Why Business Method Patents?

Abstract

Though business method patents have generated enormous controversy for now more than a decade, too little attention has been devoted to a crucial question about timing: Why has the controversy over business methods arisen now? Critics of business method patents have argued (or have assumed) that the current increase in business method patenting is attributable to activist judges who expanded the patent system into a field where they are neither useful nor desired. That “activist court hypothesis,” however, suffers from numerous flaws and fails to provide a convincing explanation for the rise in business method patenting. An alternative explanation is that the patent system merely followed as technology advanced into, and transformed, business fields. That transformation is readily verified through numerous objective changes, including a signal alteration of the discourse within business literature; the proliferation within universities of engineering courses and departments devoted to business fields; and even a shift in the hiring patterns of leading financial firms. If anything, courts have been laggards, not leaders, in recognizing and accommodating this ongoing industrial revolution.