Software Patent of the Week: EBay for Bonds

I’m at the State Policy Network’s education reform summit learning about school choice, probably the most important civil rights issue of our generation. I’ve learned a lot, but as a consequence, I haven’t had much time to blog. Luckily for me, this week’s software patent is so incredibly obvious that I don’t think I’ll have to write very much about it. The patent is held by a Pittsburgh bond-trading firm that won a ruling against a rival that had the audacity to offer competing bond-trading software. The patent in question is Patent #6,161,099, “Process and apparatus for conducting auctions over electronic networks.” Here’s the executive summary:

An apparatus and process for conducting auctions, specifically municipal bond auctions, over electronic networks, particularly the Internet, is disclosed. The auctioneer maintains a web site from which information about bonds to be auctioned can be obtained. A user participates in the auction by accessing the web site via a conventional Internet browser and is led through a sequence of screens that perform the functions of verifying the user’s identity, assisting the user in preparing a bid, verifying that the bid conforms to the rules of the auction, displaying to the user during the course of the auction selected bid information regarding bids received and informing the bidder how much time remains in the auction. The user may be given the option of confirming the accuracy of his bid before submitting the bid. The auctioneer is able to review bidding history, determine the winner and notify the winner over the network, and display selected auction results to bidders and observers over the network.

So it’s eBay for bonds. For those keeping score at home, eBay was founded in 1995, three years before the 1998 filing of this patent. So even if the idea of an online auction were a patent-worthy invention, it seems like the existence of eBay (and other auction sites that sprung up around the same time) would serve as prior art. But I guess the patent office felt differently.

Really, there’s not that much else to say. You would think that getting a patent would require something more innovative than simply offering online auctions for a particular products, but you’d be wrong. This is simply a patent on the idea of selling bonds via the Internet. How granting such a patent promotes “the progress of science of the useful arts” in the software or financial services industries is a mystery to me.

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