Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Litigating the Business Method Patent: Pitfalls for Unwary Defendants

By William G. Pecau and Seth A. Watkins, Ph.D.
August 31, 2006

The lion's share of business method and e-commerce patents is grouped in the now infamous Class 705 at the U.S. Patent and Trademark Office ('USPTO'). This specialized class that encompasses data processing involving financial, business practice, management, and cost/price determination has experienced a surge in popularity rivaled only by the likes of nanotechnology. From 2001 to 2005, more than 5000 U.S. patents were issued in Class 705. Growth in 705 patenting has been so pronounced that this 5-year period has produced about the same number of new patents as the previous 15-year period.

Fear of the 705 patent troll ' the small entity or holding company without a tangible product that wields an intangible asset in the form of a patent deed in order to procure large damage awards or settlements ' has recently led Class 705's most prominent litigation targets to ask Congress to reform the patent laws to provide relief. Despite this legislative wrangling, the Class 705 plaintiff remains potent, aggressive, and seemingly ever-present.

To the dismay of the traditional Class 705 patentees in the computer and information technology industries as well as the financial services sector, a new brand of posturing by patent plaintiffs and plaintiffs' counsel now presents defendants with a difficult assortment of issues from a fairly disturbing perspective. These companies are not being sued by a competitor. Nonetheless, they are being drawn into showdowns involving a complex matrix of business and litigation risks.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

Fresh Filings Image

Notable recent court filings in entertainment law.