OT US Patent Office to Overhaul Internet Area

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Wednesday March 29 2:53 PM ET

U.S. Patent Office to Overhaul Internet Area

By Tim Dobbyn

WASHINGTON (Reuters) - The U.S. Patent and Trademark Office said on Wednesday it was overhauling its scrutiny of applications for online business patents which can grant exclusive rights to methods of electronic commerce.

Patent Commissioner Todd Dickinson said second reviews of applications would become standard and he outlined efforts to make better searches of previous inventions and industry practices.

``We think this second pair of eyes will be very helpful,'' said Dickinson in notes prepared for a speech he is due to make in San Francisco later Wednesday.

The changes come amid criticism of existing patents which have staked out control of basic business methods on the Internet that some critics charge are neither new nor unique.

Online retailer Amazon.com Inc. (NasdaqNM:AMZN - news) for example has patented its ``1-Click'' express ordering process and has sued rival Internet bookseller barnesandnoble.com (NasdaqNM:BNBN - news) for alleged infringement of the technology.

Priceline.com Inc. (NasdaqNM:PCLN - news) has a patent on its ``name your price'' method of selling products on the Web.

Dickinson said new guidelines for patent examiners looking at computer-related inventions would be made available next month. His agency would also double the sample size of computer-business method patents that get a final quality check.

Finally, a meeting with representatives of the e-commerce industry and other interested parties would be held soon, most probably in July, Dickinson said.

The pace of applications for electronic business patents has surged since a 1998 federal appeals court decision that upheld State Street Bank & Trust Co.'s patent on calculated mutual-fund returns.

Robert Gorman, an attorney with Fulbright & Jaworski in New York, welcomed the additional scrutiny but was concerned the Patent Office has already lost staff to higher-paying technology companies.

He said some Internet patents were serious but others were opportunistic licenses to litigate against competitors. ``Those people are more effectively culled out through a thorough examination process,'' he said.

In response to criticism of its lawsuit, Amazon.com recently proposed cutting the lifespan of business patents by at least two-thirds.

``I now believe it's possible that the current rules governing business method and software patents could end up harming all of us,'' Amazon Chief Executive Jeff Bezos said earlier this month.

Cutting the lifespan of such patents to three or five years from the current 17 years ensured businesses a good return on new ideas but was short enough to discourage many people from filing for patents in the first place, Bezos said.

Joshua Bressler, an intellectual property lawyer, said patents gave inventions protection in exchange for disclosure to the public to assist in improvement of technology.

``In light of how quickly technology is developing, this (17 year) number probably is too high,'' said Bressler, with Shulte Roth & Zabel in New York.

-- viewer (justp@ssing.by), March 29, 2000

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