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2 Patents on methods of doing business on the Internet ( Internetpatents) have been the subject of intense debate and criticism for a number ofyears. [FN5] Indeed, since 1998, when the Court of Appeals for the FederalCircuit held that there was no per se exclusion of these Internet-implementedmethods from the realm of patentable subject matter, [FN6] many have questionedthe wisdom of the decision and sought to have its result altered. [FN7] Inaddition to the issue of subject matter eligibility for patenting, critics havequestioned whether the U.S. Patent and Trademark Office (PTO) has improvidentlygranted patents on Internet processes that appear at first glance to beobvious, thus failing one of the key requirements for patentability. [FN8] Theimportance of the Internet as a rapidly growing commercial platform combinedwith concerns for an open and free Internet added to the intensity of thesedebates. *3 Despite the importance of these debates, there has been relativelylittle empirical study of Internet patents, and no study of the increasinglitigation in which they have been involved. In one of the few studies of thepatents themselves, Allison and Tiller analyzed the quality of Internetpatents by comparing them to other kinds of patents. [FN9] They built a dataset of 1,093 Internet-implemented process patents and compared many of theircharacteristics with those of a randomly selected set of 1,000contemporaneously issued patents from the general population of patents (non-Internet patents, or NIPs). [FN10] Their purpose was to test empirically themerits of the many criticisms of these patents, all of which had been madewithout the support of any data. Measuring a number of characteristics thatprevious research had associated with patent quality and private economicvalue, such as the total number of claims and prior art references, as well asseveral other characteristics first employed by the authors, the study foundthat Internet patents appeared to be of higher average quality and value thanthe average patent. [FN11] *4 Researchers in economics and law have compiled evidence to support alink between the economic value of patents to their owners (private patentvalue) and litigation propensity. [FN12] In 2004 Allison, Lemley, Moore, andTrunkey (ALMT) conducted the most comprehensive comparison yet made oflitigated and unlitigated patents. [FN13] Measuring a number of patentcharacteristics that had been linked to litigation propensity and privateeconomic value, as well as some characteristics not previously considered butthat logically might suggest value and a greater likelihood of litigation, theauthors found that litigated patents were a completely different breed thanthose that had not been involved in litigation. With a high degree ofsignificance, the authors found that litigated patents, compared withunlitigated ones, contained more claims and more references to prior U.S.patents, foreign patents, and other kinds of publications ("nonpatent priorart"), and were cited more often as prior art by subsequent patents (i.e., theyhad more "forward citations"). They were disproportionately represented in sometechnology areas and in some industries. They were also much more likely tohave originally been issued to individuals and small businesses, and to beowned by domestic rather than foreign entities. Further, they had spent muchmore time in "prosecution" (examination within the PTO) from their originalfiling dates than unlitigated patents, primarily as a result of patentapplicants having invested more in continuing applications leading to thegeneration of multiple patents on closely related inventions--a patentportfolio that can have greater value than the sum of its parts. [FN1
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