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Internet Society Panel on Business Method Patents
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Lastly, why is this - as a policy matter - important? I think it's important for several reasons. The patent system has traditionally been used in this country by people - the little guys - who are seeking to gain a competitive advantage. In some ways, people have made the argument - I don't know whether this is true or not, I'm not an expert on it - but the argument has been made that the Internet today is where the automobile industry was in some ways in the turn of the last century. There were 500 or 1,000 automobile manufacturers and eventually consolidation took over the market and today we have three automakers. Well, the patent system is a way by which the little guy can gain the toe-hold. The little guy can take that innovation and go to the venture capitalist and go to the bank and get the funding he needs to get that business built and growing.



I think that the possibility of his consolidation is a real one in the Internet environment, as I understand it. We're starting to see some of it now due to other forces. If you're going to order books online, you're probably going to go to Amazon.com. If you're going to order airline tickets online, I know where you might go, too. That doesn't mean that other people can't get into that business, but because of the strength of the brands now and other things, I think you've got other barriers to entry and the way that others can compete now with that is to come up with a better idea and one way to exploit that idea is through the patent system.

So, that's my background. That's a little over five. I went way over fivbe and I apologize for that.

Jay Walker: I'll use less then. You know I'd like to just start by two thank yous. One, you know, Vint and Bob really deserve an enormous thank you for, you know, the contributions they've made in creating a medium that so many millions of people, including all of us in this room, use and I think you're following a long tradition of volunteerism in the country where, many of us in the country, are constantly volunteering to make the country a better place, are constantly putting our time and energy in to teach the young, to help the sick, to work. I think all of us in this room volunteer. I think we all appreciate the incredible role that volunteers do in giving of their time, giving of their assets, in giving of themselves so that we as a society are a better place. We don't mandate volunteerism, of course, from others as a society. That doesn't mean we don't appreciate it. We do. I'd also like to say thank you - how many people in this room either have used Priceline or a friend or a family member has used Priceline? Just raise your hands so I can - I'd like to say thank you to all of you as my customers.

Vint: You didn't ask how many were satisfied, however.

Jay: OK, well, let me take that advice. How many of you were satisfied with the service you received, or put it this way, how many of you were dissatisfied, since we saw how many there were, how many of you were dissatisfied? So, it looks like one, two, three, four, five, and it looked like there were about 75 or 80 hands up earlier. I apologize to those of you who are dissatisfied. If you see me after, I would be interested in your suggestions in how we can make it better, since obviously we did something wrong and no business survives by doing wrong by its customers. None.

Secondly, you made an interesting point at the beginning of the discussion here where you said that you contributed TCP-IP as a contribution and, if you hadn't contributed - your exact words I think were: some other protocol would be in use today. I think that's a very interesting point of view. What you're saying is, if we hadn't invented it and given it to the world, somebody else might have invented it and given it to the world, too, or somebody else might have invented it, like Ethernet, or something else. What's very interesting about that thought is it's not an exclusive idea. People choose to give things to the world and we're often better for it and sometimes commercial organizations create things like Ethernet and they choose not to give them to the world and we're also better for it. In fact, in our society, we have roles for volunteerism and we have roles for commercialism, which is very proprietary, and we balance those roles in our society all the time as we rely on commercial enterprise to deliver benefits to millions of people and we rely on volunteerism to deliver benefits to millions of people.

I think there are three large issues today and then I'll hand the mike to my right. And it's easy to take this debate and make one debate out of it, but there's actually three debates going on. The first debate is about property. Should there by property here? Is the notion of intellectual property applicable to a place like the Internet and does the definition of property need to be reconsidered? Should there be music that is property or should music be free? Should there be software that is property or should anybody be allowed to copy Microsoft's operating system? Should there even be property here? And that's a debate that's remarkable in its depth because there are people of good faith on both sides who believe that property is somewhat inappropriate in this space and so that would be the first debate.

The second debate is really about the quality of the property itself. In other words, if we look at patents as a form of intellectual property, there is a debate whether the property, a right granted by government, is being correctly administered. And so there's an argument whether examiners have the proper tools, whether Congress provides the proper funding, whether the system as it operates allows for the proper examination, whether the union rules as Todd is forced to work with, allow for the necessary quality he's looking for. These are all legitimate debates and so there's a second debate here about, if you will, the quality of granting property as if we were debating the quality of title search firms that have a title search on your house. Today we take that quality for granted. A title search is a title search, but in Todd's world, that isn't so easy to take for granted. And so there is a very big challenge and debate in that area.

The third debate is whether within the property itself there should be a separate class of property for business-method patents. Should there be a distinction of property? Now, historically, there hasn't been in the patent system a distinction of property, but in society we do that all the time. We distinguish property rights and competitive property rights in our world all the time. It's not that unusual. It doesn't happen in the patent system and historically hasn't happened. So it's a debate.

Should there be a new class of property within the patent system which may or may not need improvements to be of higher quality, which itself is a subset of whether there should be property at all. And so as we talk about these issues, and I'll hand it over to Tim now, I would frame the debate as almost three separate debates and, as we ask questions, I would argue that we need to ask the question: At which level are we arguing? Are we arguing property versus no? Are we arguing quality of property creation and its methods? Or are we arguing whether or not property itself should be allowed or distinguished with a new class as a subset of all other property? So that's my story and I'm glad to turn it over to Tim.

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