Computers, Business Methods, and Patents
An Ethical Investigation
by Barbara Hilkert Andolsen and Alan A. Andolsen

In a computer enabled society, control of knowledge will be the most important form of property rights in the future. It will be a major source of wealth in the post-industrial economies. Intellectual property holders in the wealthiest nations will work to control the use of knowledge in ways that may be detrimental to the well-being of the less developed nations.

In this paper, we will examine a controversial form of property right in the United States - the business methods patent. Until recently, an applicant for a patent had to show that the idea behind the patent could give rise to a tangible object. However, with the advent of computer technology, US courts were forced to grapple with the question whether computer software was sufficiently tangible to receive patent protection.

Patents are governmentally sanctioned monopolies granting the patent holder exclusive control over the use of the patented object or process for a specified period of time. The patent holder may demand a licensing fee or refuse to allow others to make use of the patented object or process at all. Under present US law, there are few "constraining [legal] doctrines" that curb "the proprietary rights associated with granted patents."(1)

As a result of a 1998 Federal Circuit court ruling,(2) persons may now apply in the United States to patent distinctive, useful methods for conducting business. One of the most talked about business methods patents has been Amazon.com's patent on its "one-click" method for conducting an Internet purchase. During the critical 1999 Christmas shopping season, Amazon was able to use its patent protection to prevent its competitor Barnes and Noble from implementing an equally convenient method for finalizing an Internet purchase. In granting business methods patents, the United States Patent Office, under the guidance of the federal courts, has departed from the practice in Europe under the European Patent Convention which declares that "schemes, rules and methods for . . . doing business" cannot be patented.(3)

Roman Catholic social ethical teachings bring an important perspective to questions of property rights, including patents on business methods. The Roman Catholic approach stresses the social origin of intellectual property and the social obligation to benefit the entire community that is binding on the owners of intellectual capital.

Catholic tradition places an emphasis on the sharing of property in ways that meet the basic needs of all persons. The most ancient way to express the insight that property must serve the needs of all members of the community is the concept of the universal destination of the goods of creation. According to this teaching, God created the earth with its rich natural resources to benefit all human beings. As John Paul II declares, "man, using his intelligence and exercising his freedom" transforms the resources of nature into the goods necessary for survival and even comfort. (Centesimus Annus 31) While the emphasis in the doctrine of universal destination of the goods of creation has often been on God's generous provision to humanity of natural resources, God is also the creator of the human person with all the person's innate intellectual gifts.

This emphasis was somewhat mitigated by an emphasis on the right to private property when the social teaching of the Catholic Church was first declared. In Rerum Novarum, Leo XII vehemently defended a strong individual right to private property. He adopted an analysis of the genesis of property rights that was very similar to that of John Locke. Leo also envisioned human beings mixing their labor with bountifully available land, and their labor creating crops and other goods. These tangible objects become the legitimate property of the ones whose labor brought the useful goods into existence.

Throughout the twentieth century, Catholic popes have steadily curbed the rights of property owners by asserting powerful moral claims on behalf of the whole community - without directly challenging Leo's teaching on the right to private property. One important advance on Catholic thought was John Paul II's concept of a "shared workbench" elaborated in Laborem Exercens. The human person, laboring to transform the goods of the earth, brings forth not just consumer goods, but all of our tools. The human person creates technological implements out of the resources of creation.

According to John Paul II, technology is based upon an unfolding interplay of natural resources and human effort within human history. This approach intersects with the more traditional notion of a patent as valid only when its creator can give tangible form to the new idea. John Paul II emphasizes that work rarely follows the individualistic model of one person struggling to subdue nature. Instead most human work, including innovative business methods, especially software, is the product of human teamwork.

In Centesimus Annus, John Paul explicitly approves the entrepreneurial rights of the person who foresees new human desires and finds innovative ways to satisfy them. Entrepreneurs and innovators increase the welfare of the community and deserve a fair return. However, that return is must be carefully balanced against social claims on property rights. [Centesimus Annus, 32] In addition, if property rights are used in a way that limits the ability of others to engage in creative activity or diminishes the good of the community, then that form of property is morally illegitimate. As boldly stated by John Paul II, "the right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone." [Laborem Exercens, 14] The only legitimate moral purpose for patents is to balance the inventor's claim for a just return on ingenuity and effort with the community's claim to a share of the return generated in an interplay between social knowledge and individual creativity.

(1) John R. Thomas, "The Post-Industrial Patent System," Fordham Intellectual Property, Media and Entertainment Law Journal, 10 (Fall 1999).

(2)State Street Bank & Trust C. v. Signature Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998).

(3)Convention of the Grant of European Patents, as amended by Decision of the Administration Council of the European Patent Organization of December 21, 1978, art. 52.

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