Patenting Tax and ERISA Strategies

There’s a hot topic of discussion out there all of a sudden - I think originally triggered by this post a few weeks back by Suzanne Wynn - concerning whether ERISA strategies should be able to be patented. The discussion, thanks to a detailed look at the issue in this week’s issue of the BNA Pension and Benefits Reporter, has finally reached the point where there is now more light than heat on the subject. I am quoted extensively in the BNA article, which is A WARNING TO ERISA PRACTITIONERS: YOUR BENEFIT PLAN STRATEGIES MAY BE PATENTED, 34 Pens. & Benefits Rep. (BNA) 1329. As per my usual practice of deeming it fair use for purposes of the copyright laws to quote verbatim sections of articles that quote me, here is what I had to say on the question of whether these types of strategies should be covered by the patent regime: 

Stephen Rosenberg, a partner with The McCormack Firm LLC, Boston, told BNA in an e-mail May 20 that he is "not a big fan" of business method and similar patents, such as for tax strategies, because these patents "aren't really advancing technology and the like in the scientific or mechanical arts." Rosenberg is a commercial litigator who specializes in litigating ERISA and intellectual property cases.

"With regard to patenting ERISA ideas and methods in particular, I believe you are moving out of patenting innovation and really simply into the realm of what is, in essence, simply the professional knowledge and expertise of the practitioner," Rosenberg told BNA. He added that he did not believe that the counseling of a lawyer or other professional service provider, who is simply applying his or her learned expertise in a particular field of training, should fall within the patent regime. Rosenberg said he believes that advances in professional knowledge of ERISA "should belong to the profession as a whole, as part of the advancement of knowledge in that field."

Rosenberg said that the real purpose of a patent is to provide protection to those who have invested resources into inventing something and who, without patent protection to allow them to exploit the invention, would not profit from it sufficiently to warrant the investment. "I am hard pressed to believe that a professional in the ERISA community who comes up with a new idea for how to attack an ERISA strategy problem won't go forward without [the protection of a patent]; instead, they will sell it to the client, with the expectation the client will be impressed enough to keep returning for more professional services and will recommend that provider to others," Rosenberg said in the e-mail.

In addition, Rosenberg said he believes that patents should not be granted to advances that would be obvious to others who are skilled in the particular field. "I am highly skeptical that a new ERISA strategy is likely to be so beyond what other practitioners, presented with the same problem by clients, would have come up with that it would justify placing exclusivity in the hands of the first to seek a patent for it," Rosenberg added.

I guess you can tell from my comments that I think it is pushing business method patenting a little too far, and in a direction that is simply not beneficial to clients, the profession or the public.

This whole question of how far patent protection should be allowed to extend echoes as well in what the WSJ Law Blog is calling the Patent Reform Battle Royale among the real big spenders, Cisco and Goldman Sachs and big pharma, and in the alleged patent troll problem complained about by Sun’s general counsel on his blog. Weighing in on what they have to say and how it fits in with the questions posed in the BNA article would take a lot more words than I have time to type today, but their posts on the issue are worth taking the time to read; you can then draw your own conclusions as to whether their complaints about the patent system likewise support precluding the patenting of ERISA strategies. If you would like a little more substance on the patent reforms at issue, you can find it here and here.

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