ATENTS for methods of doing business have existed in small numbers at least since the early 1980's, but only in the mid- 90's did they suddenly begin to loom large in the economy. It was then that electronic commerce created a new arena for traditional business practices and several patents were granted that appeared to give exclusivity for such practices to some Web-only companies. As people sat up and took notice of the trend, some did not like what they saw.
One of the most recent to express displeasure was Representative Howard L. Berman, a Democrat representing a Los Angeles district. Last week, Mr. Berman, along with Representative Rick Boucher, Democrat of Virginia, announced legislation to "provide that where an invention is new only in that it uses a computer to implement the business practice," the Patent and Trademark Office "will presume the invention to be obvious, and thus, not patentable."
The bill would also require the Patent and Trademark Office to publish all business-method patents 18 months after they are filed, even if they have not yet been granted. It calls, as well, for giving opponents of an awarded patent a means for challenging it without having to resort to a lawsuit.
The two Congressmen said they were concerned that business-method patents were being issued without enough evidence whether an idea was already in the public domain.
"This is particularly difficult with Internet and high-tech practices," a press release by Mr. Berman said, "since very little published information exists." He cited a patent that covers the choosing of a car color when buying a vehicle over the Internet, and asked: "Given that auto salesmen have never patented their approach on the salesroom floor, is there a published record of activity of auto salesmen? And was this record considered in the drafting or examining of the patent?"
The bill could raise questions on what the use of a computer means, since business-method patents might involve software, hardware and Web sites including Internet portals. And in the past, any hint of publishing patents before they are issued has set off vigorous opposition in this country, where there is a long tradition of protecting an inventor's secrecy until the patent is awarded.
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For now, the bill amounts to little more than a gesture, as it was introduced two days before the end of the regular Congressional session, and it is impossible to know whether it will get attention next year. Both men sit on the House Judiciary subcommittee on courts and intellectual property. As the ranking minority member, Mr. Berman could become the chairman if the Democrats regain control of the House in next month's elections. Of course, he could also be defeated for re-election, though political analysts say that is unlikely.
In any case, Mr. Berman said he did not offer the legislation for immediate action. "I am not taking a position one way or another as to whether business methods should be patentable," he said in the statement. "I tend to think they should be, but I could be persuaded otherwise. My intent with this legislation is to stimulate the dialogue."
Neither Mr. Berman nor Mr. Boucher represents a district with a large number of high-technology companies. But according to the Center for Responsive Politics, a nonpartisan group that tracks political contributions, Mr. Berman's re-election campaign received nearly $150,000 last year and this from political action committees and individuals connected with the entertainment industry, and Mr. Boucher accepted just over $80,000 from PAC's in the entertainment, publishing, telecommunications and computer industries.
These industries are weighted toward traditional companies that own the information and entertainment "content" increasingly being sold over the Internet, and that are developing the hardware and software for the future of e-commerce. Such companies are not enamored of the idea that young high-technology companies like Amazon.com might patent and own a method of conducting digital business like the "one-click" online purchase.
Across the Capitol, the Senate Foreign Relations Committee did not vote last month on the long-pending international trademark agreement known as the Madrid protocol, despite intense lobbying by the International Trademark Association. Both the White House and Congress have supported the accord, which would allow one-stop international trademark processing — meaning that people could apply for or renew a trademark in nearly 50 countries simply by filing the paperwork and paying the fee at the United States Patent and Trademark Office.
Leaders of the trademark holders group had not expected last-minute opposition over a section of the agreement from one industry — liquor distillers. Their outrage originated with the French company Pernod Ricard, which has been locked in a trademark battle with Bacardi Ltd. over a Cuban rum brand name, Havana Club.
The contested section of the protocol is based on a 1999 law that has roots in the economic embargo against Cuba and the industries that were seized there after Fidel Castro came to power four decades earlier. The law prevents anyone other than the original owner of a Cuban trademark from paying to register or renew it with the Patent and Trademark Office. It says that "designated nationals" — like the Cuban government or any Cuban national — do not qualify. Thus, the law effectively strips the Cuban company that controls the rum name Havana Club from enforcing or defending a trademark in this country.
Bacardi, which leads the $3.5 billion-a-year rum market, began selling a rum of its own called Havana Club in the United States in 1995. A Cuban holding company sold a rum with that name elsewhere in the world. The Cuban company went to United States courts to stop Bacardi from using the name in this country, and also licensed the Havana Club trademark to Pernod Ricard.
Bacardi had been a supporter of the 1999 law. But now the European Union has challenged the law, saying it violates World Trade Organization agreements.
Last month a W.T.O. panel began looking into the distillers dispute. And last week, the Supreme Court turned aside an appeal from the Cuban company to stop Bacardi from using the trademark.
But by then, what the International Trademark Association had expected to be a smooth adoption of the Madrid protocol had already become tangled in the distillers fight.
In the days before the Senate's scheduled vote, Pernod Ricard began a public campaign against the 1999 law, and Congress, which has been considering the Madrid protocol since 1989, put off its vote once again.
