The trickle of business method patents issued by the United States Patent Office became a flood after the State Street Bank decision in 1998. Many scholars, both legal and economic, have critiqued both the quality of these patents and the decision itself. This paper discusses the likely impact of these patents on innovation. It first reviews the facts about business method and internet patents briefly and then explores what economists know about the relationship between the patent system and innovation. It concludes by finding some consensus in the literature about the problems associated with this particular expansion of patentable subject matter, highlighting remaining areas of disagreement, and suggesting where there are major gaps in our understanding of the impact of these patents.
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Paper provided by EconWPA in its series Law and Economics with number
0401001.
Find related papers by JEL classification: K3 - Law and Economics - - Other Substantive Areas of Law O0 - Economic Development, Technological Change, and Growth - - General L4 - Industrial Organization - - Antitrust Issues and Policies
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