November 07, 2006
SIUC researchers examine 'business method' patents
CARBONDALE, Ill. -- Every time you "one-click" order an item on amazon.com, you are using a business method patented by the online company. Scholars at Southern Illinois University Carbondale's College of Business and Administration are conducting research on these types of patents and how they benefit businesses.
In December, SIUC management professor Peter P. Mykytyn, Jr., along with management lecturer Nancy L. Martin will present a paper titled "Business Method Patents: Do Owners Gain or Sustain Competitive Advantage?" at the International Conference on Information Systems in Milwaukee, the most prestigious gathering of information systems academics and research-oriented practitioners in the world.
"I am excited about this paper because it deals with a fairly new management information systems topic, i.e., software patents and strategic advantage for organizations," Mykytyn said.
For more than 20 years, computer software has been patentable. More recently, software that automates and pertains to business methods can be patented as well.
"A business method patent, for example, would be amazon.com's one-click ordering system and priceline.com's reverse auction system. Businesses that invest the time and money to patent software, including business method software, must do so for a reason. Is it to obtain licensing revenue? Make a name for themselves? Protection against competitors? Some sort of competitive advantage? These are questions I am examining," Mykytyn said.
The increase in electronic commerce prompted businesses to acquire copyrights and trademarks. "Domain names are trademarked, for example. Linking to another company's Web site without permission or placing another company's link on your company's Web site cannot be done without permission for fear of violating someone's trademarks. Placing copyrighted material on your Web site without permission is wrong or illegal as well," Mykytyn said.
Business method patents are now much more valuable and enforceable in providing protection for the patent owner. In her study, Martin matched 40 patenting firms with 40 nonpatenting competitors and then compared their performance.
The ownership of business method patents did not provide a significant competitive advantage. However, patent-owning firms that were able to gain an initial performance improvement were more likely to maintain that advantage over time.
Mykytyn and Martin plan to broaden his research "to include European Union countries, especially Germany," he said.
Mykytyn holds a bachelor's degree in marketing from John Carroll University and master's and doctoral degrees in computer information systems from Arizona State University.
Leading in research, scholarly and creative activities is among the goals of Southern at 150: Building Excellence Through Commitment, the blueprint for the development of the University by the time it celebrates its 150th anniversary in 2019.