BUSINESS METHOD PATENTS, PHARMING & PHISHING

There may have been a Dot com bubble, but there certainly is also an Internet juggernaut. E-commerce continues to grow dramatically. (Obviously we have all heard of Google and eBay.) This growth can be confirmed in the published business news. For example, VeriSign has reported its business activity increased over 30% in the last year.

E-commerce continues to grow faster than the law and regulatory schemes intended impose order. It is also growing in the face of the real threat of consumer identity theft. The theft of credit card and identity information from Choicepoint, Lexis Nexis and now CardSystem Solutions has been well reported. (There is an excellent article by Tom Zeller in the June 21, 2005 New York Times entitled “Black Market in Stolen Credit Card Data Thrives on Internet”. The article describes the operation of this market and the activity of entities named “Zo0mer” and “Zer0”.

The rights and duties arising from the electronic transmission and storage of personal data are far from clear or settled. The fraud schemes are creating a new vocabulary, e.g., phishing, spoofing and pharming. Criminal investigations, e.g. Operation Firewall, have had minimal impact.

This growth is also evident in patent prosecution. Cisco Systems recently announced filing patent applications for business method software and technology intended to prevent pharming. In view of the billions in reported annual losses, this technology could be valuable property. However, there are continued delays in the USPTO examination of business method patent applications, a very large percentage pertaining to on line or electronic communication. The delays in obtaining a first office action from the USPTO in this art can exceed the 3 year model the Patent Office has established for the entire patent prosecution process.

Part of the delay is attributed to the difficulty of providing a skilled and proper examination of applications dealing with this esoteric and evolving art The recent changes proposed for USPTO examination may reflect an acknowledgement by the regulators that the industry can do a better job in weeding obviousness out from novelty than can the examiners. For example reference the Proposed Patent Opposition Procedure. These changes are intended to speed the patenting process and reduce infringement litigation and costs. Included in the benefits will be increasing the incentives for bringing fraud preventive technology to the market.