So you'd agree that if things were right in the world, we should all be using the original version of WebCrawler today, because it pioneered the idea of web search, which these other horrible idea-stealing companies like Google took and re-implemented?
Do you really think that's the way business should work, that whoever first notices that a problem needs solving (and bothers to submit a patent application) should have a long-term monopoly on solutions to that problem?
Personally, I'd prefer that the means of solution, if non-trivial enough, was protected, rather than the entire set of all possible solutions to a problem.
If there are huge economic impact that are for the worse as a result of patenting non-obvious solution, than we should scrap the system altogether.
That's exactly what patents are.
If the problem is defined as "send images of checks instead of checks", then DataTreasury is trying to assert ownership over the entire problem rather than their particular solution - they're claiming that any solution that deals in images of checks instead of physical checks infringes, regardless of how it's implemented.
If you define the problem as "don't send physical checks", then sure, the particular solution, "send images of checks instead" is what they're asserting ownership over.
But in that case, the non-triviality of the solution is seriously questionable. There's no engineering insight at all required to come up with that, and it's one of the first things any group of people would think of when presented with the problem. The entire difficulty is all in how to actually implement such a system (and pre-1994, those implementation details made it unlikely that such a system would work).
IMO, in a situation like this, what the patent should cover is the new stuff that DataTreasury actually invented (and I agree that there is some non-trivial content there), not the entire high level problem that their invention allowed them to solve.
So many patents these days (in software, at least) are just as you describe: cases where someone realized that a problem existed, came up with a quite straightforward solution, and patented it.
We need Congress or the courts to tell the PTO that "obvious" means "the solution is straightforward given the problem". And then, of course, we need to get the PTO to hire software engineers who actually know how to build things, so they know what that means.
The US banking system feels pretty backwards in terms of its reliance on checks where Europe has adopted electronic transfers. If the banks actually wanted to innovate here, they'd introduce a real electronic transfer system. The idea of scanning checks and sending around images (and presumably one day constructing virtual check images electronically and sending those) strikes me as remarkably backwards, but nonetheless a very clever solution to a real-world problem.
If you build a better mousetrap and try to sell it, but I decide to build my own copy of the mousetrap for my own use, wouldn't that be non-infringing?
It's not clear to me whether in this case the check scanning systems were in fact independently invented; there's certainly a hint in the article that meetings took place and the banks only implemented the idea once it has been disclosed to them ('willful infringement' results in triple damages, which could well explain the magnitude of the licensing amounts)
I'm not necessarily sticking up for this patent, and I tend to believe the patent system is completely fouled up for software companies, but we can do better at analyzing the issues than just automatically saying "that's brain dead obvious".
1. Boggle rule. In the game Boggle when two players come up with the same word neither get credit. If from a given time of filing a patent someone else files a similar patent both are rejected.
2. Virgin engineer rule. Take a group of people competent in the field of the proposed patent but without any knowledge of the patent. Give them the problem the patent purports to address. If in a single day their solutions substantially match the proposed patent, reject the patent.
The first is reasonably sound. A potentially very interesting idea is to allow anything filed within 3 months of filing to be considered "prior art", although I'm not sure this would make a huge difference in practice.
The second would be very labor intensive if done in practice. Doing this as a thought-experiment is actually how non-obviousness is determined by patent examiners. If an engineer of "ordinary skill in the art" would think the approach obvious given the prior art, then the patent is deemed obvious. I don't know if it's ever been tried to locate 'virgin engineers' to demonstrate that a patent is obvious.
So the second idea is how the system works, although the examiner is supposed to be the group of engineers.
Recognising the problem is often the innovation.
As Henry Ford said, "If I'd asked customers, they'd have said that they wanted a faster horse."
It can be an innovation, but it can be very hard for the PTO to tell just how much of an innovation it is. What happens a lot, I believe, is that the emergence of a new technology creates new possibilities, but the actual application of the technology to those possibilities raises certain problems that have to be solved. The existence of those problems is not obvious in advance of the new technology, but once people have it in front of them and start to play around with it, it starts to become more and more likely that someone will think of those problems. The evidence for this is the not infrequent occurrence of simultaneous or near-simultaneous invention.
So while recognizing the problem might be an innovation, it might be an almost inevitable innovation. Furthermore, much of the credit might arguably belong to the enabling technology that made a solution possible, and to the industry that developed and commercialized that technology.
To make an extreme simile, one could say the Internet is like the technology to allow us to colonize the moon, and so many of these software patents are like people booking trips to the moon, arriving, and then staking a land claim. It wasn't very much their own intrepid exploration that made it possible for them to stake that claim; there might have been a little of that, but mostly they're dependent on the massive effort, by an entire industry, that made it possible for them to get there in the first place. So the policy question is, have they really contributed so much that we should reward them with that land claim?
Or, it might not.
> Furthermore, much of the credit might arguably belong to the enabling technology that made a solution possible, and to the industry that developed and commercialized that technology.
So? They're free to recognize the capabilities and invent.
However, that's a red herring because you also don't want them to be able to get patents for recognizing the possibilites.
I get that you don't like "recognize the problem" inventions. Howver, can you argue against them on the basis of "it was inevitable" or "someone else should have gotten the credit"?
Which reminds me - can you name three inventions that weren't inevitable and how you know? I'm trying to figure out if your argument against "recognize the problem" patents applies more generally.
Was there a flood of overlapping patents for similar technology at the same time?
I brought up my entry into the industry in 1994 because '94 wasn't a slow year for tech at all. It was about a year before the bubble started blowing up, but there were lots and lots of small companies doing software.
Patents do not exist to give you a an easy monopoly on any random idea (or at least they shouldn't). Patents exist to give companies an incentive to invest into costly research and then be able to publish the ideas, while getting some time to recoup the cost of the investment.
The litmus test is, would this idea have seen the light of the day without a lot of upfront cost? If so, it is not in the interest of society as a whole to grant a legal monopoly here.
Just my $0.02.
Now their investors are getting some money back by licensing the patents to the banks, so they'll (hopefully) be willing to invest in innovative startups that have to work with incumbents again.
Next time a small innovative company comes along, the banks are (hopefully) going to think twice before just deciding that they can easily re-implement their ideas.
This doesn't seem to me like a particularly good example of the patent system gone wrong. To me, this looks like exactly what the patent system is supposed to be: protection for those with innovative concepts, so that they can have the opportunity to commercialize their inventions without incumbents simply cloning their hard work.