Stanford CIS

Using the Courts as Your Sales Team for Your Business Method Patents

By David Olson on

So as I was working on my article on business method patents (spoiler: they're bad), I was inserting a brief discussion of the recent Ex rel Lundgren decision wherein the Board of Patent Appeals held that the "technological arts" test is no more (or, according to the Board, never was).  I decided to do a little more web research on Lundgren because his patent application is such an odd one -- it's for a method of compensating managers of private firms in an oligopoly market so that they don't collude to raise prices.  Obviously no oligopoly firm would want to use such a method, because if it works it would eliminate the possiblility of oligopoly profits.  So the only way to impose the method that I can see would be through govenment regulation.  But how likely is it that the federal government would choose to pick up Lundgren's patent and apply it as regulation?  Very unlikely, I would guess.

But not so fast, not only has Lundgren sought to patent this method of economic regulation, a little web-sleuthing reveals that in 2000 he filed an amicus brief in the Microsoft antitrust case with the goal of convincing the court to use his method as the remedy applied against Microsoft (i.e. split up Microsoft and use Lundgren's method to regulate the resulting mini-Microsofts to prevent oligopoly pricing).  Lundgren forthrightly admitted to the court that if his method were imposed by court order, he "could earn a fortune."

How's that for monetizing IP?  Not only do you get a patent monopoly from the government, you use the government to force companies to use the patent, and pay you accordingly.  You gotta hand it to Lundgren, he thinks big.

NB: For an excellent summary of the Lundgren opinion, see Packets Vol. 3.3.

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