Patenting a Supply Chain Analytics Process?

Patenting a Supply Chain Analytics Process?

QUESTION:

There’s a relatively new category of patents called "business process patents." Amazon has one for One-Click purchasing and and has applied for one on “anticipatory shipping.” This is where a shipment of something that a customer indicated on a wish list is made to a DC close to that customer in readiness for that customer’s order and subsequent fulfillment in a matter of hours. The patent seems vague and broad enough to cover a lot of things (e.g. predictive inventory planning, multi-echelon inventory planning, predictive redistribution)...anyway, I never would have guessed you could patent a supply chain analytics process.  If so, and if you could attack other companies "using" the "patent," that could have major (scary) consequences. What’s up with this?  Reference: Techcrunch: Amazon Patents “Anticipatory” Shipping — To Start Sending Stuff Before You’ve Bought It

EXPERT ANSWERS:

James A. Tompkins, Ph.D., CEO,
Tompkins International,
supply chain consultants

In my view I do not see how it can be patented, but then again Amazon has a patent for 1-step shipping as well, soooo? Amazon used their 1-step patent  against Barnes & Nobel to  make them do 2 step shipping many years ago, so who knows. I would not call this Anticipatory Shipping, but rather Forward Inventory Positioning.


Enan E. Stillman
Corporate and M&A attorney
Graham & Penman LLP

Crazy patents issue all the time. Recognizing that many business method patents wreak of silliness to executives, I have been astonished in my career at how difficult it is to invalidate patents in a jury trial.  It really does require a smoking gun, usually a killer piece of prior art that was never reviewed by the patent office when the patent was applied for and issued. Of course, third parties can challenge a patent. There are procedures in the patent office for asking for a review of a patent if someone has evidence that it is invalid and should not have been issued.  In the meantime, 35 USC 282 states that an issued patent is presumed valid, and the courts will only overturn a patent if there is clear and convincing evidence of invalidity.  

Regarding what other businesses with similar processes may or may not do, if one is genuinely concerned, they can consider whether they want or could benefit from a "freedom to operate" opinion that has a law firm evaluate the patent against their existing operations to give them an opinion that they can rely upon as to whether they may continue free and clear or whether there are adjustments the firm recommends in order to steer clear of infringement.

Alex Scott, Member
Supply Chain Management Ph.D. Program
Penn State University

I was thinking this was something that most firms could dismiss off-hand (companies have been forecasting customer demand and shipping in advance since the beginning of civilization - think of biblical traders bringing goods to the market!)...but Enan, implicitly at least, indicates that these types of patents have to be taken seriously.  To me, that's terrible news (as someone who hates to see our country's resources wasted). Anyway, this type of patent could completely change logistics.  Let's hope not!


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