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Article Title

E-Obviousness

Abstract

As patents expand into e-commerce and methods of doing business more generally, both the uncertainty and the risk of unjustified market power that the present approach generates suggest a need to rethink our approach to nonobviousness. If courts fail to enforce the nonobviousness requirement and allow an individual to obtain a patent for simply implementing existing methods of doing business through a computer, even where only trivial technical difficulties are presented, entire e-markets might be handed over to patent holders with no concomitant public benefit. If courts attempt to enforce the nonobviousness requirement, but leave undefined the extent of the advance required to establish nonobviousness, wide variance in the doctrine's application to particular cases will continue. The resulting uncertainty regarding patent enforceability will substantially undermine the patent system's ability to encourage innovation and serve the public interest more generally. In an attempt to define the extent of the advance that should be required, this article reexamines the economic justifications for the nonobviousness requirement and for the patent system more generally. Traditionally, courts and commentators have justified the nonobviousness requirement on the ground that patents are monopoly rights, presumptively undesirable, and so require "drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not." Under this traditional perspective, patents, like monopolies more generally, impose undesirable deadweight losses. To minimize such losses, the traditional view suggests that we should grant patents only to "those inventions which would not be disclosed or devised but for the inducement of a patent." Only for such inventions are the benefits from the patent likely to outweigh the monopoly costs it generates. The nonobviousness requirement plays a central role in this process. By requiring inventions to demonstrate a significant level of technical advance before they may receive a patent, the nonobviousness requirement helps separate those inventions that would likely have been created, developed, and disclosed even in the absence of a patent from those that would not. The requirement thereby tends to ensure that only deserving inventions receive patents.

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