What Happened to Prior Art?

I wrote below that I am not an economist, but I am really, really not a patent lawyer.  However, I find this story totally mystifying:

Apple Computer may be forced to pay royalties to Microsoft for every iPod it
sells after it emerged that Bill Gates's software giant beat Steve Jobs' firm in
the race to file a crucial patent on technology used in the popular portable
music players. The total bill could run into hundreds of millions of dollars.

Although Apple introduced the iPod in November 2001, it did not file a
provisional patent application until July 2002, and a full application was filed
only in October that year.

In the meantime, Microsoft submitted an application in May 2002 to patent
some key elements of music players, including song menu software.

I have already become suspicious that the patent process as applied to software and online concepts (e.g. the Amazon "1-click" purchase patent) is broken.  For me, this is more evidence.  How can a Microsoft patent filed in May 2002 have any validity if it attempts to patent concepts already embodied in a competitive product on the market in 2001?

I once found myself in the middle of one of these patent battles several years ago.  I was on the management team at Mercata, an online shopping site who's bit of uniqueness was that it had three or four day purchase windows for various products, and the price of the product would fall as more people signed up to purchase it.  Kind of a fun, with some interesting viral marketing potential if it had caught on, but patentable?  I mean, doesn't Adam Smith have prior art on this?

Hat tip to Prof. Bainbridge.


  1. Chris Fritz:

    The big problem I see is that companies are patenting concepts rather than implementations. If I understand patenting correctly, you're supposed to patent an implementation. You're supposed to patent your design of a mouse trap, and the US Patent Office is letting Microsoft, Apple, and others patent "any method of capturing a small mammal." Then something happens where a big company can sue a small company for infringing on one of its thousands of patents on a "concept"! I'm a capitalist, but I'm against this method of maintaining a monopoly, or status above upstarts.

  2. markm:

    Chris: Maybe the PTO needs to go back to requiring working models.

  3. Glen Raphael:

    The reason the article is mystifying is that it's bogus. It's groundless speculation by some reporter, reprinted as fact by other reporters.

    (1) Microsoft's patent hasn't been approved yet either and might still be rejected for the same reason (prior art)
    (2) iPod doesn't clearly infringe Microsoft's patent.
    (3) Even if it did, Microsoft hasn't filed a lawsuit and isn't likely to.

    So sure, Apple /may/ be forced to pay and the total /could/ be millions of dollars. And monkeys /may/ fly out of my butt. Or not.