References by Internet Patent Owner Status 275 Nonpatent Owner Status N Category Median Mean Std Dev Minimum Maximum Individual 33 AcadTrade 0 2.12 4.01 0 16 LargeEnt 204 AcadTrade 1 3.99 17.89 0 245 SmallBus 47 AcadTrade 2 8.11 18.02 0 85 Individual 33 CompIndus 0 0.33 0.74 0 3 LargeEnt 204 CompIndus 0 0.91 2.23 0 22 SmallBus 47 CompIndus 0 3.06 7.72 0 37 Individual 33 GovDoc 0 0.15 0.62 0 3 LargeEnt 204 GovDoc 0 0.08 0.56 0 6 SmallBus 47 GovDoc 0 0.28 0.93 0 5 Individual 33 0th 0 0.3 0.92 0 4 LargeEnt 204 0th 0 0.08 0.35 0 3 SmallBus 47 0th 0 0.21 0.75 0 4 Individual 33 PatAppsSearches 0 0.12 0.42 0 2 LargeEnt 204 PatAppsSearches 0 0.07 0.47 0 5 SmallBus 47 PatAppsSearches 0 0.09 0.35 0 2 Individual 33 PP 0 0.12 0.33 0 1 LargeEnt 204 PP 0 0.75 8.76 0 125 SmallBus 47 PP 0 1.11 3.01 0 13 Individual 33 SW 0 0.3 1.57 0 9 LargeEnt 204 SW 0 0.32 0.99 0 7 SmallBus 47 SW 0 1.17 3.99 0 20 Individual 33 UnivPubs 0 0.09 0.29 0 1 LargeEnt 204 UnivPubs 0 0.2 0.65 0 5 SmallBus 47 UnivPubs 0 0.09 0.35 0 2 Other Variables of Interest Entity Status and Size Small businesses own a larger share of Internet business method patents (Table 7)
From page 276...
... 107 (10.7) <0.0001 share of Internet business method patents (63.13%)
From page 277...
... , TABLE 9 Patents Compared by Region (General Patent Set Versus Internet Business Method Patents) Region Number of Internet Bus Method Patents (%)
From page 278...
... The Independent Groups t-test using log-transformed Days in USPTO (Table 10) showed there was no statistically TABLE 10 Days In the USPTO N Mean # of Days Std Dev Min Max General Patents 1,000 1,011.9 662.5 243 6,626 Internet Patents 1,423 889.7 245.7 154 2,428 Internet business method patents 1,093 885.56 244.35 154 2,198 I-Business Model 345 884.94 245.92 154 1,692 I-Business Technique 748 885.84 243.80 238 2,198 I-Software Technique 330 903.40 249.89 361 2,428 34For the various Internet patent categories, the t-test for log Days In USPTO produces a different result than the nonparametric Wilcoxon or median test: the t-test shows that there is no statistically significant difference in the time in USPTO between Internet and General patents, whereas the two nonparametric tests show that there is a significant difference.
From page 279...
... The major difference in Internet patents and general patents with respect to prior art was the amount of nonpatent prior art cited in Internet patents, with those patents having significantly more nonpatent prior art citations than the general population of patents. Although some observers criticize Internet business method patents for other reasons (such as allowing them to be patentable subject matter at all)
From page 280...
... . "Automated Business Methods." White Paper, Section III, Class 705, available at http://www.uspto.gov/web/menu/busmethp/ class705.htm.
From page 281...
... Note that we do not include patents in this category if the only likely business model is licensing out what we describe below as a business technique. The business method itself as described in the patent, rather than the licensing out of the method, must be capable of being a business model or distinct line of business.
From page 282...
... Example (21: Lucent Technologies System and method for scheduling and controlling delivery of advertising in a communications network. A system and a method for scheduling and controlling delivery of advertising in a communications network and a communications network and remote computer program employing the system or the method.
From page 283...
... The present invention provides a method and an apparatus for reassigning network addresses to a plurality of network servers by reconfiguring a client host coupled to the network servers. According to the invention, when there are changes to network connections, the IF addresses (i.e., network addresses)
From page 284...
... The computing network environment also has a gateway device besides the associated communication platform, which can be of any specific type, as well as at least having an initiating host and at least one receiving host that are electronically connected to the gateway device. The apparatus comprises a special function table for storing all possibly available functions that can be provided for all available commercial communication platforms as well as a memory location accessible by said gateway device for storing said special function table.


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