Occasionally, employees of telecommunications giant British Telecom troll through the company's 15,000 or so patents, looking for something of use. A couple of years ago, one of them found U.S. Patent No. 4873662, "information handling system and terminal apparatus therefor," which describes a method for linking documents over a phone network. Someone realized that that sounds a lot like an Internet link - and now British Telecom thinks it ought to get paid every time someone clicks on a Web page.
The patent, filed in 1976, covers an idea that's existed since at least the late '60s. Net pioneer Ted Nelson says he described the idea in 1969.
"I was mystified that someone would make such a claim at this point in history," says Nelson, who has labored for 40 years on Xanadu, his project for creating an alternate vision of the Net. "We're going over a speech I gave in 1969 that outlined something very much like linking. And I believe Doug Engelbart [inventor or coinventor of the mouse, word processor and e-mail] outlined pretty much the same thing as far back as 1967."
BT is hardly the only company taking advantage of old patents - and its claim has rekindled the debate over Internet-related software and business-process patents. In recent months a number of companies, including Amazon.com (AMZN) and browser maker Geoworks, have successfully enforced old patents on commonly used technology. Most famously, American inventor Jerome Lemelson, who died in 1997, turned hundreds of patents he filed over the years into a fortune, without ever actually producing a product. All he did was collect royalties and payments for things like cordless phones, cassette players, camcorders - even crying dolls - all from patents he had filed before such devices existed.
But after Amazon successfully defended its patent on "1-Click" shopping, CEO Jeff Bezos published an open letter calling for patent reform. "I now believe it's possible that the current rules governing business method and software patents could end up harming all of us," he wrote.
Not everyone sees it that way. "Patents encourage people like us to invent stuff without the fear someone else will steal it," says Dave Grannan, president and CEO of Geoworks, which recently enforced a patent on the presentation of data on handheld devices. "It gives us an advantage in business. We'll be able to sell our stuff for less than others can because they have to pay us a licensing fee first."
"This is as offensive as you can get," counters Ben Linder, VP of marketing at Phone.com (OPWV), which has sued Geoworks over the legality of its patent. "This kind of thing can only stunt the growth of a new industry."
The O'Reilly Network open-source Web site lists 18 "controversial patents," including Web-page downloading, online air-ticket sales and "display of spherical images."
"A patent like [BT's] reflects a failing of the Patent Office from years ago, when computer science wasn't well understood," says Jim Gatto, a patent lawyer with Hunton & Williams (dossier) in Washington. "Now we have to see how well the system responds to a challenge."
The system in Europe has yet to face such a challenge: European law forbids software patents. The European Commission, under U.S. pressure, is currently urging European governments to legalize them.
In response, the Eurolinux Alliance has launched its "Campaign for a Software Patent-Free Europe."
"BT's move," the group said in a statement last week, "gives a brilliant overview of the great dangers of software patents in the information society."
