The Patent and Trademark Office may soon grant a business method patent to an individual that could be worth a possible $2.4 billion in licensing fees and impact the actions of internet business giants. The patent will surely add to the controversy surrounding business method patents which now play a large part in electronic commerce.

This patent is proposing to cover any computer-to-computer international transaction made via the internet. The inventor, Edward Pool, developed his method after realizing the difficulties involved in international trade. When trading across borders, currency fluctuation and changes in duties and freight rates make judging a product’s price difficult. His method helps streamline international trade by combining currency conversions, electronic customs forms, freight rates and even services such as insurance and letters of credit all into one computer program.

Pool’s company, DE Technologies, currently works out of a one-room office, but his patent may allow him to charge business giants, such as I.B.M., a percentage of each international transaction they perform. With even a minimal percentage of international internet transactions, the patent could be extremely lucrative.

The patent will undoubtedly add to the uproar over business method patent policy. Many feel the U.S. Patent Office allows too many suspect patents, particularly in the business method area. Critics argue that these patents are not novel or non-obvious because they are simply combining well-known ideas with the internet. Even if the patents are generally valid, some worry they could have a negative impact on e-commerce. Other business method patents which have played a part in e-commerce include Amazon.com’s patent for their one-click system and Priceline.com’s patent for reverse actions on the web. Both have spawned high profile lawsuits.

Mr. Pool and his company argue that they are the type of small business which the patent system should protect. Regardless, they are sure to face some serious challenges, but if it stands up to scrutiny, it could result in sizable profits.

The Wall Street Journal, William M. Bulkeley August 28, 2000.

RELATED LINKS:

http://www.wsj.com/ The Wall Street Journal.

http://www.detechnologies.com/ Company web site. Contains some discussion of the patent as well as a copy of the patent.

http://www.uspto.gov Patent office web site. Site contains an article in response to general criticism concerning business method patent criticism and a searchable patent database.

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