Business method, software patents limited: Big (bad?) news for tech firms

I've long thought the "business method patent" to be one of the biggest shams involved, and I am neither alone in this opinion or innocent of involvement in the scheme. Essentially, business method patents protect the manner of doing something; for instance, you might be able to patent your unique way of sorting envelopes. "I start by separating the colored envelopes from the white ones, and then sort by size," you might say. "Then I alphabetize each stack according to addressee first name."

As of yesterday, your patent would be denied. The Court of Appeals for the Federal Circuit handed down a ruling in the Ex Parte Bilski case that would severely limit software and business process patents, essentially requiring that these patents only be approved if the patent in question (1) is tied to a particular machine or apparatus, or (2) transforms a particular article into a different state or thing.

If this is upheld by the Supreme Court (which I tend to believe it would be), this will have far-reaching ramifications for technology companies like Amazon (NASDAQ: AMZN), which have protected a simple process (the One-Click ordering system) that is only an idea, not a machine. I've always found the concept that ideas could be patented to be noisome; taking the One-Click as an example, it is certainly not an idea that only one individual could ever conceive, and it's stifling to keep other competitors from using it. In my opinion, competition should exist based on the excellence of products and services and the development of brand identity, not on legal protectionism. Jeffrey Bezos may not agree ...